November/December 2018

Coding Corner: Skilled Nursing Facilities Face Payment Changes
By Brandi L. Whitemyer, RN, COS-C, HCS-D, HCS-H, HCS-O
For The Record
Vol. 30 No. 10 P. 26

On August 8, the Centers for Medicare & Medicaid Services (CMS) published its Final Rule for the Skilled Nursing Facilities (SNF) Prospective Payment System (PPS), Value-Based Purchasing (VBP) program, and Quality Reporting Program (QRP). Per the Balanced Budget Act of 1997, the final rule outlines the annual payment rate adjustment for SNF PPS.

On October 1, fiscal year 2019 federal base rates increased payments to SNFs by 2.4% for all SNFs reporting quality data. Facilities that fail to report required quality data face a 2% payment reduction. CMS estimates the updates will result in an $820 million increase in payments to SNFs.

Other notable provisions outlined in the final rule include the following:

• policy updates to the QRP and the VBP program; and

• implementation of a revised case mix methodology.

SNF QRP
While no new quality measures were added to the SNF QRP and no quality measures were deleted, CMS finalized its decision to add a new removal factor measure: Factor 8. The costs associated with a measure outweigh the benefit of its continued use in the program. Factor 8, along with the seven other measure removal factors, will be used to evaluate each quality measure in the SNF QRP to ensure all of them meet the objectives of the Meaningful Measures Initiative.

The public display periods of two publicly reported claims-based measures (Discharge to the Community and Medicare Spending per Beneficiary) increased from one year to two years. CMS reports that this change will provide greater accuracy in SNF quality data reporting and be consistent with the inpatient rehabilitation facility and long term care hospital QRP public display periods for these same measures.

CMS also finalized its plans for the public reporting of the following assessment-based measures for medical rehabilitation patients beginning in Contract Year 2020:

• change in self-care score (NQF #2633);

• change in mobility score (NQF #2634);

• discharge self-care score (NQF #2635); and

• discharge mobility score (NQF #2636).

SNF VBP
According to the final rule, SNFs will receive incentive payments under the SNF VBP beginning October 1 and annually thereafter based on performance scores. Scores, which range from 0 to 100, are based on the SNF 30-day All-Cause Readmission Measure.

In order to improve the reliability of the SNF VBP scoring methodology, CMS has adjusted performance scores for SNFs that do not meet the threshold of 25 eligible stays during the program year. CMS recognizes that many small or new facilities may not meet the threshold. The adjusted performance score ensures these facilities are not excluded from participation and allows for some adjusted incentive payment.

To better align with other VBP programs, CMS has incorporated an Extraordinary Circumstances Exceptions (ECE) policy to the SNF VBP. The policy provides relief from program requirements should a natural or man-made catastrophic event occur during a program year. To be eligible, facilities must submit an ECE request form and supporting documentation to CMS within 90 days of the event. The facility must prove that the event was beyond its control and adversely impacted the care provided to residents.

If CMS approves the request and the SNF meets the 25 eligible stay threshold, the calendar month(s) during which the SNF was exposed to the extraordinary circumstance will be excluded so as not to affect the SNFs performance rate or score.

Implementation of Revised Case Mix Methodology
Effective October 1, 2019, CMS will replace the Resource Utilization Group, Version IV (RUG-IV) case mix classification system with the Patient Driven Payment Model (PDPM). This shift reflects CMS's "Patients over Paperwork" initiative, designed to reduce provider burden and administrative costs while shifting the focus of care models to the beneficiary. It's likely to also result in payment reform in a variety of provider settings.

Case mix classification within PDPM will provide a greater focus on the condition of beneficiaries, utilizing coding, clinical, and functional factors, including minimum data set (MDS) item responses as well as nontherapy (ancillary care) to determine case mix as opposed to length of stay and services received currently being used within the Resident Classification System, Version I/RUG-IV classifications.

While the non–case mix component will not change within the PDPM, the therapy and nursing components will be expanded to five separate case mix components: physical therapy (PT), occupational therapy (OT), speech language pathology (SLP), nursing, and nontherapy ancillary (NTA). Each of the five components has a distinct number of groups to which a resident may be classified: 16 each for PT and OT, 12 for SLP, 25 for nursing, and six for NTA.

All SNF residents will be classified to a single group under each of the five components, with case mix indexes and per diem rates applied based on the group. The full per diem rate is calculated by adding together all five component rates and the non–case mix component rate.

The specific case mix group to which a resident may be classified for the PT and OT components within the PDPM is determined by the primary diagnosis recorded in item I8000 of the MDS 3.0, classifying the patient into one of 10 clinical categories, and a functional score that is calculated based on responses found in section GG of MDS 3.0.

In addition to the primary diagnosis and the resulting clinical category, a resident will be classified to an SLP case mix group based on the presence of SLP comorbidities and/or cognitive impairment and the presence of a swallowing disorder and/or mechanically altered diet.

NTA case mix groups are determined based on the presence of one or more NTA-related comorbidities such as HIV/AIDS, parenteral feedings, morbid obesity, and stage 4 pressure ulcers. Nursing case mix groups are determined by calculating a nursing function score, which utilizes information recorded in section GG of MDS 3.0, and by determining the nursing classification. The nursing classification used in the RUG-IV model was continued in PDPM in the same hierarchical order: extensive services, special care high, special care low, clinically complex, behavioral symptoms, and cognitive performance and reduced physical function.

Given the emphasis on accurate ICD-10-CM code assignment in MDS item I8000, it is imperative that SNF staff, including MDS specialists and billing staff, are properly trained in current coding guidelines even though the PDPM implementation is a year away. CMS has recommended that facilities provide staff with professional coding education to ensure that beneficiaries are classified to the most accurate clinical category within the PDPM.

SNFs can verify accurate assignment of ICD-10-CM codes by referencing a current 2019 ICD-10-CM coding manual such as the Optum360 ICD-10-CM Expert for Skilled Nursing Facilities and Inpatient Rehabilitation Facilities. Facilities should delegate coding responsibilities to specific staff and establish clear lines of communication between all staff involved in the assignment of ICD-10-CM codes. This will ensure that the diagnosis assigned as the primary reason for SNF admission on the claim reflects that assigned on the MDS.

For accurate case mix assignment based on functional score, MDS specialists should collaborate with all involved staff therapists within the mandatory 14-day timeframe. While the MDS may be completed at any time during the 14-day period, the full time allotted should be taken to ensure that a thorough assessment and proper information gathering were conducted to accurately answer each of the MDS GG items. Failure to answer even one of these items appropriately could result in the inappropriate PDPM case mix classification of a beneficiary. Discharge outcomes may also be impacted by failure to accurately select the most appropriate GG response to reflect the patient's functional impairment at admission.

A Shift in Focus
With the enhanced focus on VBP incentives, quality, and patient-focused care, SNFs must begin to be less "days of therapy" focused. Instead, special attention should be paid to the development of comprehensive treatment programs that can improve the overall abilities of patients in a cost-effective manner.

Involving case management, holding interdisciplinary meetings, having discussions with the patient's family, and beginning discharge planning at admission can provide for a more patient-specific care plan and allow staff to review case mix factors early in the stay.

Skilled nursing facilities can access information on SNF PPS education and training as well as the 2019 SNF PPS Rates on the CMS website at www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html. Information on the PDPM, including Clinical Category Mapping, Comorbidity Mapping, Grouper Tool, and analysis, can be accessed at www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/therapyresearch.html.

— Brandi L. Whitemyer, RN, COS-C, HCS-D, HCS-H, HCS-O, specializes in postacute care as a clinical technical editor at Optum360, a provider of revenue cycle management technologies that helps hospitals and physician practices improve their financial performance and put patients in control of their financial health.