I always come back from a compliance conference breaking out in a cold sweat and my heart pounding.  It seems like once I finally wrap my head around one set of regulations, the next set is around the corner.  After attending a dozen or so sessions, I get insight into some of the new issues that we need to keep our eyes on.


PDPM is all the rage and concern, and unless you are living under a rock, as a provider, you are educating yourself and your staff.  In a nutshell, Patient Driven Payment Model is a marked transformation of the Part A payment system that comes into effect in October 2019.  According to CMS:


“PDPM represents a marked improvement over the RUGS IV model for the following reasons:

–    Improves payment accuracy and appropriateness by focusing on the patient, rather than the volume of services provided

–    Significantly reduces the administrative burden on providers

–    Improves SNF payments to currently underserved beneficiaries without increasing total Medicare payments.”


CMS contends that PDPM will improve payment accuracy and will encourage a more patient-driven care model by addressing each individual residents’ unique needs independently. PDPM focuses on the individualized needs, characteristics, and goals of each patient while the current RUG-IV reduces everything about a resident to a single, typically volume- driven, case-mix group. This is not just a tweak to the system- but a total conceptual change.


While we haven’t seen the PDPM system implemented, and there are still many questions, here are some potential compliance risk areas to keep your eyes on while you are building your program and educating your staff.

Comparison of Therapy Under RUG-IV Versus PDPM

CMS and the OIG will have the ability to compare the usage of therapy services for residents pre-PDPM (under RUG) vs. therapy usage under PDPM, and it’s expected they will be looking at these comparisons. Is a resident who, under the RUG system, was considered Ultra High for therapy suddenly receiving minimal therapy services? The new PDPM reimbursement strategy will be a dramatic shift over the current policy but, to minimize unintentional risk, changes should be slow, reasonable, and carefully documented in the resident care plan.

Therapy UNDERutilization

On the same note, the compliance concern under RUG-IV is overutilization of therapy- with PDPM the compliance concern will shift to underutilization of therapy. CMS will be concerned with behavior changes when the focus of therapy management shifts to a “cost that needs to be managed” versus a “vehicle for reimbursement.” We should ask ourselves “are we providing adequate services and are we partnering with the right therapy providers?”

Accuracy of ICD-10 Coding

It’s likely that ICD-10 coding under PDPM will require large-scale changes for skilled nursing providers. According to Mike Cheek, Senior Vice President of Reimbursement Policy at the American Health Care Association, the level of detail and accuracy required for ICD-10 coding under PDPM is new for SNFs, and the ICD-10 code accuracy will, come October 1, be connected to payment for services in a way that it wasn’t before. Under the new system, CMS will be expecting the provider to use ICD-10 codes to a higher level of detail.  The level of detail and accuracy in ICD-10 will present additional pressures and compliance concerns.

Oversight of Section GG on the MDS

Section GG replaces Section G in the current system. However, in contrast to the RUG-IV ADL score, points are assigned to each response level to track functional independence rather than functional dependence. In other words, higher points are assigned to higher levels of independence. Facility reimbursement can be significantly impacted by the accurate completion of this section. Highly consistent and detailed documentation will be more critical than ever for your reimbursement. This will undoubtedly become an area of scrutiny for compliance.

Increase Coding for Depression

There is a belief that depression is under-addressed in LTC, and the new PDPM system is actually encouraging the provider to address it. I anticipate that there will be a considerable increase in residents that are reported to have signs and symptoms of depression just be sure you are correctly managing the assessment and reporting of depression- use it BUT don’t abuse it.

Increase Coding for Mechanically Altered Diets/Swallowing Disorders

Mechanically altered diets often indicate acuteness in a resident and will trigger higher reimbursement under PDPM. The provider wants to be sure they are capturing this on the MDS as well as swallowing disorders.  There will need to be greater collaboration with the speech-language pathologist to assess and document a swallowing disorder. As always, be sure there is detailed, adequate documentation and make sure a risk assessment is completed in this area.

Interrupted Stays

This can be an area of concern specifically if there is an over-abundance of residents that are readmitted back to SNF more than three (3) consecutive calendar days after discharge. Be sure to have systems in place to track your hospital discharges and readmissions.

Early Discharge or Fewer Services

A meaningful change to note with PDPM is that the reimbursement rate decreases as the length of stay increases. You want to carefully monitor that there is not a trend of early discharges as the rate for the resident drops.

Exceeding the 25% Limit for Group or Concurrent Therapy

This will be monitored for providers consistently exceeding the cap.  You can view this oversight similarly to CMS current oversight of providers “RUG hugging.”

PDPM Assessment Schedule and IPA

Even without the requirement of an Interim Payment Assessment and a more streamlined assessment schedule, CMS will expect facilities to continually evaluate, capture, document and treat clinical and functional changes in the residents. Be sure your facility has developed policies for addressing assessment and changes in condition.


Changes are not always red flags, but we need to understand the area of risk and potential scrutiny better.  As you can see, the consistent theme is…be sure everything is documented and carefully care planned. With this system change, the government is encouraging the provider to dig deeper and look at more and address each residents’ unique needs.

When planning for PDPM and potential risk areas, it’s essential to use data to support your clinical decisions. Under PDPM, CMS will focus heavily on measuring and rewarding quality outcomes, so it’s crucial to leverage your current data to ensure the right care is provided to meet individual residents’ needs.