Having difficulty calculating PDPM revenue and reimbursement? Are you seeing large credits or debits after your payment has been received? Does your billing staff have an understanding of the new HIPPS codes? Where to turn? We have the knowledge.

With payments now routinely rolling in for Medicare status following the inception of PDPM, there has been a large uptick in PDPM-related billing questions. While some are specific to a unique problem connected to technical compliance with consolidated billing rules or the facility’s accounts receivable software solution, the majority are associated with uncertainty around the payment and what tools and measurements should be utilized to proactively predict revenue or monitor incoming reimbursement.

Initially, most providers have seen an increase in their average Medicare daily rate. Should I be worried we set something up wrong in our system?

With the inception of the PDPM payment methodology, most providers received an initial “bump” in their payment as a result of the transitional IPAs that were completed to set up all existing Medicare A covered stays with billing rates to start and cover payment in October 2019. Because of the variable per diem incentive associated with the initial three days of a Medicare A stay, this allowed providers to enjoy a quick influx of cash that they would not have typically received. While this anomaly is related specifically to the October transition, to a lesser degree, we still see those highest rates days (one to three) on every initiated Medicare stay, so, if there is an increase in admissions and Medicare volume, there will be an effect.

When put into numbers, the variable per diem (VPD) increases the payment rate associated with the NTA (non-therapy ancillary) component by a factor of three times for the first three days of payment. Within the structure of the NTA, there are six different acuities identified: “NA” through “NF”. The payment, while regional, sees a swing between these acuities of close to $200 per day.

When you factor in the VPD, the swing within that rate based on characteristics of the individual beneficiary can be as much as $1,600! Even when considering the lowest possible acuities, the additional $300-$400 dollars adds up. If you started with 15 patients on your Medicare A caseload on October 1,2019 at the lowest rate you would have seen a positive bump of approximately $4,500 right out of the gate.

What are some of the techniques to make sure our staff can verify expected payment?

Help your team by giving them the tools to succeed. We recommend a solid triple check format to ensure your team is confirming the services provided and providing the documentation needed to support the billing. At a minimum, this triple check should include the biller who generates the claim, the MDS Coordinator (the person responsible for the diagnosis coding/sequencing) and a therapist to validate the types and frequency of therapy. With the release of the Final Rule prior to the October 1, 2019 start, new therapy thresholds were implemented that cap the overall utilization of an individual’s therapy program at no more than 25 percent of their total treatment plan comprised of concurrent OR group therapy. This is calculated at the end of the Medicare A stay and reported to CMS via the end of PPS Assessment. The table below represents the necessary checks and balances you should verify against the claim.

Another tool that leads to the best reviews when quality checking your information for accuracy, is the use of a PDPM rate calculator. There are many rate calculators on the market that give you the ability to predict the rate based upon the CMG score derived from the MDS. These calculators are available for purchase, can be found online as “freeware”, are offered by many of your state health care association advocacy groups, and are also embedded within many of the long-term care electronic software programs. For efficiency and accuracy, find one that allows for specification by geographic region and considers the facility’s current rankings within the Value Based Purchasing program.

We have the tools and we have the people!

It’s a whole new world and there is much to learn. PDPM represents a new method of payment that keeps all healthcare providers focused on what’s best for the industry. This culture shift will enable providers to bring value to their patient populations and ensure the payment associated represents that philosophy. While this is the new normal in post-acute healthcare services, we must recognize that it requires a different level of understanding and impacts all aspects of operations. Teams, health providers and healthcare billers must work together and collaborate to operate successfully within our industry.

To learn more about the services offered by Beacon Solutions Group, please contact our Beacon experts today.

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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