MDS Alert

The numbers are in on PDPM, and CMS is realizing its bets were off.

The 2022 proposed rule for SNFs is out, and few stakeholders are surprised at the meat of the rule.

The FY 2022 proposed rule affects Medicare payment policies and rates under the skilled nursing facility (SNF) prospective payment system (PPS), but also includes proposals for the quality reporting program (QRP) and the SNF value-based program (VBP).

One major takeaway: CMS underestimated the costs to SNFs for providing speech language therapy (SLP), nursing, and non-therapy ancillary (NTA), and are rejigging case mix indices in response. “We overshot SLP by 22.6 percent; Nursing by 16.8 percent and NTA by 5.6 percent. CMS thinks these components are why they underestimated payments. They are quite correct,” says Judy Wilhide Brandt, RN, BA, CPC, QCP, RAC-MTA, DNS-CT, principal for Wilhide Consulting Inc. in Virginia Beach, Virginia. “When it began to matter, we started digging into those records.”

Dig Deeper to Maintain Reimbursement Levels

This is the first full year of the Patient-Driven Payment Model (PDPM), and CMS seems a little surprised by their increase in spending — an underestimate to the tune of over a billion dollars.

“When finalizing PDPM, CMS stated that this new payment model would be implemented in a budget neutral manner, meaning that the transition to this new payment model would not result in an increase or decrease in aggregate SNF spending. Since PDPM implementation, currently available data suggest an unintended increase in payments of approximately 5 percent, or $1.7 billion in FY 2020,” CMS says in a release about the proposed rule.

To aim for achieving budget neutrality, CMS is looking to change their approach to the case mix indices (CMIs).

“They are proposing to recalibrate the case mix indices in an effort to lower their payments to us by 5% or approximately $1.7 billion. They are proposing delayed and/or phased implementation. Bottom line: They are going to lower our CMIs over the next few to several years,” Wilhide Brandt warns.

That means facilities are going to have to put in extra efforts to get paid for providing the same services.

“If you are at/above the national average, it’s time to dig deeper, capture more, push harder for records you need to raise your CMIs, because we are going to have to increase our rates by at least 5 percent to stay even when they make these reductions,” says Wilhide Brandt.

“Nursing homes across the country continue to dedicate extensive resources to protect their residents and staff from COVID-19. This ongoing work makes government support and robust reimbursement rates more important than ever. With the skilled nursing profession grappling with an economic crisis and hundreds of facilities on the brink of closure due to the pandemic, it is critical that Medicare remain a reliable funding source and reflect the increasing costs providers are facing,” says Mark Parkinson, president and CEO of the American Health Care Association.

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