AHLA's Speaking of Health Law

Expert Insights - The Nuts and Bolts and Operational Implications of CMS’ New PDPM for SNFs: What Providers Need to Know, Part 1

August 22, 2019
AHLA's Speaking of Health Law
Expert Insights - The Nuts and Bolts and Operational Implications of CMS’ New PDPM for SNFs: What Providers Need to Know, Part 1
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AHLA's Speaking of Health Law
Expert Insights - The Nuts and Bolts and Operational Implications of CMS’ New PDPM for SNFs: What Providers Need to Know, Part 1
Aug 22, 2019
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Show Notes Transcript

Are you ready for the new skilled nursing facility payment model on October 1? In this first of two podcasts, sponsored by the national long term care consulting firm, Polaris Group, Dan Hettich of King & Spalding talks to Mike Cheek of the American Health Care Association and Judy Kulus of Lantis Enterprises, examining what has changed under the new payment system, how it will affect reimbursement, and how to address the operational challenges in implementing the new system.



DH:
0:01
Hello everyone. This is episode one of a two part series on the new patient driven payment system that's going to dictate payments for skilled nursing facilities starting October 1st, 2019. This episode we're going to focus on the nuts and bolts of the program and in the next episode we'll get into more the day to day operational issues and tension points associated with implementing a brand new payment program. I want to start off by thanking our sponsor. This AHLA podcast is sponsored by the Polaris Group, a national long term care consulting firm specializing in Medicare compliance, clinical operation and financial consulting. The group performs mock surveys, MDS accuracy audits, PDPM training, independent review organization and more. So thank you to them. My name is Dan Hettich. I'm a partner in King and Spalding's healthcare practice group. I'm resident in Washington DC. I focused my career on medicare reimbursement issues of all types, for all providers, especially hospitals and healthcare systems. I'm very pleased I'll be moderating these episodes and I'm very happy to be joined by my two co presenters, Judy Kulus and Mike Cheek. Judy, you want to introduce yourself?
JK:
1:45
Ah, yes. Good morning. Or hello everyone. I'm Judy Kulus, chief nursing executive from Lantis Enterprises and we're an organization that has 22 skilled nursing facilities, 11 assisted living and a number of other healthcare organizations in the continuum. And I'm pleased to speak with you today on this call as I was able to serve on the technical expert panel for the RCS one program that was a precursor to the PDPM. So looking forward to sharing with you today.
MC:
2:20
And I'm Mike Cheek. I'm the senior vice president for reimbursement policy and business strategy with the American Health Care Association. We represent about 13,000 SNFs across the country. I had the privilege of working with Judy over the past couple of years on the development of what's now called the patient driven payment models and new PPS for skilled nursing facilities and it's been the past year traveling to pretty much every state in the country training on PDPM operational issues, and helping members understand how to prepare for the transition from RUGS to PDPM.
DH:
2:59
Great. Thank you both. Well, let's get started. Judy, maybe I'll kick it off with you. I think it'd be helpful. Could you give us kind of a nutshell overview of some of the biggest changes between the new patient driven payment model PDPM and the prior RUG 4 system? In other words, why isn't this simply RUG 5?
JK:
3:21
Yeah. Well this a really different system as, as those that are looking at it and preparing their facilities for implementation on October one 2019, the rug system has as many, our experience with [inaudible] has 66 rugs that is based on the volume of care that's provided primarily. And as we've seen, the highest number of RUGs that are billed to medicare in the RUG 4 system tends to be the, the high therapy therapy, very high, ultra high. Um, and so we're dealing with lots of therapy minutes that are driving the payment in many of the, of the RUGs that are billed. There's also the opportunity to build nursing rugs and other rugs in the system. But, um, primarily we end up focusing on the volume of therapy rather than what the PDPM system does is it changes to focus on the patient characteristics and we'll get into more of the components in just a few minutes, but it really the characteristics of the patient, it's much more granular of a system, much more complex with, with many more components driving the payment. And so rather than having one, six daily rates, it's a combination of six multiple different rates that, that go into that daily per diem. Um, both systems are per diem. However, how we arrive at that payment is much more complex in the PDPM system and in, and the nice thing about it is that it is really going to create a unique payment for each patient based on their needs and their, um, like, like you said, the characteristics in the diagnosis and the services that they're receiving. The other thing that has happened in the PDPM is there's a change in how HIV and AIDS payments are made. They've, uh, woven it into the daily per diem rates. It's still going to be captured on the claim. Uh, with the B, B 20 code. However, it's not a carve out like it was in the RUG system. It's going to be just woven into the system. So generally speaking, um, the PDPM as we, as I've said, as much more granular, more complex and looking at all of the needs, the nursing needs, the therapy needs, um, the, the functional needs as a resident, the diagnosis, the services that are being provided that goes into that daily rate. And Mike, I don't know if you want to add anything about what you see the difference between RUGs and PDPM.
MC:
5:55
I think the two things that I would add in Judy, you alluded to it in your comments, is that CMS has really emphasized their expectation that care plans will be highly individualized, um, based on, um, the, the more flexible nature of the case of the components and related case mixed groups. Um, and that their expectation is that plans be individualized, holistic and highly heterogeneous within a building. So the cookie cutter approach to assigning a certain number of therapy minutes and therefore a single RUG, um, assignment is the antithesis of what they expect to see under this new payment system. Um, they also will link out those, that holistic, individualized focus on that type of care plan to outcomes. Um, and they have a very specific list of QRP, uh, quality reporting program measures under the impact act, um, that they already have benchmarked at the individual SNF level, um, that they will be using to assess provider performance going forward.
DH:
7:14
Mike, with all of these, um, significant changes, I mean, we said already that it's the new payment system scheduled to take effect on October 1st. If CMS can have a transition period to allow SNFs to, to, you know, transition from RUG 4 to PDPM,
MC:
7:30
uh, they will not. Uh, there is no transition period, um, on beginning, on October one, the system will convert, um, from the resource utilization group or RUGs, um, to PDPM the patient driven payment model. Uh, we've been encouraging our members to treat all September admissions as is, as if they were a PDPM admissions. Um, both to practice that admission process because there's a great deal of intensity that has to go into collecting the adequate clinical information, uh, for case mixed group assignment. Um, also, uh, CMS's logic here was that running two payments systems, um, would be highly problematic for providers as well as CMS. Um, and blending, uh, having some sort of blended rate system between RUGs and PDPM is simply not possible. Um, as Judy pointed out that these two payments systems are fundamentally different. So the notion of a blended approach is not feasible.
DH:
8:37
Right. Judy, you alluded to in your overview kind of the six components of, of payments. Can you describe those in a little more detail for us?
JK:
8:56
Sure. There are going to be, as I said, six components. One is the PT case mix group. Um, the second component is the OT or occupational therapy case mix Group. There is a separate speech language pathology group. There's a separate nursing case mix group and a non therapy ancillary case mix group. And all of those five groups are variable. They have different um, payments based on case mix index. And I'll explain those briefly in just a minute. The sixth component that goes into make a daily rate is a non case mix component, which isn't variable. It's, it's a fixed set payment that will be added to each of the, um, daily payment rates. So looking at the PTOT components, both of them are designed the same. They, uh, the first thing that will happen is the facilities will be selecting the primary reason for the Medicare A stay. And that reason that diagnosis should be mapped to one of a few components that's going to drive the 16 case mix index groups or the PTOT component. Uh, major joint replacement or spinal surgery is one group, other orthopedic medical management, and then a non orthopedic surgery and acute, um, neurological components. So these components primarily driven by that, that single diagnosis will determine the PT, OT functional group, um, a case mix index. The other thing that will, uh, be filtered into it is what I mentioned, the functional index. There are 10 functional, um, items that are coming off of the MDS section, GG. So it's things like eating, oral hygiene, toileting, uh, a number of mobility items and, um, how the resident can transfer and walk and, um, and their bed mobility is, has said. So these 10 items will, will be calculated together for a final score that will drive the case mix index for the 16 groups for the PT OT component. Now they are calculated separately with different case mix index and different payments. And as I'm look closer at the components, it's helpful to see that, um, some of the diagnosis like major joint replacement and and so on, we'll be having a higher payment and the PT areas. And then some of the diagnosis like medical management, uh, we'll have the OT will be a higher payment than PT. So it's really filtered based on the diagnosis and based on the anticipated services for PT and OT that will be given for speech language pathology, it's um, there's 12 case mix index. And with this, there's the um, opportunity to have a variable payment based on whether the patient has acute neurological conditions. Um, some related co-morbidities, things like Aphasia, CVA, stroke, Hemiplegia, and there's a list of items that would go into the comorbidities. And if the resident or patient has those conditions, the case mix index will be a little higher. Uh, also contributing to the speech language pathology is cognitive impairment. And so I think having a resident or patient that has some level of cognitive impairment is going to increase the payment for the speech language component. The other, call it an end split that's going to cause a variable payment in the speech language component is swallowing disorder and the mechanically altered diet. And so those are key items that if the patient has a swallowing disorder where they're choking or, or coughing or have a problem with swallowing, they'll get a higher payment as well as mechanically altered diet. So that these, um, the speech language pathology is variable based on, again, you can see the patient characteristics that contribute to the needs of the patient. The nursing component does match closely to the RUGs for group. It's that there's some familiarity that we have with that. It's a condensed, um, from the, the RUGs for system, but it still includes extensive services, special care, high special care, low clinically complex and behaviors, symptoms and cognition and the reduced physical functioning. The um, the other characteristics that the patient would have that contributes to the nursing payment is seven of the section GG, um, aids, um, functional scores. So eating again, toilet hygiene, mobility related to bed mobility and transfers and these match closely to the RUGs force system in the sense that they are the late loss ADL that they're using the, the new section GG item of the mds rather than the, the RUG system that uses the section g item. Um, for the nursing components. The um, the other contributing factors to the payment is whether the resident has depression, um, scoring or not depressed as well as restorative nursing plays a part in certain of the categories and the nursing component. So that's the nursing component. And then the non therapy antlers, which we're going to dig into a little bit more, but there's 50 items that um, each will contribute to a non therapy ancillary score. And of those 50 items, one of them, which is the HIV aids would be noted on the claim, but the rest would be noted on the MDS. And of those half of them would be categorized in that in the I 8,000 category of section I of the MDS. And the reason why I mentioned that is that the, the facility teams, the nurses that are coding ICD 10 will have to a proper ICD 10 code to capture those non therapy ancillary items on the mds. The rest are checked as a section. I am the MD and each of different levels of scoring and the case mix index for the non therapy ancillary would be based on the scoring that the resident patient received from the characteristics that they match in the listing of the non therapy ancillary item. So I've reviewed just briefly, PT, OT, speech, nursing, non therapy, ancillary. Um, and, and I hopefully this has been a quick overview of the components and some highlights of how the system is deriving the payment.
DH:
15:36
Thank you, Judy. Yeah, there's certainly a lot there and I think summarizing that right, each of those, uh, six components, um, have a base rate and then there's the kind of the complicated rules that you are going through of how that base rate is adjusted based on a resident's actual, uh, condition or needs met. The case mix adjustment released five of the six are adjusted by the case mix index in that last one is, is basically room and board, right? Is that, is that correct?
JK:
16:05
[inaudible] yes, that's correct. Yup.
DH:
16:08
Mike is, as Judy said, I mean it's um, previously the non therapy net non therapy ancillaries which encompass things like drugs importantly and devices and things of that nature was bundled into the nursing component. Now CMS has separated it out into its own component that can be separately, uh, adjusted based on that list of 50 conditions. Could you, um, explain to us a little bit more the significance of that. I know long term care pharmacies are very interested in that, in that change that I think a lot of people thought it was a long time coming.
MC:
16:47
Sure. So it's uh, under the resource utilization group system or RUGS, uh, non therapy ancillary, the non non therapy ancillaries were combined with the nursing component so that it was a single single component. Uh, CMS, um, assumed that roughly 45% based on their research of um, of the payments for the nursing and non therapy ancillary component under RUGS, a 45% were comprised of non therapy, ancillary expenses, uh, medications, durable medical equipment, et cetera that were ordered for a specific patient. Um, they used that percentage roughly risk adjusted to arrive at a separate non therapy ancillary component, um, under the initial iteration, um, of the payment system that we now know is the patient driven payment model. Previously RCS one CMS condensed a much more extensive list of conditions and extensive services down to the 50 that Judy noted on. Each of these is intended to capture, um, specific high, uh, high prevalence, uh, conditions and extensive services based on CMS's analysis, um, of MS Drgs and utilization of certain, um, of certain extensive services that they distilled down to this 50. Um, each of the 50 items has a certain number of points assigned to them. Um, HIV AIDS being, uh, having the most points at with eight. So when classifying a patient into the, uh, the non therapy ancillary, uh, component, the uh, an mds coordinator in the clinical team or interdisciplinary team would go through, goes through, identifies all the conditions and extensive services that a patient might have or need then sums those points, um, to arrive at a total. The total number of points is which used to assign a patient, um, to a case mixed group and the related a case mix index. Um, what's particularly important about the non therapy ancillary to understand, um, relates to the variable pretty m that schedule that's associated with it. Um, CMS front-loaded the payments for non therapy ancillaries. So whatever the rate is associated with the case mix group is multiplied by three. For the first three days of a stay, you're getting on date for the, uh, the payments dropped by two thirds. Um, you have the ability over the course of this day of court to adjust the case mix group for non therapy ancillary for the non therapy ancillary component. But the variable per diem schedule does not return today. One, so missing a certain number of points and not appropriately categorizing someone into the most appropriate case mix group so that you start at the FBO. Your starting point for the variable per diem schedule is not at the appropriate point then if they could cause some, um, some notable problems for you later in this day in terms of covering costs of care.
DH:
20:20
And Mike, this is a, a big change. The variable, this concept of a variable per diem rate where you're not a SNF is not simply getting the same payment for each component from day one through day a hundred, but the fact that it varies bank based on the length of stay, that's pretty significant, isn't it?
MC:
20:38
It is. Um, and it's based on research that CMS conducted, um, where it, there, uh, where their work with their contractor at acumen indicated that the bulk of costs, um, for non therapy ancillaries were incurred during the first, first three days when medications and equipment are ordered, um, for uh, for a gift for a specific patient. Um, and that the cost for physical therapy and occupational therapy again are higher during the first, uh, first portion of the stay, um, due to set up and set up an assessment, and costs associated with physical therapy and occupational therapy. Those are the other two components that taper over the course of the stay on, uh, physical therapy and occupational therapy began to taper on day 21 and the decreased, um, every seven days by, um, by 2% after that. Um, I think that that in, in terms of overall revenue for a given provider and being sure that you have adequate revenue to care for all of your patients is being able to again, code accurately, particularly for the non therapy ancillary component. Um, because are the consolidated billing rules and uh, and statutory language remained the same. So being able to capture as much of those medication expenses you using the NTA component is critical. Um, and then over time as the non, once the non therapy ancillary component decreases on day four and PT OT decrease every seven days being on day 21, the proportion of overall per diem payment for patient becomes increasingly dependent on, on the nursing component over the course of longer stays. So in terms of variable, in terms of the variable per diem schedule, the real heart, the real crux here is getting on therapy ancillary, correct. And also making sure that your nursing component is correctly, um, correctly assigned as well.
DH:
22:54
Right. Do, did you have any, um, any thoughts on a variable, per diem rate?
JK:
23:03
As Mike said, the front loaded aspect of it does help with the fact that many of the medications you might order the, the supply for instance, for potentially the whole month, say a 30 day supply of something that the patient needs. So it, that's the concept behind this front loaded. I think some people have reacted that they're concerned about the decrease in payment to the non therapy ancillary on day four. But again, the front loaded system is designed to allow facilities to financially fund that residents, um, ancillary needs, the medications, treatments for wounds and other supplies, um, up front. And hopefully that will allow them then to care for that patient for the remaining part of the stay as that small payment comes in on day four, but it sustains them through the stay. But as Mike said, it's going to be really careful or really important for facilities to one, capture the non therapy ancillaries that will contribute to a higher score effectively and accurately as well as manage the types of medications and supplies they order to meet their patient's need, but to do it with as where possible generic drugs and or appropriate evidence based treatment supplies that are also efficient for finances as well. So just managing, uh, to meet the residents needs within the scope that can be controlled with the expenses that are encouraged during the resident's day.
DH:
24:39
So Judy, what are some other key clinical and financial drivers under the PDPM?
JK:
24:46
Oh, that's a great question. Um, one of the frame that, one way I want to frame the answer to this idea of looking at the financial and clinical outcomes for a medicaid care, excuse me, medicare patient. This is medicare a is what isn't changing and what isn't changing is the rules around covering a patient for Medicare a and a chapter eight of the Medicare benefit policy manual outlines the requirements to for the patient to have a daily skilled need of therapy, which is five days a week, um, for at least 15 minutes of therapy. The nursing is seven days a week and there's a list of, uh, of clear finite activities that qualify to bill medicare for Medicaid, medicare, a patients. And um, imagine that to say that that hasn't changed. So when we are looking at, uh, caring for a patient in the Medicare A system, um, the, the rules and the coverage criteria for doing that are the same in this new system as they are in rugs. Um, however, the payment is going to be different as we've outlined here. So some of the, the key financial drivers in the system are going to be the joint. The items that are gonna pay in the higher amount are of the major joint replacement. Um, anticipating that the needs of the patient would be the therapy for recovery post-surgery. Um, other, other orthopedic, those higher RUGS on the PT OT category, the higher nursing, um, items that are scalable, things like a new g tube, uh, trached vents that are new. Uh, there's other items in nursing that, that financially will pay more that that is also a coverable under Medicare a and uh, so important to look at that. Some of the, um, when you look at the clinical needs of a patient in looking at PT and OT, it's interesting to note that as the system determines a score for the, uh, functional needs of the patient, that will increase the case mix index in a PT OT component. The patient that has the highest level of dependency and the, and or the highest level of independence is going to actually score higher than a patient that has some ability to um, to provide for their own eating, oral hygiene, you know, the mobility items of bed mobility and transfers and walking. But that case mix index system grants basically in some categories, higher payment to those that are in the middle that aren't totally dependent or totally independent. And I mentioned that to say that those are the patients that have some ability for improvement and yet they're not independent so they don't need patient PT or OT. Um, and so it's clear that the clinical needs of a patient with some ability for improvement in their functional status, those are the patients that will have a higher payment in order to provide the heavier level of therapy to meet their needs. Uh, which is, which is very logical, makes, makes sense. And how the system is working. Conversely, uh, for the nursing components, those, those residents with the higher level of dependencies will end up having a higher payment. What, regardless of the case mix group that they're in, um, those that are in special care, high special care, low, the clinically complex in the higher levels of expensive services, um, those with the greater dependencies are going to, uh, also, uh, result in a higher payment to meet those patients' needs. Um, so that's, that's a component of that. And then when you look at the non therapy ancillaries, um, the system will provide additional funding for those that have some of the high clinical needs such as IVF feeding, um, uh, vent care, respiratory care, um, g tube. Those are the kind of items that also will result in a higher payment. So I've highlighted some of the clinical areas, uh, whether it's a higher functional level or a higher, um, diagnosis with some of the complex nursing as well as the surgical, um, outcomes that result in higher therapies that drive that financial payment. Um, but we can see that again, as long as those diagnosis and the needs of those patients match the requirements under the Medicare A benefit, um, it can be a win win for those patients. Meet the Medicare a criteria that we have, the have the high complex needs, the need for high therapy, um, and that and that will drive the system. But again, because it's granular, we want to be looking at each of the different components and um, make sure that we're capturing the matching items that are in place for that particular patient. So we don't miss out on, um, some area of payment that, um, that we are needing to provide care for.
MC:
30:13
I think something I'd like to add to that is, you know, just the sheer number of mds items that now try payment. Um, they're roughly 20 under RUGs that resulted in assignment to a rug. Uh, RUGS case mix groups. They're about 188 MDS items that are associated with payment now, um, under, under PDPM. So being able to retool your admission process, um, to hit with, to complete with CMS now calls the initial Medicare assessment, um, under the final rule for this year, um, is going to require some, some real reorganization of your admissions team and how they communicate with hospitals and other clinicians. Um, in order to collect all to collect that information code appropriately and arrive at the most accurate case mix group feasible.
DH:
31:12
So Mike, we heard at the outset that um, you know, while RUGs four was driven heavily by, uh, the, the number of therapy minutes provided to a snf resident that under PDPM that's going to shift more to, um, resident conditions and needs. What role, if any, will therapy minutes continue to play under a PDPM?
MC:
31:37
So I was really glad, um, that Judy led off with her description of the SNF level of care because I think that I'm using that as a framework for this, this discussion point as well as the overall discussion around PDPM is an important one because I think over time with RUGS as the system has evolved, particularly the way that it pays, um, with itself with such a heavy emphasis on therapy that, um, we've not paid as much attention to what residents require in regard to skilled nursing, um, skilled therapy as well as, um, as well as restorative care, um, and how often that's required. So I think that that's an important context, um, to start with this, that, um, that it's intended to be an array of services. Um, when you're drilling down a bit on therapy and its role. Um, CMS said that on looking, considering the end of the September 30th looking towards October one, if a patient needed a 720 minutes of therapy on September 30th, they would expect to see the same number of minutes delivered on October one if that's what the patient needs and the medical documentation supports it. Um, in terms of transition, would a patient needs, is, would a patient needs the actual number of minutes don't play into this at all for purposes of payment, they only relate to the number of minutes that are al that are associated with particular modalities of delivery of therapy. Um, individual and then group and concurrent CMS will be assessing the, not the number of minutes for group and concurrent, um, as 20, uh, 25%, um, for group or for group and concurrent. There'll be kindle collecting that on the discharge MDS on, they had their own, their own method for assessing that to that total for a building. But if a SNF chooses to track that and report that themselves, they have that option. But the only approach that CMS is taking to assessing therapy as opposed to minutes, um, is tracking for the tracking for 25% and tracking for outcomes associated with the delivery of therapy for patients.
DH:
34:15
Judy, one um, issue that we haven't talked about too much yet is uh, the resident, uh, assessments, the mandatory assessments of resident functioning, which um, under RUG 4, there were multiple mandatory assessments, uh, periodically, every certain number of days on their PDPM. CMS has, has reduced that and given kind of an optional, um, assessment if a patient's conditions have condition has changed significantly. Could you, um, explain to us just a little bit more about that?
JK:
34:48
Sure. Um, I think many mds, nurses around the country are going to be celebrating on October one that the volume of assessments, the 14, 30, 60, 90 day and we have end of therapy, start a therapy change therapy assessment. So those are all going away. And, and you can see since the system is no longer being driven by the volume of care provided, which needs assessments done so frequently measured and kept the payment accurate based on the volume of care, we're moving to a characteristics based system that will establish the resident's characteristics at the beginning of the stay. And there will be that five day start of Medicare assessed that very well can pay for the entire Medicare A stay through, through the end. And with that being the case, um, we see that there'll be that the start of Medicare and the end of Medicare assessment and, and that may be yet now because of the fact that sometimes the course of treatment, um, has unexpected twists and turns. There is the options called the IPA, the interim payment assessment. And that is strictly optional. And CMS has indicated that they, that they are, I'm not expecting that there will be very many IPAs done throughout the Medicare a stay. Um, primarily because as the resident continues to improve throughout the stay, um, that we wouldn't probably do a payment adjustment. Uh, however, there are conditions or situations where a resident could decline, they could have a change in their care status, in which case the burden of care might increase such that having an increased payment through doing an IPA might might be warranted. And again, it's optional. The, um, the thing that is that is important to, um, consider with this is, is just the fact that monitoring it, it's optional. Uh, and to do it in a discretionary way as, um, the resident improves. Um, or let's just say for example, that the payment for therapy might go up if a, if a change occurs, um, that as they improve as their adls, uh, improve. Maybe the payment would go up if you did an IPA. However, as the resident improves, their nursing component would go down, the payment will go down. So the, the caution for any facility in doing an IPA is to always calculate the full payment with all five of the components. And then of course, including the fixed components of six one before making a determination because we can see that when we recalculate the potential change that might go down, but another item might go up. And so we may need to look at the net effect of the change and then optionally choose to do it if it's warranted to, uh, to, to in this case, to change the payment such that it meets the needs of the care that you're providing to that patient throughout their stay.
DH:
37:58
Mike, my understanding is that I'm sorry do you have something to add on that, Mike?
MC:
38:01
Yeah. I, I was, I was gonna, uh, I was gonna say, um, building on what Judy says CMS, specifically states and the final and the final FYI 19 rule that they assume stable patient characteristics, um, and that they would expect, uh, interim payment assessments to be, um, infrequent as Judy said. Um, I think that the, the language and the final rule for FY20 is also really worth reading quite carefully because relative to what she just described, they go to some links, um, to discuss snf responsibility under current regulation and Law to maintain a care plan that is appropriate, um, for patients changing needs over time. So while they say under PDPM the assumption is that stable patient characteristics based on their predictive modeling, the expectation is that the IPA is, will be infrequent. They also reinforce a SNF's responsibility to monitor for changes in a patient's care needs and to update the care plan, um, as needed.
DH:
39:21
Thank you. Mike. I was going to ask, um, Mike about the, um, net effect on, on reimbursement. My understanding is that CMS has said that they intend the transition to be budget neutral and they'll be applying a budget and adjustment, uh, to the system overall. But does that mean that individual SNFs would see, um, a change in payments based on their current resident mix?
MC:
39:47
So CMS, um, conducted a provider specific simulation for what would have been paid, um, in FY 17 or the patients who have been payment model based on, uh, based on the patient mix, um, from that year, uh, and looked at what PDPM payments would look like. Um, they assumed some, they made some assumptions around the patient population and from their projected increases and decreases in payment. What's important to note relevant related to that is that that those assumptions were based on data from existing MDS, um, and clinical information that they extrapolated from hospitals. So how PDPM actually played out when we begin to code using the new mds and the new rai manual guidance associated with the new mds. Um, those numbers may be directionally correct. Um, in some instances and others they may be not, they may not. Um, because the data points did not exist when CMS conducted the simulation that it did in terms of the overall payment system transition from RUGS on the PDPM. CMS included a budget neutrality adjustment factor, um, for transitioning for RUGS to PDPM. They trended forward and, and assessed what the expenditure should look like. Um, in the transition year moving from RUGS to PDPM, they used it on a figure that an acumen arrived at. And it's this, this, this, this description is located in the technical report. The multiplier is 1.46, um, that they multiply it all of the case mix indices for all case mix groups by to ensure that the dollar amounts, um, result would result in an overall aggregate budget neutral transition from one payment system to another. Whether that actually works out the way they anticipated is yet to be seen.
DH:
42:02
And Mike, what about the, um, effect on individual SNFs? Can they expect their payments to remain substantially similar to what they were on the RUGs 4? Or is that gonna vary?
MC:
42:14
Uh, as I mentioned, because CMS used the existing MDS information under RUGS and hospital information, um, to assess what PDPM simulated payments would look like, um, under what under providers specific payment files it's available at their website. Um, that's our, that's their best guess. Um, our, our members have been conducting their own assessments of what they think this will look like, but again, because the data points don't exist, um, they're imputing data from manually. In some instances they're, um, using proxy information as CMS did. So we think that most of them of our, of our members have arrived at directionally correct, um, increases in decreases in overall revenue. But I think that magnitude and the accuracy of it all, we will not know really until we get in. We get to November, um, or perhaps December once we have a couple of cycles of claims submission.
DH:
43:22
Great. Well, as we, uh, wrap this up, uh, Judy, um, as I mentioned, we're going to have a, uh, the next episode of, of this podcast series is going to be dedicated to day to day operational issues, uh, intention points associated with the new payment system and, and we've hinted at them, but maybe you could, uh, bring us home by giving us a preview of what you think are some of the biggest implementation challenges that SNFs are going to face on in, uh, implementing the new payment system.
JK:
43:52
Sure, sure. I think right out the gate, one of the challenges that, um, are continually facing the facilities is to capture the proper ICD 10 diagnosis coding for the primary reason and may that is to put the patient into the proper group right out the gate and capturing the diagnosis for ICD 10. All the systems been in effect for quite some time. But like the specificity or the um, detail that's needed to get to a code that doesn't give you a rejected code, which in the system is a return to provider code. That's one of the challenges that nurses are facing is to one, to obtain the information on the pre-admission screening form as the patient transfers in and there's transfer information to have enough information in the documentation from the doctor to select the proper code that that is specific enough. So the tension and the collaboration between, uh, the nursing teams and the, um, provider teams is going to be critical living into PDPM. So, uh, capturing that is critical. And, and I always caution the nurses to not that practice outside their scope. If they don't have the information in the transfer records, they really need to obtain it and to get to the correct specificity in order to assign the proper codes. And as we've talked about, as Mike said, there are 188 payment items. Many of them are simply resident diagnosis and or characteristics that need to be captured. So being thorough and detailed in that as a challenge. Um, section GG has always been a challenge. And, and the, the question that nurses often have is, is, is how do we collaborate with therapy? Therapy does some assessments of the functional status of the patient on admission, but we need to look at the three days, which is the window for capturing information. I'm looking up at the usual performance of the patient in those first three days. And then the last three days of the space and just collaborating with therapy effectively is important and selecting the proper functional score that's accurately a true reflection of the patient's performance. Um, we mentioned just the sheer amount of items on the MDS. Now that will contribute to payment. And what has become or will become more important than ever is the supporting documentation on the MDS to support the coding on the MDS. So as auditors come to look at these payment items to look, is it, was it accurately code item, was the documentation in place to support that coding and charting is always a challenge. And we've been doing lots of charting training and our organization and really encouraging the MDS nurses to ensure that whatever they put on the MDS has, has that reproducible supporting documentation to support that coding so that it's solid when, when those auditors come. Um, I mentioned the Medicare A skilled criteria is not changing and I think as we have in many ways relaxed our oversight in terms of letting therapy, um, um, be the qualifier in most cases, I think there's a opportunity here to, to be more, um, over to, to have more, um, holistic view. And as Mike said, we're looking at the care plan for the whole patient and what we're doing for the whole patient and the nursing items and the nursing qualifiers. Um, just managing that and being sure that on a daily skilled basis the professional services of the nurses and the professional services of the therapy in collaboration with each other are working effectively in that challenge of collaboration and really being aware of what our goals for the patient for recovery and are they making progress towards goals and tracking that. Um, and that really just is the clinical management or case management, um, skills that need to be raised to a higher level if they haven't already been for those, those nurses caring for those patients and working with therapists as they, um, look at how to put in, um, regimens that are very patient driven rather than just pushing for the higher therapy limits as, as, um, as Mike referenced earlier, the fact that all of the care should be individualized. And so, um, our, our collaboration to become much more astute at how that is happening for the patient is going to be something that I, that I look forward to working with the nurses to really dig into. And we've been doing some training on that with our organization itself. Those are some of the key, key challenges that I see, um, of the learning and the opportunity for nurses and therapists to use their skills effectively in this new system.
DH:
48:59
Thank you, Judy. Mike, you have any final thoughts on that before we wrap up?
MC:
49:04
Uh, no, no, I think that we've been training on, um, as a platform called longterm care team steps that was developed by the Agency for Healthcare Research and Quality. Um, it's a specific approach to redesigning tool and, uh, team interactions and healthcare facilities specifically is that this version, longterm care healthcare facilities. And I think that, um, that this approach is, that approach is particularly important because the communication methods and requirements are so different as, as Judy was discussing. Um, and I think Section GG is a great example because the functional, um, the functional items that are used for assigning someone to a case mix group for occupational therapy and physical therapy as well as for nursing overlap in some of, in certain items. So having nurses and therapists being able to have a structured approach to arrive at consensus around those functional items is critical. Um, because it affects both. Um, um, it affects really three components. Um, and it's something that CMS obviously will be using as a checkpoint for assessing, for assessing how, uh, skilled nursing facilities are to hearing to their internal policies for, uh, for patient cases, group assignment.
DH:
50:33
Right. We will be digging into all those issues further. In the next episode, we'll be focusing on these day to day operational, uh, challenges. Uh, but this concludes our first episode. I want to thank again, Mike and Judy for participating and I hope, uh, people will, will tune in for, um, for episode two. Thank you.
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