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PDPM readiness – Don’t overlook the billing office

By Andrea Hagen, on November 6th, 2019

Hopefully, your facility has spent time preparing for the new Patient-Driven Payment Model (PDPM) that went into effect on October 1, 2019. While much effort was likely dedicated to the nursing and clinical aspects of the payment system, the impact to the business office may have been overlooked. While billing staff may not need to fully understand the 5 case-mix adjusted components of PDPM (Physical Therapy (PT), Occupational Therapy (OT), Speech-Language Pathology (SLP), Non-Therapy Ancillary (NTA), and Nursing) there are some critical aspects with which they should be familiar.

The Interrupted Stay Policy of PDPM combines multiple Skilled Nuring Facility (SNF) stays into a single stay in cases where a resident’s discharge and readmission occur within a prescribed window. As a result, a resident’s Assessment Schedule and Variable Per Diem Schedule will be adjusted. A facility-wide understanding of this policy is needed to ensure compliance and accurate claiming. Each nursing home needs to develop processes that support adherence to the Interrupted Stay policy and promote communication between Admissions, Minimum Data Set (MDS), Census Management and Billing. Billers will need to make sure that each UB-04 claim form is accurately completed for those residents who either left the facility and returned or remained in-house but were discharged from a Medicare Part A stay and were later picked up under Part A. Special attention is needed in several areas of the UB-04:

  • Occurrence Span Code 74 and Dates reported in field locator (FL) 35-36
  • Revenue Code 0180 and Units to report Leave of Absence in FL 42 and unit in FL 46

The PDPM Assessment Schedule is simpler than the administratively burdensome RUG-IV Assessment schedule. Billers should be aware that the number of assessments has decreased.

Medicare MDS Assessment Type Assessment Reference Date Applicable Standard Medicare Payment Days
Five-day Scheduled Prospective Payment System (PPS) Assessment Days 1 – 8 All covered Part A days until Part A discharge (unless an IPA is completed)
Interim Payment Assessment (IPA) This is an optional Assessment. The date the facility chooses to complete the IPA is relative to the triggering event that causes the facility to choose to complete the IPA Assessment Reference Date (ARD) of the assessment through Part A discharge (unless another IPA assessment is completed)
PPS Discharge Assessment PPS Discharge: Equal to the end date of the most recent Medicare stay or end date N/A

The Health Insurance Prospective Payment System (HIPPS) codes and Assessment Indicator codes have changed under PDPM. Billers should become familiar with the new algorithm. Understanding which character of the HIPPS code is associated with each of the 5 case-mix adjusted components is advised, as is understanding which assessment is being reported:

HIPPS Character Assessment Type
1 PPS 5-day
6 Omnibus Budget Reconciliation Act (OBRA) Assessment (not coded as a PPS Assessment)

Default Billing continues to exist under PDPM. The default code is now ZZZZZ.

Facilities should continue to hold a monthly Triple Check meeting to review all claims. Representatives from MDS, Therapy and Billing should participate. Pre-work is needed by all participants so that the meeting can primarily focus on 3 key areas: principal diagnosis/ICD-10 sequence, correct HIPPS code and discharge destination coding.

Under PDPM, many facilities will find that claims submission can be completed earlier in the month. SNFs should now be able to easily submit billing by the 8th or 10th of the month – thereby assuring payment is received within the same month.

Billing/Payment Reconciliation is encouraged under PDPM. Payments should be thoroughly reviewed to ensure full payment was received. The Medicare Fiscal Intermediary Standard System (FISS) will show full payment and any partial payment processing. SNFs will no longer receive denial letters; therefore, payments should be scrutinized to ensure partial payments did not go unnoticed during payment posting. The billing office should immediately notify MDS/Utilization Management of denials so that records can be reviewed, appeals prepared and root cause analysis completed.

Billers need to ensure that necessary billing system updates have been completed prior to submitting October claims. By now each system vendor should have communicated information on their programming updates and provided training on new processes and reports. Lastly, billers will need to know which Medicare Managed Care payers are converting to PDPM, so they can make the necessary setup changes to allow for accurate claim creation.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.

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Written By

Andrea Hagen Oct13
Andrea Hagen
Chief Operating Officer, Beacon Solutions Group

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