During the mid to late 1990s, I was a physical therapist clinician and manager in a skilled nursing facility (SNF) chain. Then, Medicare Part A reimbursed resident stays based on cost methodologies and coverage, while payment and audit decisions were based on SNF level of care (LOC) criteria.  

We held brief daily or ad hoc meetings, typically including the administrator and staff from nursing, therapy, and admissions to discuss the LOC status of Part A residents as well as potential new admissions. These meetings are often referred to using terms such as admissions, stand-up, or utilization review.

The focus was to identify if any changes occurred that could impact the current discharge plan. Specifically, we sought to clarify whether the resident care was being “skilled,” those being furnished by nursing, or the therapies (physical, occupational, or speech), or both combined, and that our documentation supported such determinations, especially in cases where the resident’s status did not justify a need for daily therapy services.

Similar discussions applied to upcoming admissions to coordinate the admission activities between departments based on the expected needs of the resident.

With the onset of the resource utilization groups (RUGs)-based SNF prospective payment system (SNF PPS) in October 1998, the associated administrative LOC presumption policies, and because most SNF residents were classified into the rehabilitation RUGs, many SNFs changed the focus of such meetings to updating the minutes, days, and number of therapy disciplines involved in the resident’s care, with less focus on discussing skilled nursing needs.

This change in focus was further accelerated by subsequent SNF PPS policies associated with other Medicare-required assessments introduced to change payment rates associated with the start, end, or change in therapy services that occurred between the scheduled SNF PPS assessments. 

However, with the onset of the new patient-driven payment model (PDPM) on Oct. 1, 2019, to replace the RUGs-based SNF PPS, while providers continue to be required to provide an appropriate amount of therapy to meet a resident’s needs, the specific amount of therapy provided will no longer be a factor in the payment rates or the administrative level of care presumption determinations.

Providers should consider going “back to the future” and blow the dust off the old daily Part A meetings playbook and self-assess whether they are adequately discussing the SNF LOC criteria like we did before RUGs were introduced in 1998.

SNF LOC Criteria
The Medicare Benefit Policy Manual (BPM), Chapter 8, Sections 30 through 30.7.3, describes the following four factors that must all be met to be considered for Part A coverage (summarized):
  • The resident requires skilled nursing or skilled therapy services, furnished by or under supervision of professional or technical personnel, ordered by a physician and for a condition related to the prior hospital stay or that arose while in the SNF while treating a condition related to the hospital stay;
  • The resident requires skilled services on a daily basis—nursing seven days per week and/or therapy at least five days per week;
  • As a practical matter the services can only be furnished on an inpatient basis; and
  • The services must be reasonable and necessary for the condition, including duration and intensity.
The BPM also provides specific coverage determination details and examples that providers should review in preparing for revising these meetings, including:
  • Management and evaluation of a resident’s care plan;
  • Direct skilled nursing services;
  • Observation and assessment of a resident’s condition;
  • Teaching and training activities;
  • Skilled physical, occupational, and speech therapies; and
  • Skilled maintenance services.
Under the SNF PPS, a beneficiary who is correctly assigned to a case-mix group during the initial five-day Medicare-required Minimum Data Set assessment is automatically classified as meeting the SNF LOC criteria up to and including the assessment reference date for that assessment.

Claims for residents who do not meet these criteria would receive an individual SNF LOC determination using the LOC criteria discussed above.

Fewer resident admissions will be eligible for the administrative presumption under PDPM than were eligible under RUGs. Providers are encouraged to review the Centers for Medicare & Medicaid Services PDPM implementation page for more details.
Related CMS Resources
▪ Medicare Benefit Policy Manual (BPM), Chapter 8, Sections 30 through 30.7.3
▪ CMS Administrative Level of Care Presumption under PDPM Fact Sheet
▪ CMS PDPM FAQs (Section 6)

Self-Assessment of SNF LOC Meetings
As providers prepare for the transition from RUGs to the PDPM-based SNF PPS payment model, self-assessment and transition planning should include a review of daily SNF LOC meetings to determine if they are adequate to meet the different resident-centered focus of PDPM.

While the basic SNF LOC requirements are not changing, providers should consider preparedness for the renewed focus on resident characteristics for coverage determinations.

Daniel Ciolek is associate vice president, therapy advocacy, for the American Health Care Association.