Share This Post

Understanding PDPM and the Medicare Benefit Policy Manual Chapter 8

November 06, 2019
Reimbursement By Kay Hashagen, Senior Consultant

With the focus on changes in reimbursement requirements related to the Patient Driven Payment Model (PDPM) that has taken effect October 1, 2019, one might not be thinking about the Medicare requirements that remain unchanged.  The Medicare Benefit Policy Manual (MBPM) Chapter 8, provides fundamental rules and regulations that are the foundation of Medicare Part A for the Skilled Nursing Facility (SNF). It is important to remember that these rules are NOT changing.  One might even presume, that under PDPM reimbursement, the documentation that demonstrates the need for skilled care, related to the patient characteristics that are supporting the reimbursement, will more closely be reviewed. 


The general requirements for defining a skilled level of care in a SNF remain unchanged. They include:

  1. The requirements that services must be performed by or under the supervision of professionals, ordered by a physician, and that services must be rendered for a condition for which the patient received inpatient hospital services or for a condition that arose while receiving care in a SNF for a condition for which he received inpatient hospital services.
  2. Skilled services must be provided on a daily basis.
  3. Daily skilled services can be provided only if the services are reasonable and necessary for the treatment of the patient’s illness or injury. For example, the services must be consistent with the nature and severity, and reasonable and necessary in terms of duration and quantity.

Other PDPM Considerations

  • The reason for the SNF stay is a requirement under PDPM. However, to determine the primary diagnosis code, the diagnosis must still relate to a qualifying hospital stay.
  • PDPM no longer tracks End of Therapy (EOT) to ensure five days of skilled therapy with no break from therapy for greater than three days, but the combined skilled nursing and rehabilitation documentation must support the requirement for daily care.
  • If the patient characteristics that are being used for the Health Insurance Prospective Payment System (HIPPS) billing codes are no longer requiring skilled services, the facility should consider if the patient should be discharged from Medicare Part A or have an Interim Payment Assessment (IPA) to support the residual diagnosis. The documentation must clearly demonstrate skilled care that relates to the patient characteristics for the reimbursement codes. 

Section 30.1 Administrative Level of Care Presumption outlines that beneficiaries who are admitted (or readmitted) directly to a SNF after a qualifying hospital stay are considered to meet the level of care requirements. Per Centers for Medicare & Medicaid Services’ PDPM FAQs, for services furnished on or after October 1, 2019, the following are designated as classifiers that can serve to qualify a beneficiary for the Care Presumption. 

  • Those nursing groups encompassed by the Extensive Services, Special Care High, Special Care Low, and Clinically Complex nursing categories;
  • PT and OT groups TA, TB, TC, TD, TE, TF, TG, TJ, TK, TN, and TO;
  • SLP groups SC, SE, SF, SH, SI, SJ, SK, and SL; and
  • The NTA component’s uppermost (12+) comorbidity group.

If a patient meets any of the four PDPM-related criteria above, the patient qualifies for the presumption.  Refer to the updated CMS Transmittal 261 for scenarios.

The 30-Day Transfer Rule still applies and the new Interrupted Stay Policy should be noted for PDPM initiation October 1, 2019.

Per §30.2.2 Principles for Determining Whether a Service is Skilled outlines that the documentation must clearly demonstrate that based on the inherent complexity of a service it can only be performed safely and/or effectively by or under the supervision of skilled nursing or rehab staff. 

NOTE:  The patient’s diagnosis or prognosis should not be the sole factor in deciding that a service is not skilled.  If the focus of care delivery is for maintenance, the documentation must demonstrate that the skills of the therapist are required. A service that is ordinarily considered non-skilled may, because of special medical complications, become skilled. The medical condition of the patient must be described and documented to support the goals for the patient and the need for skilled nursing services.

Additionally, there are three documentation focus areas for which skilled nursing and rehabilitation should concentrate on in order to support the requirements. § Management and Evaluation of a Patient Care Plan discusses how the development, management and evaluation of a patient care plan, based on the physician’s orders, support the skilled needs. The record should clearly establish that skilled services were provided and outline the potential for serious complications without skilled management. 

PDPM Focus Area 1: Documentation to Support Diagnosis Coding

Per § Documentation to Support Skilled Care Determinations states that there must be sufficient documentation to enable a reviewer to determine whether 1) skilled involvement is required for the services to be furnished safely and effectively, and 2) the services are reasonable and necessary for the treatment of the patient’s illness.  It is important to remember that at some point if the goals set for the patient is no longer reasonable, then the care needs to be reassessed to see if the provision of skilled services is still required. The documentation serves as the means by which a provider would be able to establish if the skilled care is needed. Taken as a whole, the documentation in the patient’s medical record needs to demonstrate the degree to which the patient is accomplishing the goals as outlined. In this way, the documentation serves to demonstrate why a skilled service is needed.

PDPM Focus Area 2: Observation and Assessment

The second focus area is found in § Observation and Assessment of the Patient’s Condition. Observation and assessment are skilled services that should be documented when there is likelihood of a change in a patient’s condition that requires skilled nursing or rehab personnel to identify and evaluate the patient’s need for possible modification of treatment or initiation of additional medical procedures, until the patient’s condition is essentially stabilized.

PDPM Focus Are 3: Teaching and Training Activities

The third focus in § Teaching and Training Activities should be initiated at the beginning of the stay, not waiting until the discharge. Those activities that require the teaching and training of skilled nursing and/or rehabilitation to teach a patient how to manage their treatment regimen, or perform safely for functional activities, support skilled services. The teaching should relate to the diagnosis and plan of care.

Under PDPM, both nursing and therapy documentation must continue to support the requirements outlined in Chapter 8 of the MBPM.  The documentation should support the skilled need for the patient characteristics that are being reimbursed. We will be waiting to see how CMS follows through on this since they have stated that the choice to perform an IPA is optional.

If you have questions about whether your documentation supports these requirements, LW Consulting, Inc. can provide guidance and training.


If you have questions about whether your documentation supports these requirements, LW Consulting, Inc. can provide guidance and training.

Contact Us