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PDPM Demystified: What you need to know about the New Patient Driven Payment Model

MARK MCDAVID, OTR, RAC-CT, CHC

MedPAC has raised concerns about:• Provider advantage• Payment inequities for different patient types• Patient selection being driven by payment• Concerns about overutilization of therapy

MedPAC has been focused on PAC payment reform• Aligning cost and payment• Equitable payments across patient groups• Pay for performance

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Why a New Payment Model?

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Questionable billing by skilled nursing facilities (December 2010)

Inappropriate Payments to Skilled Nursing Facilities Cost Medicare More Than a Billion Dollars in 2009 (November 2012)

The Medicare Payment System for Skilled Nursing Facilities Needs to be Reevaluated (September 2015)

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OIG Reports Over the Years

Limit complexity of the new payment system• 66 Payment categories vs 28,800

Address financial incentives described by MedPAC, OIG, and CMS

Payment model accuracy that will compensate facilities based on complexity of the patient

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CMS Goals

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Acumen – CMS Contractor

Previous (current) PPS System Finalized PPS System

Therapy PT ComponentOT Component

NursingST Component

Non-therapy ancillarycomponent

Non-case mixNursing component

Non-case mix componentIndex Maximized Not Index Maximized

Complete overhaul of the Medicare A payment system (replacing RUGs-IV)

On April 27, 2018 CMS released a SNF PPS Proposed Rule for FY 2019 that included the PDPM for FY 2020

On July 31, 2018 CMS released the PPS and Consolidated Billing for SNF Final Rule for FY 2019 This included PDPM language effective 10/1/2019

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Patient Driven Payment Model (PDPM)

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5 case-mix adjusted components and 1 non case-mix adjusted component.

• Physical Therapy Component • Occupational Therapy Component • Speech-Language Pathology Component • Nursing Component • Non-Therapy Ancillary Component • Non Case-mix Component (room and board, admin

cost, capital-related costs) + wage adjustment

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PDPM – 6 Components

Patient Driven Payment Model

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OTComponent Non Case-Mix

Component

SLPComponent

Resident

PTComponent

Nursing Component

NTA Component

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Note:

All residents would be classified into PT, OT, and SLP classification regardless of whether they are on therapy case load (likely being assigned the lowest CMI for the these components).

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Patient Driven Payment Model

Physical and Occupational Therapy Case-Mix Classification

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PT and OT Components

Unlike RCS-I, in the PDPM the PT and OT Components are calculated together but paid separately based on the case-mix.

Drivers of PT and OT component

• Primary reason for skilled stay

• Function score

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PT and OT Components

I8000 ICD-10-CM will classify the patient into one of the 4 Clinical Categories.

Multiple ICD-10-CM codes will point to more than one Clinical Category

In these cases, providers will select a surgical procedure category in a sub-item within item J2000 which would identify the relevant surgical procedure that occurred during the patient’s preceding hospital stay and which would augment the patient’s PDPM clinical category• This is due to post-surgical patient needs may be

much different than non-surgical patients

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4 PT/OT Clinical Categories

Major Joint Replacement or Spinal Injury

Non-Orthopedic Surgery and Acute Neurologic

Other Orthopedic

Medical Management

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PT and OT Functional Score

CMS will use 10 Section GG items to calculate the PT and OT Function Score. This includes 4 late loss ADLs and 2 early loss ADLs

• Two bed mobility items• Three transfer items• One eating items• One toileting item• One oral hygiene item• Two walking items

GG goes from a 6-point scale (with 3 not attempted codes) to 0-4 point scale for Function Score purposes

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PT and OT Functional Score Construction (Except walking)

Table 16 – CMS – 1696‐P

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Responses Score05, 06 Set-up assistance, Independent 404 Supervision or touching assistance 303 Partial/moderate assistance 202 Substantial/maximal assistance 101, 07, 09, 88, 10

Dependent, Refused, N/A, Not Attempted

0 More Care Nee

ded

PT and OT Functional Score Construction for Walking Items

*Coded based on response to GG0170H1 (Does the resident walk?) – This item will be replaced with GG0170I1 (Walk 10 feet)

Table 17 – CMS – 1696‐P

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Responses Score05, 06 Set-up assistance, Independent 404 Supervision or touching assistance 303 Partial/moderate assistance 202 Substantial/maximal assistance 101, 07, 09, 88, 10

Dependent, Refused, N/A, Not Attempted, Resident Cannot Walk*

0

More Care Nee

ded

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Finalized Section GG Items Included in PT and OT Function Measure

Table 18 – CMS – 1696‐P seagroverehab.com17

Section GG Item ScoreGG0130A1 Self-care: Eating 0-4GG0310B1 Self-care: Oral Hygiene 0-4GG0130C1 Self-care: Toileting Hygiene 0-4GG0170B1 Mobility: Sit to lying 0-4 (avg of

2 items)GG0170C1 Mobility: Lying to sitting on side of bed

GG0170D1 Mobility: Sit to stand0-4 (avg of 3 items)GG0170E1 Mobility: chair/bed-to-chair transfer

GG0170F1 Mobility: Toilet transferGG0170J1 Mobility: Walk 50 feet with 2 turns 0-4 (avg of

2 items)GG0170K1 Mobility: Walk 150 feet

PT and OT Case-mix Classification Groups

Partial Table 21 – CMS – 1696‐P seagroverehab.com18

ClinicalCategory

Section GG Function Score

PT OT Case-

MixGroup

PT Case-Mix

Index

OT Case-

Mix Index

Major Joint Replacement or

Spinal Surgery

0-5 TA 1.53 1.49

6-9 TB 1.69 1.63

10-23 TC 1.88 1.68

24 TD 1.92 1.53

Other Orthopedic

0-5 TE 1.42 1.41

6-9 TF 1.61 1.59

10-23 TG 1.67 1.64

24 TH 1.16 1.15

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PT and OT Case-mix Classification Groups

Partial Table 21 – CMS – 1696‐P seagroverehab.com19

ClinicalCategory

Section GG Function Score

PT OT Case-

MixGroup

PT Case-Mix

Index

OT Case-

Mix Index

Medical Management

0-5 TI 1.13 1.17

6-9 Tj 1.42 1.44

10-23 TK 1.52 1.54

24 TL 1.09 1.11

Non-OrthopedicSurgery and

Acute Neurologic

0-5 TM 1.27 1.30

6-9 TN 1.48 1.49

10-23 TO 1.55 1.55

24 TP 1.08 1.09

Speech Language Pathology Case-Mix Classification

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SLP Component

5 Characteristics that will impact the SLP Component• Acute Neurologic or Non-Neurologic

• SLP-Related Comorbidity

• Cognitive Impairment

• Mechanically Altered Diet

• Swallowing Disorder

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SLP Component

Acute Neurologic or Non-Neurologic

• Determined by I8000

SLP-Related Comorbidity

• Determined by Section I (I4300, I4500, I4900, I5500, I8000)and Section O for ventilator and tracheostomy care (O0100E2, O0100F2)

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SLP-Related Comorbidities

Table 22 – CMS – 1696‐P

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Aphasia Laryngeal CancerCVA, TIA, or Stroke Apraxia

Hemiplegia or Hemiparesis DysphagiaTraumatic Brain Injury ALS

Tracheostomy Care (while a resident) Oral CancersVentilator or Respirator (while a

resident)Speech and Language Deficits

CCognitive Functional Score (CFS)

CMS finalized blending BIMS and CPS to get a CFS score

Table 20 – CMS-1696 - P

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CFS Cognitive Scale BIMS Score CPS Score1. Cognitively Intact 13-15 02. Mildly Impaired 8-12 1-23. Moderately Impaired 0-7 3-44. Severely Impaired - 5-6

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SLP Component

Mechanically Altered Diet

• Determined by K0510C2

Swallowing Disorder

• Determined by K0100A-D and K0100Z

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12 SLP Case-Mix Groups

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Presence of Acute Neurologic Condition, SLP-Related

Comorbidity, or Cognitive Impairment

Mechanically Altered Diet or

Swallowing Disorder

Case-Mix Group

Case-Mix Index

None Neither  SA 0.68None Either SB 1.82None Both SC 2.66

Any one Neither SD 1.46Any one Either SE 2.33Any one Both SF 2.97Any two Neither SG 2.04Any two Either SH 2.85Any two Both SI 3.51Any three Neither SJ 2.98

Any three Either SK 3.69

Any three Both SL 4.19

Table 23 CMS-1696-P

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Nursing Case-Mix Classification

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25 Nursing Indexes

CMS will use a modified version of the RUG-IV Nursing Categories

CMS reduced the number of Nursing RUGs from 43 to 25.

This was accomplished by collapsing case-mix groups that have contiguous ADL scores when those RUGs were defined by similar clinical traits

We will look at Table 26 in a few slides.

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25 Nursing Indexes

CMS will use a modified version of the RUG-IV Nursing Categories

Nursing will also use Section GG to capture the Nursing Function Score

Using the same methodology as for the PT and OT component.

• 0-4 point scale

• Average bed mobility and transfers

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Section GG items for Nursing

Table 25 – CMS – 1696‐P

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Section GG Item ScoreGG0130A1 Self-care: Eating 0-4GG0130C1 Self-care: Toileting Hygiene 0-4GG0170B1 Mobility: Sit to lying 0-4 (avg of

2 items)GG0170C1 Mobility: Lying to sitting on side of bed

GG0170D1 Mobility: Sit to stand0-4 (avg of 3 items)GG0170E1 Mobility: chair/bed-to-chair transfer

GG0170F1 Mobility: Toilet transfer

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PDPM Nursing Index – 25 Indexes

*e.g. septicemia, respiratory therapy and more – see full chartPartial Table 26 – CMS – 1696-P

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RIG-IV Nursing

RUG

Extensive Services

Clinical Condition

Depression

# of RestorativeNursing Services

GG‐basedFunction Score

PDPMNursing Case‐Mix Group

Nursing Case-

Mix Index

ES3 Trach and Vent ‐‐‐ ‐‐‐ ‐‐‐ 0‐14 ES3 4.04

ES2 Trach or Vent ‐‐‐ ‐‐‐ ‐‐‐ 0‐14 ES2 3.06

ES1 Infection ‐‐‐ ‐‐‐ ‐‐‐ 0‐14 ES1 2.91

HE2/HD2 ----Seriousmedical 

condition*Yes ‐‐‐ 0‐5 HDE2 2.39

HE1/HD1 --- same No ‐‐‐ 0‐5 HDE1 1.99

HC2/HB2 --- Same Yes ‐‐‐ 6‐14 HBC2 2.23

HC1/HB1 --- Same No ‐‐‐ 6‐14 HBC1 1.85

HIV/AIDS add-on

Due to significant increase in nursing cost to care for HIV/AIDS pts, the facility will get an 18% increase in the Nursing Component

This would be applied based on the presence of ICD-10-CM code B20 on the SNF claim

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Non-Therapy Ancillary Case-Mix Classification

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50 Conditions & Extensive Services Used for NTA Classification

Partial Table 27 – CMS – 1696 - P

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Condition/ExtensiveServices

Source Points

HIV/Aids SNF Claim 8Parenteral IV feeding: High MDS Item O0100H2 7Special Treatments/ Programs: IV Meds Post-admit

MDS Item O0100I2 5

Special Treatments/ Programs: Vent or RespPost-admit

MDS ItemO010F2 4

Endocarditis MDS Item I8000 1

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NTA Case-Mix Classification Groups

Partial Table 28 – CMS – 1696-P

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NTA Score Range NTA Group NTA Case-Mix Index12+ NA 3.259-11 NB 2.536-8 NC 1.853-5 ND 1.341-2 NE 0.960 NF 0.72

Non Case-Mix Component

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Non Case-Mix Component

Flat rate

Non case-mix adjusted

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Variable Per Diem Adjustment Factor

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Variable Per Diem Adjustment Factor

Adjustment Factor• PT and OT: After day 20, drop 2% every 7 days.• Of interest, if the patient is in the facility on

days 98-100, the adjustment factor for PT and OT is 0.76.

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NTA Adjustment Factor

Table 31 – CMS – 1696‐P

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Medicare Payment Days Adjustment Factor1-3 3.0

4-100 1.0

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Assessments (MDS) to be completed

Only three types of assessments• 5-Day Scheduled Assessment

• Interim Payment Assessment (IPA)

• SNF Part A Discharge Assessment

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5-Day Scheduled Assessment

Grace Days• Remove the label “grace days” so that the 5-day

PPS schedule will be days 1-8 vs days 1-5 with grace days of 6-8.

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Interim Payment Assessment

Requirements(1) There is a change in the resident’s classification in at least one of the first tier classification criteria for any of the components under the proposed PDPM(which are those clinical or nursing payment criteria identified in the firstcolumn in Tables 21, 23, 26, and 27 – PT/OT, SLP, Nursing, NTA) such that the resident would be classified into a classification group for that component that differs from that provided by the 5‐day scheduled PPS assessment, and the change in classification group results in a change in payment either in one particular payment component or in the overall payment for the resident; and

(2) The change(s) are such that the resident would not be expected to return tohis or her original clinical status within a 14‐day period.

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Interim Payment Assessment

Requirements

‐ In addition, we propose that the Assessment Reference Date (ARD) for the IPA would be no later than 14 days after a change in a resident’s first tierclassification criteria is identified. The IPA is meant to capture substantialchanges to a resident’s clinical condition and not every day, frequent changes.We believe 14 days gives the facility an adequate amount of time to determinewhether the changes identified are in fact routine or substantial.

‐ Missed or late IPAs will be treated as missed or late unscheduled assessments

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Interim Payment Assessment

Requirements

‐ The IPA is an optional assessment‐ The ARD for the IPA will be the date the 

facility chooses to complete the assessment relative to the triggering event that cause the facility to choose the IPA.

‐ Payment for the IPA will begin on the same day as the ARD.

‐ The IPA is not susceptible to assessment penalties

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PPS Discharge Assessment

Must be completed on all PPS discharges

Adding a modified Section O to this assessment

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Modified Section O

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MDS Item Number

Item Name

O0400A5 Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Therapy Start Date

O0400A6 Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Therapy End Date

O0400A7 Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Total Individual Minutes

O0400A8 Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Total Concurrent Minutes

O0400A9 Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Total Group Minutes

O0400A10 Special Treatments, Procedures and Programs: Speech-Language Pathology and Audiology Services: Total Days

Partial Table 35 CMS-1696-P

Decrease in Provider Burden

CMS Predicts• The PDPM model will save providers $200M per

year or $2B over 10 years

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PDPM Modes of Therapy

Group and Concurrent Therapy Limits to 25% combined

Most services provided on an individual basis

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PDPM Modes of Therapy

Group and Concurrent minutes counted in full vs ¼ and ½ respectively

CMS will use the Discharge Assessment to monitor Group and Concurrent utilization.

• Should a provider exceed this limitation, a non-fatal warning edit will appear on the validation report after submission to the QIES ASAP system

• CMS may consider future proposals to address abuses of this policy or flag providers for additional review

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PDPM Interrupted Stays

Payment calendar continues (using adjustment factors) if the resident is discharged from a SNF and returns to the same SNF within 3 midnights.

Eval implications?

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PDPM Per Diem

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• Base Rate x PT and OT CMI x Adjustment FactorPT and OT Rate

• Base Rate x SLP CMISLP Rate• Nursing Rate x Nursing CMINursing Rate• Base Rate x NTA CMI x Adjustment

FactorNTA Rate

• Non-Case Mix RateNon-Case-Mix Rate

$$$

$$$

$$$

$$$

+

+

+

+

+

$$$

$$$

Total Per Diem

Hip Replacement Example

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Mr. B had a hip replacement and was sent for rehab at our SNF. His case-mix groups are as follows:

• PT and OT case-mix group – TA

• SLP case-mix group – SA

• Nursing PDPM case-mix group – CDE2

• Non-therapy ancillary – NE

• Non case-mix flat rate

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Hip Replacement Example

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Case-mix group TB TB SA CDE2 NE

Case-mix Index 1.69 1.63 0.68 1.86 0.96

Urban PT OT SLP Nursing NTA Non case-mix

Per diem $ 59.33 $ 55.23 $ 22.15 $ 103.46 $ 78.05x3 $ 92.63 Subtotal $ 100.27 $ 90.02 $ 15.06 $ 192.44 $ 224.78 $ 92.63

Days Per Diem

1-3 $715.20

4-20 $565.35

21-27 $561.54

‐ Urban‐ *Note: these rates are not wage index adjusted

Hip Replacement Example

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Case-mix group TB TB SA CDE2 NE

Case-mix Index 1.69 1.63 0.68 1.86 0.96

Rural PT OT SLP Nursing NTA Non case-mix

Per diem $ 67.63 $ 62.11 $ 27.90 $ 98.83 $ 74.56x3 $ 94.34 Subtotal $ 114.30 $ 101.24 $ 18.97 $ 183.82 $ 214.73 $ 94.34

- Rural- *Note: these rates are not wage index adjusted

Days Per Diem

1-3 $727.40

4-20 $584.25

21-27 $579.94

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Joint Replacement/Medically Complex

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Extremely ill patient with multiple comorbidities (joint replacement, dysphagia and mechanically altered diet, septicemia, depressed, 0-5 on GG, 12+ on NTA):

• PT and OT case-mix group – TA

• SLP case-mix group – SC

• Nursing PDPM case-mix group – HDE2

• Non-therapy ancillary – NA

• Non case-mix flat rate

Joint Replacement/Medically Complex

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Case-mix group TA TA SC HDE2 NA

Case-mix Index 1.53 1.49 2.66 2.39 3.25

Urban PT OT SLP Nursing NTA Non case-mix

Per diem $59.33 $55.23 $22.15 $103.46 $78.05 x3 $92.63Subtotal $90.77 $82.29 $58.91 $247.26 $760.98 $92.63

- Urban- *Note: these rates are not wage index

adjusted- Show AANAC Handout- Show CMS grouper tool

Days Per Diem

1-3 $1332.87

4-20 $825.54

21-27 $822.08

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Now What? Industry Changes?

The usual contract therapy contract will no longer “work”

Part B will continue “as is”

Part A portion of contract• What do we go to next?

• Pay contract based on hourly rate of time on-site?• Same as above with productivity minimum?• Pay contractor a percentage of the PT/OT and ST rates?

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Now What? Industry Changes?

Therapy utilization?• Assume that therapy utilization will decrease

May mean that there is a decreased demand for therapists nationwide.

Therapist salaries?

Is this “PPS lite” for the therapy portion of the industry?

Could “in-house” therapy be an option or a reality for your facility?

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Some Concerns About the Model

Rationing of therapy.

Modified Section O on discharge assessment seen as helpful to the therapy community.

How will it be handled if one discipline misses a few days? (sick therapist, holiday, staffing issues)

Use of Section GG seen as a good thing, but “usual performance” to drive resource allocation?

Auditors may try to apply rules that do not apply to this model well after the fact (paid for SLP, but didn’t provide it to a specific patient, auditor may try to take those funds back)

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Now that we have opened Pandora’s box, what questions do you have about PDPM?

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20 Page synopsis on our website http://seagroverehab.com/articles/2018/8/3/understanding-the-impact-of-the-finalized-patient-driven-payment-model

Mark McDavid, OTR/L RAC-CT, CHCSeagrove Rehab Partners

mark@seagroverehab.com850.532.1334

www.seagroverehab.com