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Updated: Sep 13, 2019

Written by,

The Patient Driven Payment Model is the biggest reimbursement and regulatory change of Medicare and skilled nursing facilities since the implementation of the PPS and RUGs system in 1998. It is our goal to provide guidance to SNFs to navigate the transition from RUG-IV to PDPM successfully for the benefit of our patients.

For Medicare Part A RUG-IV billing ends on 9/30/19 and PDPM billing begins 10/1/19. The 2 payment systems will not run concurrently.


- Impacts all Med A patients who are in the facility on September 30 through October 1, 2019.

- FOR RUG-IV: required RUG-IV PPS assessment on or before September 30, 2019 that covers payment through September 30, 2019.

  • Note: Patients who admit on September 27 to September 30, 2019 will not have an opportunity to capture 5 distinct calendar days of therapy and will therefore obtain a Non-Rehab RUG score for the 5-day assessment.

- FOR PDPM: mandatory Transitional IPA required October 1 through October 7, 2019.

  • The ARD to be set no later than October 7, 2019.

  • October 1, 2019 will be considered Day 1 for the variable per diem schedule.

  • This variable per diem schedule includes patients admitted prior to October 1, 2019.

  • PDPM implementation will require efforts in data collection including a 3-day look-back period of GG items, completion of the BIMS and PHQ-9 interview, and all other items that will be required on the IPA MDS.

- On October 1, 2019, the MDS form will no longer support completion of retired scheduled and unscheduled PPS assessment types including the 14-day, 30-day, 60-day, 90-day, Change of Therapy, End of Therapy, and Start of Therapy.

- A new Optional State Assessment (OSA) will be added as an option to the MDS form to allow for completion of state required assessments. This assessment type can also be selected for insurance plans that remain following the RUG-IV PPS schedule.

Facilities will need to validate how HMO’s will pay on/after 10/1/19. If the HMO plan will still pay based on RUGs, set ARDs as Optional State Assessment (OSA) to calculate RUG-IV RUG level. An “unofficial” list of Skilled HMO’s that have identified they will be adopting PDPM:

  • Aetna

  • MyCare Ohio

  • Molina

A new concept to be aware of under PDPM: THE INTERRUPTED STAY.

  • The patient is discharged from Part A covered SNF care and subsequently readmitted to Part A covered SNF care in the same SNF during interruption window.

  • The Interruption window is a 3-day period that begins on the first non-covered day and ends at 11:59 pm on the third consecutive non-covered day.

  • If the interrupted stay occurs and the patient returns to the facility within the three days: NO NEW 5-DAY ASSESSMENT IS REQUIRED. An optional IPA may be completed.

  • If the patient is readmitted to the same SNF or a different SNF outside the interruption window: A NEW 5-DAY ASSESSMENT IS REQUIRED.

Note: The existing rules surrounding what constitutes a facility discharge or skip day still apply.


  • Adequate staffing for MDS department. The “hard stop” of PPS ending on September 30, 2019 and the mandatory IPA assessments for all Med A patients will create an increased burden for completing assessments for the transition period.

  • Make final preparations in providing education and preparing staff for this change.

  • Begin validating the primary reason for skilled stay diagnosis, which will be entered into I0020B for all Medicare A patients now and ensure it maps to a clinical category and is not a “return to provider” code.

  • Ensure that the appropriate and complete medical records from the hospital are coming to the facility with each new admission.

  • Begin having IDT discussions with the current skilled caseload and reviewing clinical changes that occur. Practice coding as if these patients were under PDPM and have educated discussions on whether or not an IPA assessment would be beneficial as a result of the changes.

  • As we near to the end of September, be sure all Medicare A patients on caseload have a RUG IV ARD set on or before 9/30/19.

  • All patients expected to be present for the “transition” from 9/30 to 10/1/19 have the mandatory IPA ARD set with tools in place to collect needed data to support the IPA assessment.

The transition from RUG-IV to PDPM will require all hands on deck and careful daily communication between all departments that may impact patient classification into Case-Mix Groups for PT/OT, ST, Nursing, and Non-Therapy Ancillaries. It’s important to have a clear understanding of what qualifying criteria establish Case Mix in each of the components and how to validate through strategic triple checks, upon admission, after the initial assessment (5 day) ARD, before the MDS is locked and submitted, then again at the end of month to assure all details are accurate before month end close. PDPM can be a great approach for both patients and providers if all disciplines work collaboratively with a patient-centered focus to determine all of their qualifying clinical needs, then deliver on that care through clinical excellence.



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