Did you know that the traditional fee-for-service model in SNF billing has been eliminated now? The Patient-Driven payment model (PDPM) is the new solution for reimbursing the specialized services provided by skilled nursing facilities. However, the question is how different this new model is than the traditional model.

Simply put, skilled nursing facility billing under PDPM ensures reimbursement based on the clinical demands and case requirements rather than the therapy minutes. Even the slightest mistakes in navigating the requirements of this new billing system can be detrimental for practitioners’ revenue cycle management. This is where an expert SNF billing company comes to play. These experts are adept at tackling the complex billing procedures under PDPM, including coding requirements and documentation needs among others.

What is the patient-driven payment model?

The patient-driven payment model is a reimbursement model for Medicare and was initiated on October 1, 2019. This model has shifted reimbursement from the traditional method of paying practitioners based on the volume of care, to a payment model based on quality of care. Simply put, this new model intends to ensure fair reimbursement depending on the care provided based on the specific clinical demands of the patient. This reduces the chances of additional incentives based on high therapy minutes.

How do SNF bundled payments work?

Under PDPM, payers make a single and comprehensive payment to a facility for all the services rendered to a patient for a singular insurance covered stay. This promotes co-ordination and efficiency among different departments to provide quality care to patients, rather than simply focusing on volume. The bundles payments include every procedure and services rendered to the patient, including rooms, nursing, therapy, medications, and so on.

Key factors that affect SNF payment pates

PDPM billing impacts skilled nursing facility payments tremendously. Some of the key aspects include:

• Under PDPM, reimbursement is determined by a patient's clinical complexity, functional scores, and specific data-driven characteristics rather than just the amount of therapy provided.
• PDPM replaced the previous Resource Utilization Group (RUG-IV) system, eliminating incentives to provide high-volume therapy regardless of need.
• To ensure fair reimbursement and match costs incurred, payers have decided upon specific payments rate for a patient's stay, with adjustments for different skilled nursing facility services like physical therapy (PT), occupational therapy (OT), speech-language pathology (SLP), on-therapy ancillary (NTA), and nursing costs.
• PDPM also depends on data from the Minimum Data Set (MDS) to establish the appropriate classification of patient needs.

Why do SNFs not bill per service anymore?

The traditional fee-for-service model in skilled nursing facility billing primarily focused on reimbursing practitioners based on volume of care. This often triggered duplicate billings as in providing high volume of therapy without catering to the complexity of the patient’s unique needs. This new model was introduced to ensure a value-based payment model or consolidated baling (CB).

Role of the minimum data set (MDS) in PDPM

Under PDPM, minimum data set or MDS acts as the gospel tract for payers. Essentially, it is a comprehensive, standard assessment tool for payers to review a resident’s physical, functional, and psychological status. Simply put, it is a clinical document that holds detailed information regarding the patient’s medical status. Since under this model, payment is done entirely based on accurately capturing patient needs on the MDS and catering to the same; meticulous documentation is crucial.

Tips for accurate SNF billing under PDPM

Billers must adopt a calculative strategy while billing for these specialized services. Some of the best practices include:

• Ensuring proper code usage. For example, CPT codes like 99304–99306 are used to refer to initial care. Similarly, diagnosis of codes or ICD-10 codes usage is also crucial for proper reimbursement.