Posted on July 13, 2024

Since CMS's introduction of the Patient-Driven Payment Model (PDPM) in October 2019, skilled nursing facilities (SNFs) have faced the dual challenges of navigating a new reimbursement system and addressing the COVID-19 pandemic. This combination has often diverted attention from optimizing PDPM implementation to prioritizing infection control and safety measures for residents and staff. With occupancy rates at historic lows and a projected $22.6 billion revenue loss for 2021, according to the American Health Care Association, SNFs must now reassess their operations to uncover potential revenue opportunities that may have been overlooked.

Understanding PDPM Mechanics

PDPM marked a significant shift in Medicare reimbursement for SNFs, moving from a volume-based, therapy-centric model to a value-based approach focused on resident care. Daily reimbursement rates are now determined by five case-mix adjusted components based on each resident's clinical characteristics:

1. Physical Therapy (PT)
2. Occupational Therapy (OT)
3. Speech-Language Pathology (SLP)
4. Non-Therapy Ancillary (NTA)
5. Nursing

Under PDPM, comprehensive resident care is prioritized over increasing therapy minutes, requiring careful management of these critical care areas.

Exploring Overlooked PDPM Opportunities

Implementing PDPM was challenging even under normal conditions, and the pandemic further complicated its integration. Errors in coding or inadequate documentation during this period could result in facilities missing out on rightful payments for residents. Several frequently neglected revenue opportunities within PDPM include:

1. COPD Assessments: Chronic obstructive pulmonary disease (COPD) diagnoses can elevate a facility to a higher PDPM category, maximizing per diem reimbursement. Accurate coding and proper documentation of shortness of breath while lying flat are essential.
2. Interim Payment Assessment (IPA): An optional assessment conducted after a resident's clinical characteristics change, the IPA can potentially increase Medicare payment. Regular reviews for clinical changes are recommended even though the IPA is currently optional.
3. PHQ-9 Screening: Administering the Patient Health Questionnaire Depression Module (PHQ-9) accurately can result in greater reimbursement. Regular screenings upon admission and quarterly, conducted privately and empathetically, are crucial.
4. Restorative Nursing: Under PDPM, nursing is a separate component from therapy. Residents in the two lowest nursing categories may qualify for restorative nursing, requiring precise determination and recording in the Minimum Data Set (MDS).
5. BIMS: The Brief Interview for Mental Status (BIMS) screening tool identifies a resident's cognitive state. Following the script precisely without hints or clues is vital for accurate results and potential reimbursement.
6. Medicare Part C: SNFs providing skilled nursing care under Medicare Part C may face denials due to inadequate documentation. Ensuring necessary authorizations and appealing denials is essential to prevent revenue loss
7. Therapy Contracts: Regularly reviewing therapy contracts ensures alignment with residents' needs and prevents overpaying for unnecessary services. Annual contract reviews and obtaining multiple bids can lead to significant cost savings.

Concluding Insights

Clinically complex residents now drive the most revenue under PDPM. Periodic reviews of PDPM processes are essential to uncovering and maximizing revenue opportunities. SMK Medical offers comprehensive PDPM audits to assist SNFs in capturing as much revenue as possible while maintaining optimal resident care. By focusing on these often-overlooked opportunities, SNFs can enhance their financial health and continue providing high-quality care under the PDPM framework.

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