Questions Asked and Answered about PDPM

June 5, 2019


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On the May 28 AMDA On-The-Go podcast about the Patient Driven Payment Model (PDPM), host Wayne Saltsman, MD, PhD, CMD, had several questions: “What is this new thing called PDPM? How is it generated? Why do we need it? What was wrong with the current system? What does PDPM mean, if anything, to patients and medical teams? Why should those of us in skilled nursing care be concerned with, or understand, what a facility receives for payment?” Fortunately, his guest, Rajeev Kumar, MD, CMD, had answers to his questions.

The discussion started with a bit of history about the new reimbursement model. Currently, nursing home payments are driven by therapy minutes, with reimbursement being determined through the Resource Utilization Group IV (RUG-IV), a patient classification system for skilled nursing facility (SNF) patients. Under this system, payment to SNFs is determined primarily by the number of therapy minutes used, which doesn’t consider the array of clinical characteristics that drive resource use for patients. PDPM, which goes into effect on October 1, 2019, changes the focus from therapy minutes to clinically relevant factors that drive care and utilize resources. Under PDPM, Dr. Kumar observed, there will be six buckets—physical therapy, occupational therapy, speech therapy, nursing, non-therapy ancillaries, and non-nursing case mix index, and “all of these will drive reimbursement.”

PDPM is truly “patient driven,” Dr. Kumar stressed, noting, “Each patient’s characteristics and care needs drive the model. It [strives] to be much more accurate and precise in calculating how nursing homes are reimbursed.” More than ever, he observed, “The initial MDS [Minimum Data Sets] assessment is key and must be accurate.” This will be challenging, he admitted, as under the current system, only 20 documentation fields need to be completed; PDPM will require eight times that many. Clinicians will be required to enter the appropriate ICD-10 diagnostic codes as well. “It’s a very complex coding system. There are about 68,000 ICD codes in existence; for clinicians to understand and sort them out will be a monumental challenge,” said Dr. Kumar, adding that Society members can be “tremendously helpful” to facilities by ensuring accurate diagnostic coding. He said, “We need to be actively involved in establishing a clinical diagnosis for MDS clinicians to document.”

SNFs will need someone who is able to forecast and financially project what reimbursement will be, Dr. Kumar said: “Obviously, nursing homes can’t survive if they are providing care that is not reimbursed.” Again, he noted that Society members can step up to the plate and make a difference. “We will need to do timely visits,” he explained. Right now, Medicare only requires an initial visit in the first 30 days. However, to capture all of the diagnostic information needed, practitioners will be required to do the initial visit in the first few days—no later than day five.

Dr. Kumar observed, “Medically complex patients require very active participation by practitioners, not just for initial visits but for follow-up visits and as a resource to the team. We need to collaborate with pharmacy, and that is a huge issue….We need to establish a good formulary so that we are not spending unnecessary resources.” He added that deprescribing and antibiotic stewardship are “great geriatric efforts that will go a long way in ensuring we don’t waste resources” and in helping to reduce adverse events for patients.

While therapy minutes will no longer drive reimbursement under PDPM, practitioners will still need a strong relationship with therapy professionals. Dr. Kumar noted, “Working with therapy, we need to diagnose patients with certain comorbidities—such as depression, cognitive deficits, and neurological problems. We need to be accurate in prescribing the right diet and documenting dysphagia for speech therapy to be reimbursed appropriately and for other therapy case mix indexes to be documented appropriately.” He stressed that while the expectation is for therapy utilization services to be reduced over time in the new payment model, practitioners need to be “extra vigilant” in ensuring that patients receive the optimal amount of therapy.

It is important for the Society to be involved in issues such as PDPM.  “The more like-minded people we work with, the greater the leverage we will have with payors, insurance companies, especially the government. We can be the leaders for the post-acute and long-term care space,” Dr. Kumar said. “If we don’t take that role, someone else will; and then we can’t complain.” He further stressed that if policy is driven by other parties and politicians, “We and our patients suffer the consequences.”

Click here to listen to the full podcast and hear more of Dr. Kumar’s insightful comments and observations. Check out a full list of archived episodes you can listen to at your convenience. CME is available for these programs.