The Centers for Medicare & Medicaid Services (CMS) is changing how skilled nursing facilities (SNFs) will be paid for Medicare Part A services. This change impacts how physical and occupational therapy and speech-language pathology services (PT, OT, SLP) will be reimbursed and could impact how providers furnish therapy.

Daily Skilled Services:

Defined under Medicare Benefit Policy Manual, Chapter 8, Section 30.6:

“… A patient whose inpatient stay is based solely on the need for skilled rehabilitation services would meet the ‘daily basis’ requirement when they need and receive those services on at least five days a week. (If therapy services are provided less than five days a week, the ‘daily’ requirement would not be met.)”

Since 1998, SNFs have been paid under the resource utilization group prospective payment system (RUG-IV PPS). Under RUG-IV, therapy payments are based on the number of days and minutes of services under a single component. RUG-IV includes six therapy payment levels: Ultra-High, Very-High, High, Medium, Low, and Therapy Non-Case Mix.

For dates of service beginning Oct. 1, 2019, providers will receive Medicare Part A per-diem payments under a newly established patient driven payment model (PDPM) resident classification system. Under PDPM, there will be separate per-diem payment rates for PT, OT, and SLP services.

These rates will be determined by resident characteristics reported on the SNF PPS five-day minimum data set resident assessment instrument (MDS-RAI) at the start of the Part A stay. The rates could be modified during a stay using an optional interim payment assessment (IPA) if the resident’s care needs change. The therapy rates are combined with Nursing, Not-Therapy Ancillary, and Non-Case-Mix components to determine the total daily rate.

For the PT and OT components, there are 16 different case-mix payment levels. The SLP component includes 12 case-mix payment levels.

The PT and OT PDPM payment rates will be determined first by the primary reason for the SNF stay, which usually reflects ICD-10-CM diagnosis code reported on MDS field I0020B. In some cases, a surgery during the hospital stay prior to the admission, reported in section J of the MDS, could further clarify the primary reason for the SNF stay. The resident’s function related to eating, oral hygiene, toileting hygiene, bed mobility, transfers, and walking assessed during days one through three of the stay and reported in section GG of the MDS is used to refine payments within each diagnosis.

The PDPM SLP component rates are determined by the presence or absence of five categories of information reported on the MDS. These include: 1.) an acute neurologic condition as the primary reason for the SNF stay; 2.) any of 12 SLP comorbidities; 3.) a cognitive impairment; 4.) a mechanically altered diet; and 5.) a swallowing disorder. Several of the SLP comorbidities can only be reported via ICD-10-CM codes entered in section I8000 of the MDS.

While the SLP per-diem rates remain fixed, after day 20 of a resident’s Part A stay, the PDPM PT and OT component per-diem rates decline by 2 percent every seven days through the remainder of the benefit period.

Under PDPM, therapy minutes and days will continue to be reported on the five-day SNF PPS assessment for CMS analysis purposes but will no longer impact payment.

CMS is adding new therapy reporting requirements for the SNF PPS discharge assessment to track compliance with the PDPM limits on the amount of group and concurrent therapy that can be furnished during a resident’s entire stay. Providers will report the start and end dates, total treatment dates, and total therapy minutes for each therapy discipline.

The therapy minutes must be allocated by the mode of delivery, whether it be individual, concurrent, or in a group. Within each therapy discipline, no more than 25 percent of the minutes during a resident’s stay can be furnished via group or concurrent therapy combined.

While PDPM offers providers more flexibility to provide the right therapy care at the right time, the underlying Medicare benefit and coverage policies remain unchanged. CMS has indicated that as providers implement PDPM, it will be closely monitoring for significant changes in therapy service patterns, particularly if they mirror changes in quality that are now easily tracked by MDS, claims-based hospital readmission data, and other sources.

The PDPM person-centered approach of paying for PT, OT, and SLP services under Medicare Part A by basing payment on a resident’s characteristics rather than on the amount of therapy furnished represents a significant change, and providers may need to reflect on their care delivery models. With thoughtful preparation, the transition to PDPM may facilitate innovative value-based care model development.

Dan Ciolek is associate vice president, therapy advocacy, for the American Health Care Association. PDPM Update is a new Provider monthly feature that will bring more details about the new PPS system as they are released by CMS over the coming year.