The Medicare Part A Resource Utilization Group (RUG) Prospective Payment System (PPS) is driven by the number of therapy minutes needed by patients. Use of therapy minutes as the unit of measure for payment is referred to as a “service-based metric.”

As part of its broader Medicare policy agenda, as well as in the post-acute care space, the Centers for Medicare & Medicaid Services (CMS) has long been moving away from service-based metric payment to purchasing for quality of care. Stated another way, paying for value over volume.

Holistic Care In

The Patient-Driven Payment Model (PDPM) eliminates therapy minutes as the metric for payment entirely. Therapy minutes only are accounted for on a patient’s discharge Minimum Data Set (MDS) assessment using Section O items. Claims must match the discharge MDS assessment. In place of therapy minutes, PDPM uses patient characteristics, or clinical information, to define payment rates for care.

Under PDPM, CMS’ expectation is that skilled nursing facilities (SNFs) will plan “holistically” for patient care. It’s worth examining CMS’ language in the final rule:

“While patient case-mix classification, for purposes of payment, would be driven by medical information, as
occurs under the current payment system, care design should be driven by patient goals and needs, as well as discussions with the patient and his or her family.

“Further, while under the current payment model, over 90 percent of patient days are paid for using a therapy RUG, which utilizes only therapy minutes and ADLs [activities of daily living] as the basis for payment, PDPM provides a more holistic approach to payment classifications. More specifically, by separately adjusting for the nursing component [emphasis added], which utilizes patient interviews as a major component of patient classification, we believe that this achieves the commenter’s goal of elevating the patient’s voice.” (See CMS PDPM Webinar, 12/11/18; Final Rule, 2019, page 39189.)

A similar concept in the Requirements of Participation, called the Comprehensive, Person-Centered Care Plan, is worth noting (see RoP Section 483.21, Final Rule page 652). CMS is sending a clear message through payment and regulatory policy that better and more regular communication on care planning is expected.

What does This Mean for SNFs?

CMS expects to see “holistic” care planning. And, the agency has made clear this expectation in the design of PDPM by linking component classification. In typical SNFs Section G, and now Section GG, items were completed by therapy departments of contractors and shared with MDS staff for coding under RUGs. With PDPM, CMS has created a very different paradigm by linking certain physical and occupational therapy component classification elements in Section GG to Section GG functional items used for nursing component classification. By linking these components, CMS makes concrete its expectation that SNFs use a holistic approach to care planning.

Such an approach only can be achieved by developing new or significantly expanding nursing and therapy staff communication at admission and throughout a patient’s stay. In many SNFs, such communication is not well structured and generally not sufficient for staff to agree on Section GG items or, more broadly, meet CMS expectations for holistic care.

Action Steps

A clear must-do for SNFs, in preparation for the PDPM transition, is developing new interdisciplinary team communication strategies that focus on team consensus building in order to craft a care plan and maintain it with ongoing patient input. SNF leadership teams should open discussions, now, with their nursing and therapy staff to assess how they currently communicate and operate compared with what is needed under PDPM.

Improved communication will be critical for accurate patient classification into accurate component case-mix groups for payment and to ensure SNFs are aligned with CMS’ regulatory expectations.
Mike Cheek is senior vice president, reimbursement policy, 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.