CMS Posts Final Rule on PDPM Implementation

Posted on July 31, 2019 by Jeff Bostic

The Centers for Medicare and Medicaid Services (CMS) earlier this week released the final Skilled Nursing Facility (SNF) Payment Rule, which is the last step before implementation of the new Patient-Driven Payment Model (PDPM) that will take effect on Oct. 1. In addition to transitioning to the new case mix system, the Oct. 1 rates also include an inflation update of 2.4%. The rule makes few changes from the proposed rule that come out earlier this year, but it does finalize a definition of group therapy that allows up to six clients to be part of a treatment group as well as updating some requirements around ICD-10 coding that is a major driver of rates under PDPM.  

In addition to the annual inflation update, some additional rate practices continue to apply under PDPM.  The rates will be adjusted by updated wage indices, so the actual rates will continue to vary by region of the state.

Also, the Value-Based Purchasing Program (VBP) continues in its second year under PDPM. Adjustments for that program, which are determined based on performance on a hospital readmission measure, will continue to impact each facility’s rates based on their individual score. Between those adjustments and the implementation of PDPM, skilled nursing providers will likely notice substantial changes in payments in the year starting Oct.1.

The transition to PDPM is a major challenge for skilled nursing providers and the time left until implementation is down to only a couple of months. We hope that you have been taking advantage of our many educational offerings over the last year to help your staff be ready for the new system. 

In the final run up to Oct. 1 implementation, we will be rolling out additional tools to assist with the transition. This includes a rate calculator that will allow members to both calculate their rates factoring in all the components of the rate under PDPM, as well as allowing them to do revenue estimation across a group of projected clients.