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The DOs and DON’Ts when signing a PDPM Pricing Amendment


  • Options – PDPM is not “one size fits all”, ask for 2 to 3 pricing options from your therapy provider so you can choose the one that you think is best for your facility.

  • Simplicity – You should be able to clearly understand what it is you are paying.

  • Flexibility – Many therapy providers have extensive knowledge of PDPM, no therapy provider has ever implemented PDPM. We have modeled and “hypothesized” what it would look like. Your contract should have an option to review PDPM pricing in 3 to 6 months. This is the only way both the SNF and the therapy provider can ensure their contract is working for both parties.

  • MPPR – Make sure your Medicare Part B services contract has this acronym. IF it does not, there is a strong possibility you are paying more for this service than you are getting reimbursed.


  • A Contract Extension! – Many Therapy Providers are taking this opportunity to slip in a “non-cancellable” 12-month or 24-month contract extension into this PDPM Payment Amendment. So if you current provider is not as good at PDPM as you had hoped, you are stuck with them for a year or more?! They now get to practice PDPM for a year or two at your expense…… That makes NO SENSE for the SNF, but does make a lot of sense for the Therapy Company that is not confident in their PDPM ability and/or knowledge).

DO NOT DO IT! Just say “No” 

CMS Releases 2020 Proposed Rule - The Highlights

As you may be aware, on April 19th CMS released the FY 2020 SNF PPS Proposed Rule that sets forth the proposed updates to FY 2020 beginning Oct 1, 2019 . As you know, CMS finalized the Patient Driven Payment Model in last year’s final rule, so the proposed rule contains mostly expected revisions related to the new payment model.

However, CMS also uses more than half (147 pages) of the 232-page document to detail significant proposed updates to the IMPACT act quality reporting program (QRP). It is important that providers understand the proposed updates to the PDPM as well as the future of QRP. These have been detailed these here.

FY 2020 SNF PPS/PDPM Updates

  1. CMS has proposed a Market Basket Update of 2.5%. This equates to $887 million in aggregate payments to SNFs during FY 2020.

  2. Base Rates for all PDPM Payment categories have all been updated:


3. Several CMIs have been revised (see highlighted revised CMIs)


4. The Relative Importance Factor has been updated.

a. Labor Related: 0.708

b. Non-Labor Related: 0.292

5. Wage Index Adjusted Rate Calculation same as FY 2019:

The total case-mix adjusted per diem rate is the sum of all five case-mix adjusted components into which a patient classifies, and the non-case-mix component rate.

In order to calculate the labor portion of the case-mix adjusted per diem rate, one would multiply the total case-mix adjusted per diem rate by the FY 2020 labor-related share percentage. The remaining portion of the rate would be the non-labor portion.

The final case mix adjusted rate would be the sum of the Wage index adjusted labor related portion of the total case-mix adjusted per diem rate and the non-labor related portion of the total case-mix adjusted per diem rate.

Example (using Wage Index 0.9757):


6. Updated Wage Indexes: can be found here.

SNF-Level of Care – Administrative Presumption

CMS is retaining the Administrative Level of Care Presumption defined at section 30.1 of CMS Pub. 100-2 Chap.8 with modifications to accommodate the differences between RUG IV and the PDPM. CMS continues to believe that this designation reflects an administrative presumption that those beneficiaries who are correctly assigned one of the designated case-mix classifiers on the 5-day Medicare-required assessment are automatically classified as meeting the SNF level of care definition up to and including the assessment reference date (ARD) for that assessment. This presumption recognizes the strong likelihood that those beneficiaries who are assigned one of the designated case-mix classifiers during the immediate post-hospital period would require a covered level of care, which would be less likely for other beneficiaries.

Group Therapy Redefined

CMS is proposing to define group therapy in the SNF Part A setting as a qualified rehabilitation therapist or therapy assistant treating two to six patients at the same time who are performing the same or similar activities. CMS believes this definition would offer therapists more clinical flexibility when determining the appropriate number for a group, without compromising the therapist’s ability to manage the group and the patient’s ability to interact effectively and benefit from group therapy. CMS also believes this revised definition would support CMS’ cross-setting initiatives under the IMPACT Act and Meaningful Measures Initiative, and would align the definition of group therapy used under the SNF PPS more closely with the definitions used within the outpatient setting covered under Medicare Part B and under the IRF PPS, and that this type of standardization would reduce administrative burden on providers by utilizing the same or similar definitions across settings.

Sub Regulatory Process for Updating ICD-10 Initiated

CMS indicates that it is essential that they are able to update the code mappings and lists consistent with the latest coding guidance. Therefore, to ensure that the ICD-10 mappings and lists used under PDPM reflect the most up to date codes possible, CMS is proposing to update any ICD-10 code mappings and lists used under PDPM, as well as the SNF GROUPER software and other such products related to patient classification and billing, through a subregulatory process which would consist of posting updated code mappings and lists on the PDPM website.

Beginning with the updates for FY 2020 , nonsubstantive changes (changes limited to those specific changes that are necessary to maintain consistency with the most current ICD–10 medical code data set) to the ICD-10 codes included on the code mappings and lists under the PDPM would be applied through this subregulatory process. Substantive revisions (changes that go beyond the intention of maintaining consistency with the most current ICD-10 medical code data set. For instance, changes to the assignment of a code to a comorbidity list or other changes that amount to changes in policy) to the ICD–10 codes on the code mappings and lists used under the PDPM would be proposed and finalized through notice and comment rulemaking.

Quality Reporting Program (QRP) Updates

1. CMS is proposing to expand data collection for the SNF QRP quality measures to all SNF residents, regardless of payer source.

2. Current SNF QRP Measures


3. 2 New Proposed QRP Measures to begin to be reported FY 2022 (Both of these proposed measures support CMS’s Meaningful Measures priority of promoting effective communication and coordination of care, specifically the Meaningful Measure area of the transfer of health information and interoperability):

► (1) Transfer of Health Information to the Provider–Post-Acute Care (PAC); assesses for the timely transfer of health information, specifically a reconciled medication list. This measure evaluates for the transfer of information when a patient is transferred or discharged from their current setting to a subsequent provider defined as a short-term general hospital, a SNF, intermediate care, home under care of an organized home health service organization or hospice, hospice in an institutional facility, an IRF, an LTCH, a Medicaid nursing facility, an inpatient psychiatric facility, or a critical access hospital.

SNF Denominator

The denominator is the total number of SNF Medicare Part A covered resident stays ending in discharge to a short-term general hospital, another SNF, intermediate care, home under care of an organized home health service organization or hospice, hospice in an institutional facility, a swing bed, an IRF, an LTCH, a Medicaid nursing facility, an inpatient psychiatric facility, or a critical access hospital. Discharge to one of these providers is determined based on response to the discharge location item, A2105, of the MDS assessment, shown below. A stay is defined as the time period from resident admission or reentry to the facility (identified by a 5-day PPS assessment) to discharge.


SNF Numerator

The numerator is the number of stays for which the MDS 3.0 indicated that the following is true: At the time of discharge, the facility provided a current reconciled medication list to the subsequent provider (A2121= [1]).

Items Included in the Quality Measure

One data element will be included to calculate the measure. One data element will be collected to inform the internally consistency logic of the proposed measure


► (2) Transfer of Health Information to the Patient–Post-Acute Care (PAC). This proposed measure assesses for and reports on the timely transfer of health information, i.e., a current reconciled medication list, to the patient/resident when discharged from their current setting of post-acute care to a private home/apartment, board and care home, assisted living, group home, transitional living, or home under the care of an organized home health service organization or hospice.

SNF Denominator

The denominator for this measure is the total number of SNF Medicare Part A covered resident stays ending in discharge to a private home/ apartment (apt.), board/care, assisted living, group home, transitional living or home under care of organized home health service organization or hospice. Discharge to one of these locations is determined based on response to the discharge location item, A2105, of the MDS assessment, shown below. A stay is defined as the time period from resident admission or reentry to the facility (identified by a 5-day PPS assessment) to discharge.


SNF Numerator

The numerator is the number of stays for which the MDS 3.0 indicated that the following is true: At the time of discharge, the facility provided a current reconciled medication list to the resident, family and/or caregiver (A2122= [1]).


4. CMS is proposing to update the specifications for the Discharge to Community–PAC SNF QRP measure to exclude baseline nursing facility (NF) residents from the measure. Baseline residents are residents who lived in a NF prior to their SNF stay and may not be expected to return to the community following their SNF stay.

5. Standardized Patient Assessment Data Elements (SPADEs): The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) requires CMS to develop, implement, and maintain standardized patient assessment data elements (SPADEs) for post-acute care (PAC) settings. The four PAC settings specified in the IMPACT Act are home health agencies (HHAs), inpatient rehabilitation facilities (IRFs), long term care hospitals (LTCHs), and skilled nursing facilities (SNFs). The goals of implementing cross-setting SPADEs are to facilitate care coordination, interoperability, and improve Medicare beneficiary outcomes.

Existing PAC assessment instruments (i.e., OASIS for HHAs, IRF-PAI for IRFs, LCDS for LTCHs, and the MDS for SNFs) often collect data elements pertaining to similar concepts, but the individual data elements -- questions and response options -- vary by assessment instrument. With a few exceptions, the data elements collected in these assessment instruments are not currently standardized or interoperable, therefore, patient responses across the assessment instruments cannot be compared easily.

The IMPACT Act further requires that the assessment instruments described above be modified to include core data elements on health assessment categories and that such data be standardized and interoperable. Implementation of a core set of standardized assessment items across PAC settings has important implications for Medicare beneficiaries, families, providers, and policymakers. CMS is proposing standardized patient assessment data elements for five categories specified in the IMPACT Act. These categories are:

  1. Cognitive function (e.g., able to express ideas and to understand normal speech) and mental status (e.g., depression and dementia)

  2. Special services, treatments, and interventions (e.g., need for ventilator, dialysis, chemotherapy, and total parenteral nutrition)

  3. Medical conditions and co-morbidities (e.g., diabetes, heart failure, and pressure ulcers)

  4. Impairments (e.g., incontinence; impaired ability to hear, see, or swallow)

  5. Other categories as deemed necessary by the Secretary

CMS has finalized the adoption of SPADEs for two of the categories (1) Functional status: Data elements currently reported by NFs to calculate the measure Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631); and (2) Medical conditions and comorbidities: the data elements used to calculate the pressure ulcer measures, Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) and the replacement measure, Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury.

CMS is also proposing that SNFs would be required to report an extensive new group of SPADEs beginning with the FY 2022 SNF QRP. If finalized as proposed, SNFs would be required to report these data with respect to SNF admissions and discharges that occur between October 1, 2020 and December 31, 2020 for the FY 2022 SNF QRP. Beginning with the FY 2023 SNF QRP, CMS proposes that SNFs must report data with respect to admissions and discharges that occur during the subsequent calendar year (for example, CY 2021 for the FY 2023 SNF QRP, CY 2022 for the FY 2024 SNF QRP). The following is a list of the proposed SPADEs. This document offers an much more thorough explanation of the proposed SPADEs listed below as well as examples of the proposed data elements as they would appear in assessment tools, most of which have been modified from the way they appear in the current assessment tools, including the MDS. On a recent Open-Door Forum, CMS indicated that these additional proposed SPADEs, while not part of any formal QRP measure, would be subject to the QRP APU requirements.

A. SPADEs for Cognitive function (e.g., able to express ideas and to understand normal speech) and mental status (e.g., depression and dementia)

1. The Brief Interview for Mental Status (BIMS)

2. The Confusion Assessment Method (CAM)

3. Mental Status (Depressed Mood) PHQ-2 to 9

B. SPADEs to Assess for Special Services, Treatments, and Interventions

1. Chemotherapy

2. Radiation

3. Oxygen Therapy

4. Suctioning

5. Tracheostomy Care

6. Non-invasive Mechanical Ventilation

7. Invasive Mechanical ventilation

8. IV Medications (Antibiotics, Anticoagulation, Vasoactive Medications, Other)

9. Transfusions

10. Dialysis (Hemodialysis, Peritoneal dialysis)

11. V Access (Peripheral IV, Midline, Central line)

12. Parenteral/IV Feeding

13. Feeding Tube

14. Mechanically Altered Diet

15. Therapeutic Diet

16. High-Risk Drug Classes: Use and Indication (anticoagulants; antiplatelets; hypoglycemics (including insulin); opioids; antipsychotics; and antibiotics)

C. SPADEs to Assess for Medical Conditions and Co-Morbidities

1. Pain Interference

D. SPADEs to assess for Impairments

1. Hearing and Vision Impairments

2. Vision

E. SPADEs to assess for a new category: Social Determinants of Health

1. Race and Ethnicity

2. Preferred Language and Interpreter Services

3. Health Literacy

4. Transportation

5. Social Isolation

6. CMS also posted concepts of Proposed future QRP measures and SPADES that are under consideration.


7. SNFs are currently required to submit MDS data to CMS using the Quality Improvement and Evaluation System (QIES) Assessment and Submission Processing (ASAP) system. CMS will be migrating to a new internet Quality Improvement and Evaluation System (iQIES) that will enable real-time upgrades over the next few years, and CMS is proposing to designate that system as the data submission system for the SNF QRP once it becomes available, but no later than October 1, 2021. CMS is proposing to replace the Survey Provider Enhanced Reports (CASPER)” with “CMS designated data submission”. CMS is also proposing to replace the reference to the “Quality Improvement Evaluation System (QIES) Assessment Submission and Processing (ASAP)” with “CMS designated data submission” and replace the reference to “QIES ASAP” with “CMS designated data submission system” effective October 1, 2019. In addition, CMS is proposing to notify the public of any future changes to the CMS designated system using subregulatory mechanisms, such as website postings, listserv messaging, and webinars.

8. CMS is proposing to begin publicly displaying data for the Drug Regimen Review Conducted With Follow-Up for Identified Issues-Post Acute Care (PAC) Skilled Nursing Facility (SNF) Quality Reporting Program (QRP) measure beginning CY 2020 or as soon as technically feasible.

Proposed SNF Value Based Purchasing Updates

1.       The SNFPPR and the SNF QRP potentially preventable readmission measures assess different aspects of SNF care, CNS has received stakeholder feedback that having two SNF potentially preventable readmission measures has caused confusion. To minimize the confusion surrounding these two different measures, CMS is changing the name of the SNFPPR to Skilled Nursing Facility Potentially Preventable Readmissions after Hospital Discharge.

2.       FY 2022 Performance Period and Baseline Period for Subsequent Years

A.      The performance period for the FY 2022 program year will be FY2020, and the baseline period will be FY 2018.


B.      CMS is proposing that SNFs would have 30 days from the date that they issue VBP reports to review the claims and measure rate information and to submit to us a correction request if the SNF believes that any of that information is inaccurate. CMS indicates that this 30-day review and correction period would commence on the day that they issue the June report, and a SNF would not be able to request that CMS correct any underlying claims or its measure rate after the conclusion of that 30-day period. This proposal would change the deadline from March 31st of the following year.

B.      SNF VBP Impact to SNFs for FY 2020


FY 2020 Proposed Rule Impact Analysis

A.      Information Collection Requirements

1.       CMS estimates that the total number of PPS 5-day assessments, PPS discharge assessments, and IPAs that would be completed across all facilities will be 4,905,042 assessments (2,406,401 + 2,406,401 + 92,240, respectively). The total estimated time for all assessments across all facilities is 4,169,286 hours per year (4,905,042 assessments x 0.85 hours/assessment). For all assessments across all facilities, CMS estimates a burden of $280,421,251 (4,905,042 assessments x $57.17/assessment).

2.       Overall Impact to SNFs


CMS has updated the PDPM website… Again!

As we in the SNF world eagerly anticipate the 5-Star and the SNF FY 2020 proposed rule this month, the revised RAI Manual in May and the SNF FY 2020 Final Rule in July, on April 4th, CMS updated the PDPM Website… again! Things are really moving at a breakneck pace. You may feel   like it is a challenge to keep up. You are not alone. It’s time to pull out your running shoes and stretch your thinking muscles because the pace is not going to get any slower moving toward October.

As for the PDPM website revisions let’s take a breather and have a closer look. The following are the documents have been revised to reflect clarifications that CMS has made with regard to the new payment system; PDPM FAQ, PDPM Patient Classification Walk Through, PDPM Grouper Logic, PDPM ICD-10-CM Mappings. Here is a summery of the revisions that have been made. The full documents can be found at

PDPM ICD-10 Mapping – CMS has done us all a favor here. First, they have combined all of the mapping tools into one Excel workbook. Now we can just access that one tool to do all of our PDPM ICD-10 map searches. Next, they have updated the code sets in response to suggestions industry experts have made since the first edition of these tools. In the Clinical Categories by Dx. tab, ICD 10 codes have now been mapped appropriately.

For example, in the prior versions, there was an incomplete list of dx and some dx that should have mapped to possible surgical procedures did not. For example, dx code S72001D Fracture of unspecified part of neck of right femur, subsequent encounter, maps to a default category of Non-Surgical Orthopedic/ Musculoskeletal and May be Eligible for One of the Two Orthopedic Surgery Categories. This was not the case in prior versions of the mapping tool. There are multiple similar revisions that have been made.

The SLP comorbidity map now contains 102 diagnoses. The prior version only contained 70. Multiple diagnoses have been added to Apraxia, Dysphagia and speech and language deficits categories, further enhancing the variety of diagnoses that classify under these categories. The NTA comorbidity diagnosis map continues to have 1535 diagnoses available to map to the 27 NTA comorbidity categories that use MDS item I8000.

PDPM Patient Classification Walkthrough – This document has had only a minor revision. In the prior versions of this document, the source for the NTA comorbidity, Inflammatory Bowel Disease, was noted to be I8000. However, this was a typo and has been corrected to be I1300.

PDPM FAQ – This document has had several clarifications. CMS has also been very helpful in delineating these clarifications in red so they could be easily spotted. Here is a list of the FAQ’s that have been revised;

1.8 – The term primary diagnosis has been changed to Principle diagnosis as it related to the primary reason the resident is being treated in the SNF. CMS continues to indicate that MDS item I0020B and the UB-04 should match.

5.4 – The question as to whether a HIPPS code can be generated if the BIMS has not been completed has been resolved with this clarification, “If neither the BIMS nor the staff assessment is completed, then the patient will not be classified under PDPM and a PDPM HIPPS code will not be produced for this assessment.” In other words, when the BIMS was not completed because the resident had an unexpected discharge, the staff assessment may be completed. This clarification, however, does not apply to situations in which the BIMS could have been completed but was not. The current rules in the RAI manual page C-2 etc. will still apply.

11.5 – CMS has clarified how the items in J2100 – J5000 will be used for payment under PDPM. They indicate, “These items will be used, along with the patient’s primary diagnosis coded in item I0020B, to classify patients into a PDPM clinical category, which is then used as part of the PT, OT, and SLP case-mix classification groups for PDPM.”

12.10 – CMS continues to reiterate the fact that under PDPM, while there is no requirement that a certain amount of therapy days and minutes are required for a rehab payment category to be generated, it is important to remember that a daily skilled service will still be required. To that point they have added a reference to Chapter 8 of the Medicare Benefit Policy Manual, specifically section 30.6. where daily skilled services are defined.

12.12 – In this FASQ entry, CMS has clarified that, under PDPM, there is no change in the way a therapy student’s time can be captured. In this update they have added a reference to a section in the RAI Manual entitled “Modes of Therapy” which may be found in Chapter 3, Section O.

13.4 – Here CMS has made a substantive clarification as to how therapy data should be captured in section O of the discharge assessment when there have been one or more interrupted stays. To clarify this CMS indicates, “SNFs should report the therapies furnished since the beginning of the Part A stay, including all parts of an interrupted stay, in section O of the MDS for each discharge assessment.” The previous FAQ indicated that only therapies that occurred since the readmission would be included.

14.10 – This FAQ has been completely rewritten. The question is, “How long will the OSA be in place?” To which CMS has responded, “There is currently no definitive timeline for retiring the OSA. Once states are able to collect the data necessary to consider a transition to PDPM, CMS will evaluate the continued need for the OSA, in consultation with the states.” This is good news for states who require RUG III or RUG IV HIPPS data for Medicate rate calculations.

14.13 – As CMS winds down the RUG system calculations in light of PDPM, as in 14.10, CMS here reiterates that after the implementation of the PDPM, states that will need to continue to generate RUG scores on more frequently than the 5-day PPS, OBRA Comprehensive and quarterly types of assessments, will need to use the OSA to do so. CMS added the clarification that, “Beginning October 1, 2020, states must use the OSA as the basis for calculating RUG-III and RUG-IV HIPPS codes.”

PDPM Grouper Logic – While CMS did not provide a document that indicates what has been revised with  regard to the grouper logic, it is safe to say they have updated it with regard to the changes and clarification noted above, in particular, the multiple revisions made to the ICD-10 mapping.

CMS has updated their PDPM educational materials at least 3 times and we can expect more. As we look for the documents that will come our way in the coming months, it will be imperative that providers stay up to date on all of the changes and revisions that CMS provides.

At Broad River Rehab, we are up to date. Our PDPM Navigator® has already been updated to reflect the most recent ICD-10 mapping revisions. We provide state of the art tools and education to all our clients to help them stay current with the shifting LTC reimbursement landscape. We would love to talk with you about how Broad River Rehab can be your knowledgeable and compassionate rehab partner as you prepare for PDPM.

Give us a call at (800) 596-7234, we’d love to chat. Do you have a tough PDPM or other reimbursement question? Ask an expert!

Paying for Rehab Under PDPM

Under PDPM, rehab will become a cost and no longer be a source of revenue. Since outcomes are still job one, you might be wondering just how you’re going to pay for the rehab that is necessary to achieve the best possible patient outcome.

Planning is critical to your success. Contrary to what a lot of people are saying you don’t have 11 months (as of today) to figure things out. If you see a website counting down to October 1st 2019 stay away. You need to start implementing your plan MUCH sooner than that. You can’t expect to have all of your program changes spin up on day one and work properly, right? Any good project manager will tell your to begin testing your systems and iterating through change cycles long before “go live” date.

Note: If you don’t yet have an implementation plan, contact us today and let one of our experts create a custom plan just for your situation. Since they’re AANAC RAC certified nurses, they understand the things you’re going to need including restorative and respiratory. Alternatively, you can ask your provider’s AANAC RAC certified experts.

But you can’t plan without knowing how much money you might have available when PDPM is fully implemented. While it’s impossible to know exactly because it depends on the underlying medical conditions of the patients arriving at your facility and many other factors like how effective you are at identifying opportunities, CMS did make an estimate based on 2017 data.

Your therapy provider should have already provided this data to you, discussed the implications and helped you formulate a plan, but in case yours didn’t and you don’t want to sift through that data yourself, allow Broad River Rehab to do it for you.

Note: Sorry mobile users, this next part works best on a large screen.

This map shows every provider in the United States and the CMS estimated change in PPD. Hover your mouse over the map to show the map controls. You can zoom in to see your specific facility. Hover your mouse over the facility dot to see the name of the facility, the change in PPD and the number of days utilized in 2017.

As you can see, there are trends by state, by provider type, by ownership, etc. There are also some underlying truths that Accumen discussed in the technical report. Significantly, if you are servicing a high number of ultra-high residents, you will likely see lower reimbursement.

We can take this a step further however and convert the PPD change to a percentage change:

Okay. Now that you’ve seen your facility and you have an idea how much your Medicare Part A reimbursement is going to change under PDPM, you probably have more questions. How exactly do you use this information? How do you compare to other facilities? How do I create an action plan that will have me ready for PDPM? etc. (hint: that last one is the one to be asking…)

(click to enlarge)

Let’s start off with how you compare. The odds are the financial impact is positive. But, if you are one of the facilities that is expecting lower reimbursement, what should you do?

It might be tempting to just apply the same percentage decrease to your minutes but that’s not a sound strategy. Remember: your therapy contract is going to change with PDPM along with a LOT about the way your MDS nurse operates.

The best thing you can do at this point is educate yourself or at least find someone smart to talk it over with. Once you feel like you have a good understanding of how PDPM is going to work and how it will probably impact your facility, you need to engage your therapy contractor or therapy department. If your therapy partner is unwilling or unable to engage in serious, meaningful dialog about the operational and financial changes that will be required, it’s time to start finding outside help and considering change.

Not to put too fine a point on it, but… you know.

PDPM, SNFs & Therapy Contracts

PDPM, SNFs & Therapy Contracts

PDPM is scheduled to be implemented October 1, 2019 for traditional Medicare Part A patients in the SNFs. This will mean your therapy company will probably need to amend their contract to accommodate this new type of payor source. So how will you be charged?

Since history is a pretty good indicator of the future, I started thinking about the multitude of ways we charged when PPS was implemented in the late nineties. Since there was no standardized charging method for RUGs, facilities were charged a variety of ways. I recall the company I worked for charged $36.00/day for a Medium RUG (that was $1.68/minute by today’s standards)!

We all eventually settled in on standardized methods that made sense to the SNF and the Therapy Company. I believe 3 models are gaining favor and I will try to give you the PROs and CONs of each.

1. Per Minute – Since there are no minimum therapy minutes to provide with PDPM, many believe the SNF will want to be in charge and approve how much therapy is provided as they are now paying for it.

a. Pro – This is similar to managed care part A patients that receive a “flat rate” for the stay and the SNF pays for therapy out the “flat rate”

b. Pro – Puts the SNF in charge of approving minutes from a cost perspective

c. Con – Increasing therapy, increases cost to the SNF

d. Con – Puts the SNF in charge of approving minutes…. Yes, I know I listed this as a Pro, but I also believe therapy delivered may decrease on some with this method and if there is a whistle blower lawsuit (someone claims therapy was not given in the amount needed because it increases the profit margin of the SNF), the SNF is liable. If the SNF has a higher tolerance to risk, this may be a better method.

2. Per Diem – With this model, the therapy company would charge the SNF a flat per diem rate based on the 5 Clinical Categories (Major Joint Replacement or Spinal Surgery, Orthopedic Surgery (except major joint), Non-Orthopedic Surgery, Acute Neurology, and Medical Management) This “feels” similar because today we have 5 per diems based on RU, RV, RH, RM, and RL.

a. Pro – Feels like what we have today

b. Pro – Puts the therapy company in charge of approving minutes

c. Con – Increasing therapy increases cost to the Therapy Provider.

d. Con – Puts the therapy company in charge of providing minutes…. Yes, I did it again. If there is a whistle blower law suit (like above), the therapy company is more liable here. If the SNF has a low “tolerance to risk” this model may be a better method.

3. A percentage of the Rehab components of reimbursement….. Remember the total dollar amount the SNF receives is a combination of 6 individual dollar amounts (3 of which are PT, OT, and SLP)

a. Pro – the SNF can be offered what appears to be a small percentage here, like 50%

b. Con – Put your fingers on a calculator before agreeing to this model……

4. A percentage of the Total amount the SNF receives from all 6 components (not just PT, OT, and SLP) There is a Nursing “RUG” for every Medicare Part A patient in PDPM, NTA, and the one Non-Case-Mix Component.

a. Pro – you can easily calculate what percentage you pay today and compare

b. Pro – aligns the vested financial interest of the SNF and the Therapy Company…..

c. Con - Your rehab company must demonstrate the can positively effect the Nursing and Non-Therapy Ancillaries. If they can’t, why share?

As you can see, there is a lot to think about in the coming months. Don’t get complacent though, change is coming.