Therapy Management & Consulting Services Blog

CMS Releases Proposed Payment Reform Model

Communication Is Key to Success!
HealthPRO® Heritage is preparing initial training/details related to Friday’s CMS announcement, as well as details related to our philosophy and strategy for tackling the New World of payment reform. Our management teams will participate in internal trainings this week so we are best able to answer your questions and support your strategy.

Register now for our webinar on Friday, May 4, 2018 at 12:00 PM EST.


On Friday, April 27, Centers for Medicare and Medicaid Services (CMS) released the 2019 Proposed Rule. Our industry has been anxiously awaiting this announcement since April 2017’s Advanced Notice Pre Rulemaking (ANPRM) which proposed the Resident Classification System, Version 1 (RCS-1).

Among the many changes outlined, CMS provided details related to Medicare Payment Reform under a new name: “Patient-Driven Payment Model,” or PDPM. This model is revamped version of RCS-1, and PDPM includes additional data analytics and reflects comments received since the ANPRM. 

Proposed to launch October 1, 2019, the transition to PDPM will allow providers more than one year to prepare. Please note: Friday’s version is a “proposed” rule and is subject to change. Comments will be received until June 26 and released as the Final Rule on August 1.

Following a thorough review of the 266-page “Proposed Rule” document (in addition to a 186-page acumen skilled nursing facility patient-driven payment model technical report) HealthPRO® Heritage experts offer the following highlights:

  1. Proposed implementation: October 1, 2019
  2. Updated study population to include FY 2014 to FY 2017, a more relevant data set.   (e.g.: post-Bundled Payment Care Improvement Initiative)
  3. PT/OT separated into two separate components for PT and OT in response to ANPRM comments
  4. Reduced number of payment groups for PT and OT components (30 to 16 groups), the SLP component (18 to 12 groups), and the nursing component (43 to 25 groups) in response to requests/comments to simplify payment groups
  5. Variable per diem payment schedule for PT and OT components are simplified. (Instead of a 1% reduction in payment every 3 days after Day 14 as proposed under RCS-I, the revised payment model reduces payment 2% every 7 days after Day 20.)
  6. Functional measures used for the PT, OT, and nursing components were replaced with new measures based on IMPACT Act-compliant Section GG items.
  7. List of comorbidities for payment in the NTA component using multiple years of data was revised (in response to stakeholder concerns about the robustness of the model.)
  8. After investigating possibility of including comorbidities related to PT and OT utilization,  CMS determined that few conditions have a notable impact on PT or OT costs per day, so no comorbidities were included in these components.
  9. Revised cognitive scoring on the Cognitive Performance Scale to include cognitively intact at a score of 0.
  10. Mapped ICD10 codes to primary reason for SNF stay vs SNF admission
  11. Change OMRA revised to the IPA (interim payment assessment) as the only way to adjust payment after the 5 Day assessment 
  12. Reinstated Group and Concurrent with combined 25% cap per discipline

Additional Resources
CMS has released an updated SNF PDPM Provider Specific Impact Analysis,SNF PDPM Grouper Tool, as well as SNF PDPM NTA Comorbidity Mapping for your review. 

Click here to view the SNF PDPM Classification Walkthrough which reviews the resident classification for payment and how per diem payment calculations under PDPM.

HealthPRO® Heritage Guidance
This sweeping change was inevitable, and HealthPRO® Heritage has been preparing for several years for this shift! Our ability to assimilate these proposed changes stay focused has put our organization and our clients in an optimal position to excel under the proposed payment model. 

Consider examples of HealthPRO® Heritage’s strategies and initiatives that have supported clients in navigating market place changes proactively:

  1. Implementation of “Safe Transitions Program”
  2. “CARE Tool” certified clinicians (and training for our clients RE: Section GG)
  3. ICD-10 coding pilots (with a focus on accurate and strategic coding initiatives)
  4. Education RE: the ANPRM
  5. “Quarterly Business Reviews” using hospital and competitive scorecard data as well as the CMS provider impact file to understand competition/position under an RCS-1 model.
  6. Open dialogue with our clients regarding strategic conversations about the future of payment reform
  7. Growing Consulting Services and deliverables for Care Redesign, and fortifying market position

Tags: CMS, snf, RCS-1, CMS Update 2018, Patient-Driven Payment Model, PDPM