Leaving Money on the Table: SNFs Must Better Manage PDPM Reimbursement with Medicare Cuts Looming | #education | #technology | #training


It will be three years this October since the Patient-Driven Payment Model (PDPM) was first implemented, and some nursing homes are still struggling to adjust.

While a global pandemic and unprecedented staffing shortages are partly to blame for problems in PDPM-related processes, so too is widespread staff agency use. And now, with a potential $320 million Medicare cut proposed for 2023, skilled nursing facilities are under intense pressure to most efficiently, properly and fully capture PDPM reimbursement.

That’s according to Lorie Morris, SVP of Assessment Coordination for Prestige Healthcare, and Georgie Faulk-Sherwood, vice president of clinical reimbursement for Focused Post Acute Care Partners, who both think one way for the sector to better capitalize on reimbursement is by limiting agency staff usage.

“Agency [staff] doesn’t always give us the information that we need to carry out a patient’s care,” Faulk said during Skilled Nursing News’ recent Clinical Executive Conference in Chicago.

She and Morris both spoke about how SNFs can better capture PDPM reimbursement with proposed Medicare cuts on the horizon.

But they also see reasons for optimism. Regardless of when the Medicare cut will be implemented, both Faulk and Morris think too many facilities are leaving money on the table.

“When I look at the PDPM cuts, I’m probably not as negative thinking about it as some people because I know we’re not maximizing currently, we’re missing some things,” Morris explained. “We’re going to have to get really good at maximizing [PDPM].”

Expectations for the PDPM payment cut

Because PDPM is meant to be budget-neutral, the system cannot be costlier to the Centers for Medicare & Medicaid Services (CMS) than the Resource Utilization Group (RUG) system. However, it was determined that the model increased payments to nursing homes by about 5% in fiscal 2020.

While an adjustment to the new system for Medicare reimbursement was delayed last year due to Covid-19, giving SNFs a little breathing room, it proved to be a slight reprieve as Medicare cuts are back on the table with many SNF experts expecting them to stay in place this time around.

Morris, for example, doesn’t believe the proposed 4.6% cut to will be modified again, though she does think the reductions may be eased at some point down the line.

“I do believe that they end up making it, but I think we will find a way around it,” she explained during the conference.

Faulk agreed that the mandate is coming, but like others in the industry she hoped to see the payment reduction spread out over multiple years. The cut is going to impact how communities can care for their residents and how they staff, she added.

“It’s very important that at least if they’re going to make this cut, then at least they don’t do it all at once but at least spread it out a little bit,” Faulk said.  

Agency staff hurt MDS coordination

Health care staffing agencies have been increasingly criticized for the rates they’ve charged over the course of the pandemic, with accusations of price gouging made from across the country. It is their compliance, or lack thereof, with minimum data set (MDS) documentation that has frustrated Morris and Faulk most.

Both proposed limiting agency staff usage as one way for facilities to be better prepared for the proposed payment cut and to improve MDS coordination, though that has proven to be easier said than done for many operators.

For instance, Omega Healthcare Investors (NYSE: OHI) — one of the largest SNF owners in the United States — reported last week that nursing and agency expenses were more than six times higher in the fourth quarter of 2021 compared to 2019 for its core portfolio.

“When you have agency in your building, they don’t know your residents and it hurts us tremendously when it comes to documentation,” Faulk explained. “We can’t submit an MDS without documentation to support that PDPM diagnosis.”

MDS reports are not only vital to ensure that facilities are getting proper reimbursement for the treatment they provide, but that the right care is being given to patients. If MDS assessments aren’t completed, there can be regulatory concerns as the RAI (resident assessment instrument) process is interrupted — which includes developing care plans based on the MDS.

Faulk said the PDPM model is “nursing driven” and that all the information and diagnoses that nursing facilities are waiting for in order to process a claim or MDS can often be missing when agency staff is involved.

Focused Post Acute Care Partners has had to take “strategic measures” with staffing agencies to avoid such problems, such as not allowing certain temporary workers into their buildings due to documentation compliance issues.

Morris uses other nurses to back up their MDS documentation process to ensure it’s done correctly.

“As far as the documentation, I would look at what you’re asking your staff to do,” she said. “Try to find a way to make it easier and look at what is not critical.”

In fact, ensuring there are checks-and-balances when it comes to MDS coordination was recommended by both nursing home leaders.

Focused Post Acute Care Partners uses regional MDS coordinators who review every single MDS claim and clinical documentation.

Improving PDPM training for frontline staff

Margins remain very tight for SNFs – long-term care settings in Minnesota saw an “abysmal” financial performance in March with a median operating margin of -8.7%, a survey of 156 care centers and 179 assisted living settings conducted by the Long-Term Care Imperative revealed.

Given these financial strains, training as it relates to the PDPM process is more important than ever. Such training can be essential in ensuring a facility avoids coding errors and missed payments.

“Sometimes it’s just one number or one letter [that leads to a misdiagnosis with PDPM],” Faulk said.

Prestige Healthcare essentially redid its PDPM training over the course of the pandemic, according to Morris. Prestige’s particular model is focused on higher acuity patients, which lends itself to higher categories of payment, she explained.

“We went to the staff, not just to train them but to spend one-on-one time with them and asked them to participate in a training from the building level,” she said. “I think that really helped with turnover because they were so engaged and didn’t leave.”

Focused Post Acute Care Partners has also looked to “hone down” its education by doing it in smaller groups, and is seeing the staffing rebound and its use of agency tapering.

“We’ve actually revamped a lot of our education and training when it comes to PDPM because we do need that documentation from the front line staff,” said Faulk.

Maximizing reimbursement through technology

Faulk believes investing in technology is “the way to go” to improve reimbursement processes given the current staffing shortages the industry is seeing.

While the health care industry added an estimated 34,300 jobs in April, only 900 of those jobs were in the skilled nursing sector. That data comes after the long-term care industry reportedly lost 2,500 jobs in March— further deepening a labor crisis to a level not seen since 2007.

Using technology to streamline documentation and workflows to improve compliance can also assist with staff retention, according to Faulk.

Both Prestige Healthcare and Focused Post Acute Care Partners have also tried to push their physicians practitioners to go “more electronic” as a way to improve their reimbursement reporting.

“Technology has been our friend,” Faulk said. “Especially when you don’t have the consistency of staffing.”

Focused Post Acute Care Partners uses several softwares in regards to reimbursement. The company has incorporated technology that can look at a claim after it’s been submitted, and if there’s something that is missed, the software corrects it.

Artificial intelligence systems can also be used to not only correct documentation but identify the person who did the initial charting or documentation that doesn’t reflect what’s really going on with that resident. 

“We’ve done surveys with our staffing in regards to how much technology that we use as an organization, and I would say it’s 80/20,” Faulk said. “There’s 20% that say it’s too much and they feel like it takes more time to have to log into that particular software and look at that information rather than just looking at the chart itself and doing it that way. But 80% like the fact that some reports are already automated.”



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