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CMS Gives Updates on Transition to PDPM

December 20, 2018
Documentation, Billing, & Coding By Kay Hashagen, Senior Consultant

 In July 2018, the Centers for Medicare & Medic aid Services (CMS) released information about the finalization of a new case-mix classification that will be used under the Skilled Nursing Facility (SNF) Prospective Payment System (PPS)-the Patient Driven Payment Model (PDPM). The plan will go into effect on October 1, 2019. 

Female patient listening to doctor with concentration

CMS recently provided additional details about this transition during a presentation where they revealed that having a mixed implementation period would create more difficulty for providers. 

How Will the New Payment System Impact Therapy Providers?

The transition between the two payment models is causing many tactical logistic questions, particularly for therapy. What will the results be from a billing perspective? Providers will have to complete an Interim Payment Assessment (IPA), with an Assessment Reference Date (ARD), for all SNF Medicare Part A patients, by October 7, 2019. Providers will then receive a Health Insurance Prospective Payment System (HIPPS) code that can be used for billing on PDPM's implementation date. 

There may be other areas of Medicaid affected by these changes such as the calculation of Upper Payment Limits. Because some states are currently using RUG systems to determine Medicaid rates, CMS is introducing the Optional State Assessment (OSA) that will allow providers to use their current RUG-III or RUG-IV models for Medicaid payments until September 20, 2020.

CMS is planning to monitor therapy levels during the transition to PDPM. One of the provision to the new payment plan is that no more than 25% to the total minutes can be group and concurrent therapy minutes.

With the changes, it is important for CMS to monitor the patient population and determine if the payment incentives are still influencing care decisions more than the needs of the patients. Depending on the results of these changes, CMS will have to decide how to appropriately address the concerns based on the scope of those levels. 

CMS has released many educational and training resources to assist with the preparation for implementation of the PDPM. These resources can be found here

Additionally, for more information on preparing for the transition, read our 7 part blog series "Preparing for the Patient Driven Payment Model (PDPM)."


 LW Consulting, Inc can help prepare for the transition to PDPM. For more information, contact Kay Hashagen, Senior Consultant at 410-777-5999 or email

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