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On July 31st, 2018, the Centers for Medicare & Medicaid Services (CMS) issued the final rule for Fiscal Year (FY) 2019 Skilled Nursing Facility (SNF) Prospective Payment System (PPS) scheduled to be published August 8th.
The rule establishes a market basket update for SNFs of 2.4 percent, which represents an overall increase in Medicare payments to SNFs of $820 million. The rule also finalizes SNF Value Based Purchasing, SNF Quality Reporting Program (QRP), and the Patient-Driven Payment Model (PDPM).
The Patient-Driven Payment Model (PDPM) is set to take effect beginning on October 1st, 2019 and will replace the current PPS RUGs-IV model. CMS notes that this effective date will allow one year for provider education and training, internal systems transitions, and for states to make any related Medicaid program changes necessary based on the PDPM changes. The combined limit on the provision of group and concurrent therapy of 25 percent was finalized as proposed.
Final Rule Essentials:
Value Based Purchasing: Incentives the prevention of unplanned readmissions
  • Positive or negative incentive payments will apply based on the facility’s Readmission Measure.
  • The measure is a single claims-based all cause 30-day hospital readmissions measure
  • SNF Readmission Measure (RM) rate reports can be found in the QIES ASAP system

Quality Reporting Program: Involves submission of specified quality data via the MDS
  • SNFs are subject to a 2-percentage point reduction to the otherwise applicable annual market basket percentage update if they fail to submit quality data to CMS

Patient-Driven Payment Model: Medicare Part A Fee-for-Service Payment System
  • The final rule largely implements the FY2019 SNF PPS Proposed rule. PDPM completely replaces the RUGs IV classification system and focuses on resident clinical characteristics versus the former focus on therapy service intensity to drive reimbursement
  • Six components will be used to establish per diem rates: PT, OT, SLP, Nursing, Non-Therapy Ancillary and Non-Case Mix
  • ICD-10 coding accuracy on the MDS will be essential as MDS item I8000 will be used to determine each resident’s PDPM clinical category
  • Section GG is finalized for use as the functional measure (replacing Section G) with some modifications
  • 5-day and Discharge assessments are the only required PPS assessments. Note the OBRA assessment schedule will remain unchanged. The proposed new Interim Payment Assessment will now be an optional assessment under the finalized PDPM, used to resent payment when certain criteria are met.
  • CMS intends to release technical specifications and manual revisions – to include specific instructions on operationalizing the transition from RUG-IV to PDPM – “as soon as possible”.
Proactive is partnering with the following associations to offer a webinar series focused on the 2019 Changes including understanding PDPM and implementing an action plan to successfully transition by the October 1, 2019 effective date. Register for sessions in this series through any of the following associations:
Amie Martin
OTR/L, CHC, RAC-CT
Principal Consultant & President
Eleisha Wilkes
RN, RAC-CT
Clinical Consultant
Shelly Maffia
MSN, MBA, RN, LNHA, QCP
Director of Regulatory Services
Proactive Medical Review
(812) 471-7777 | www.proactivemedicalreview.com