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Denial Uncertainty in the Wake of PDPM: What Will Risk Look Like?

When thinking about the future of skilled nursing and therapy services one quote comes to mind: “The biggest risk a person can take is to do nothing.” (Robert T. Kiyosaki) This has never been more true.

Under RUGS-IV, therapy utilization, by and large, has been the main driver for Medicare Part A reimbursement. When the skilled stay is supported by therapy, justification for nursing services can be overlooked. Under PDPM, however, each discipline, nursing and/or therapy, must justify the level of services provided and the patient’s condition as coded within the medical record. Without proper coding, claims could be denied or reimbursement will not be aligned with treatments. 

CMS has not explicitly indicated what metrics will be reviewed during audits.  However, they have repeatedly stated throughout the Final Rule that they will be looking at “provider behavior.” What is “Provider Behavior”, you might ask?  The following quote is typical of the language peppered throughout the published rule and is rather indicative of their intent: 

We [CMS] appreciate the support we have received for PDPM and its goals. With respect to the concerns raised by commenters with regard to the potential impact of PDPM on patient care, specifically the possibility that some providers may stint on care or provide fewer services to patients, we plan to monitor closely service utilization, payment, and quality trends which may change as a result of implementing PDPM. If changes in practice and/or coding patterns arise, then we may take further action, which may include administrative action against providers as appropriate and/or proposing changes in policy (for example, system recalibration, rebasing case-mix weights, case mix creep adjustment) to address any concerns.”

CMS has given us several indicators throughout the Final Rule, as to what components of provider behavior will be of interest to them including skilled nursing services, ICD-10 coding, therapy volume and utilization of group and concurrent treatment, Interim Payment Assessments (IPA), Interrupted Stay Policy and Non-Therapy Ancillary (NTA) coding just to name a few. Consider that significant shifts in behavior will raise eyebrows and open providers up to increased scrutiny through audits. It’s also clear that CMS realistically understands that some change in MDS coding of nursing care, therapy volume, intensity and treatment modes is expected and in fact intended through the implementation of this system. Their focus is on patient-driven decision-making related to optimal care outcomes and to that end they expect that positive changes in skilled nursing and therapy delivery, such as embracing the forgotten and under-utilized modes of therapy like group and concurrent, accurately capturing patient co-morbidities and skilled nursing care that can be of enormous benefit to the patient and ensure correct levels of reimbursement.

Under PDPM, Provider A will receive $12 less (rehab component) per Medicare A patient day than Provider B even though they received the same RUGs rate. This might lead one to assume that CMS is expecting some change in minutes delivered. However, while minutes delivered won’t drive payment, CMS has clearly said if they see a significant decline in provided therapy minutes, they could use that decline as justification to reduce payments in future years.

As we look ahead to the changes in concurrent and group therapy it is important to ensure that the clinical rationale for these types of treatment is reflected in the documentation. Given the current ratio of individual to concurrent and group therapy services CMS will surely be monitoring any significant increases in utilization and will be monitoring to ensure that providers are adhering to their specific limitations and clinical indications.

While we don’t have a crystal ball that tells us exactly how and what they will audit, we do know that the criteria for SNF Skilled Level of care are not changing. Interdisciplinary documentation to support these 4 criteria remains critically important than ever as they review the SNF stay less in terms of volume and more in terms of patient need:

Care in the SNF is covered if all of the following four factors are met:

  • The patient requires skilled nursing services or skilled rehabilitation services;
  • The patient requires these skilled services on a daily basis; and
  • As a practical matter, considering economy and efficiency, the daily skilled services can be provided only on an inpatient basis in the SNF.
  • The services delivered are reasonable and necessary for the treatment of a patient’s illness or injury.

It is important to remember that the criteria for medically reasonable and necessary services also will not change under PDPM. (Chapter 8 §30.2 and Chapter 15 §220.2 of the Medicare Benefit Policy Manual). Even so, you may be feeling like documentation requirements change frequently which makes it difficult to keep up. The truth is, basic requirements surrounding documentation of skilled services has changed very little over the years. The shift to PDPM is no different. The requirement for quality documentation to the skilled services provided and the need for those skilled services by the beneficiary will not change but will likely be more important than ever before as payment shifts from a volume-based system to a patient and quality-driven system.

What does that mean for denials and your risk of revenue loss?
Notwithstanding technical denials that result from signature errors, physician certification issues, and miscoding of ADL scores, therapy documentation under RUGS-IV is far more scrutinized. After all, if therapy is the reason the patient is receiving skilled services and payment is based on those therapy services delivered, then the risk is clear. Poor documentation from therapy increases the risk of denied payment. Under PDPM however, other areas of the medical record will be highly scrutinized as well.

If therapy services don’t drive payment,
then is therapy documentation really all that important?

YES! Again, documentation requirements will not change. CMS has been clear in all its correspondence, that documentation must continue to show the skilled nature of all services delivered and that changes in payment have not and will not change what is and what is not considered skilled.

What will denials look like under PDPM?
While no one yet knows for sure, we can guess based on the current review environment. The only unknown is the impact these denials will have on reimbursement. While we commonly see RUG down-codes under RUGS IV, the format in which payments will be altered under PDPM is as yet unknown. We anticipate that reviewers will continue to look for documentation to support MDS coding:

  • Is ICD-10 coding accurate, specific and supported by the documentation?
  • Does medical necessity for the altered diet exist?
  • Does documentation adequately support the presence of a swallowing deficit?
  • Does documentation of both nursing and therapy support section GG coding?
  • Does documentation support coding of cognitive declines?
  • Are services reasonable and necessary based on the patient’s medical condition?

In short, anything that drives payment or supports the skilled services as coded on the MDS will be reviewed and if not adequate could result in denial. Denials related to the medical necessity of services provided rather than technical aspects can be tougher to fight using up valuable resources along the way.

Where do you start?
It’s vital that providers begin a review of current documentation, coding and billing practices and begin working on any areas that might open the door for a denial. Assess ADR response processes and employ an interdisciplinary approach with all aspects of patient care. HealthPRO® Heritage is also a trusted, consultative partner leading the industry in PDPM readiness. Our deliverables: strategy, education, and execution on key clinical competencies that are crucial to PDPM success.

Written By:  Alissa Vertes, Chief Compliance Officer and Nicole Clark, VP of QAC 


Tags: PDPM