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Understanding PDPM and the Nursing Component

May 08, 2019
Reimbursement By Kay Hashagen, Senior Consultant

There has been much talk about the upcoming proposed switch to the Patient Driven Payment Model or PDPM for reimbursement of Medicare Part A patient stays in Skilled Nursing Facilities (SNFs). The proposed change is effective on October 1, 2019. The model includes the per diem payment as the sum of five case-mix adjusted clinical components based on the patient characteristics and a non-case-mix adjusted rate for every patient. The case-mix adjusted components include: Physical Therapy (PT), Occupational Therapy (OT), Speech Language Pathology (SLP), Nursing, and Non-Therapy Ancillary ( NTA). Over the past several months, we have discussed PT, OT, SLP and NTA components. In this article, we will discuss the Nursing component.


Of all of the components, Nursing has the least amount of changes from the current RUGs-IV Prospective Payment System (PPS) payment model that is currently in effect and has been utilized for reimbursement in the SNF since 1998. The Nursing component has always included categories that are delineated by patient characteristics. The characteristics are very similar to those that identified nursing RUG categories under RUGs-IV PPS. Some of the categories have been consolidated under PDPM so there are fewer nursing case mix index (CMI) adjusted categories, but the requirements for the categories are pretty much the same. 

The one big difference between RUGs IV PPS and PDPM with regard to calculation of the nursing CMI is the methodology to capture functional performance. Under PPS, the Minimum Data Set (MDS) Section G was used to determine the Activities of Daily Living (ADL) score. Only the four late loss ADL tasks, which included eating, bed mobility, transfers and toilet use, were used to obtain a score that related to an ADL score of A, B, or C. If the patient had additional extensive qualifiers, the scores could include an extender of X or L. Under PDPM, the Section G scoring on the MDS will no longer be used; the Section GG scoring of Functional Abilities will determine functional performance. For the Nursing component, only seven of the functional tasks will be considered in the CMI calculation. Note that several of these tasks are more specific than the general categories included in Section G. When documenting bed mobility in Section GG, the specific components of sit to lying and lying to sitting on the side of the bed need to be documented separately from the scoring of bed mobility. The same is true for the sit to stand task; this cannot be included in the transfer score to demonstrate the requirement of supporting documentation for Section GG. Toilet use included toileting hygiene and toilet transfers under Section G.


Section GG Item
Functional Score Range
Self-care: Eating 0–4
Self-care: Toileting Hygiene 0–4
Mobility: Sit to Lying 0–4
(average of 2 items)
Mobility: Lying to Sitting on Side of Bed 0–4
(average of 2 items)
Mobility: Sit to Stand 0–4
(average of 3 items)
Mobility: Chair/Bed-to-Chair Transfer 0–4
(average of 3 items)
Mobility: Toilet Transfer 0–4
(average of 3 items)

Nurses have always known that they have a requirement to document the need for skilled care that is reasonable and necessary and supports the requirements outlined in the CMS Medicare Benefit Policy Manual (MBPM), Chapter 8, §30. However, under the RUGs-IV PPS reimbursement model, the payment focus was on the therapy minutes and the Section G ADL coding, as these were the payment drivers for any patient with a Rehab RUG. The diagnosis coding and documentation to support the nursing qualifiers became important for those patients who were being covered under a Nursing RUG without therapy involvement. .

However, under PDPM, all the categories, including Nursing, relate to reimbursement based on patient characteristics. This means that nursing documentation must now support the CMS requirements for daily skilled documentation for every patient, every day! In order for a patient to be covered under Medicare Part A, the following requirements are outlined in the MBPM, Chapter 8, §30-Skilled Nursing Facility Level of Care – General.

Care in a SNF is covered if all of the following four factors are met:

  1. The patient requires skilled nursing services or skilled rehabilitation services, i.e., services that must be performed by or under the supervision of professional or technical personnel (see §§30.2 - 30.4); are ordered by a physician and the services are 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. The patient requires these skilled services on a daily basis (see §30.6); and
  3. As a practical matter, considering economy and efficiency, the daily skilled services can be provided only on an inpatient basis in a SNF. (See §30.7.)
  4. The services delivered are reasonable and necessary for the treatment of a patient’s illness or injury, i.e., are consistent with the nature and severity of the individual’s illness or injury, the individual’s particular medical needs, and accepted standards of medical practice. The services must also be reasonable in terms of duration and quantity. If any one of these four factors are not met, a stay in a SNF, even though it might include the delivery of some skilled services, is not covered.

Members of the Interdisciplinary Team (IDT) discuss the reason for the SNF stay at meetings. The primary diagnosis to support the reason for SNF care will be entered into section I0020B on the MDS, along with other pertinent diagnosis codes that support nursing, NTA and SLP comorbidities in section I8000. These codes will be used to support the patient characteristics for all the clinical components to determine the PDPM CMI for reimbursement. If the documentation does not support that these diagnosis codes are still active, those codes should not be recorded. Nursing documentation will be of utmost importance under PDPM because not every patient will be appropriate for therapy. The therapy minutes are no longer the major determination of reimbursement for the patient; the documentation must support the ongoing need for skilled care based on the active patient characteristics. 

The challenge for nurses under PDPM will be to make sure that the daily documentation truly supports the need for skilled care in a SNF, and that the patient characteristics are still documented as active. An example of this is a patient who has a primary diagnosis that supports the Medical Management clinical category. The nurse should be documenting changes in medication and monitoring blood pressure, Diabetes management, symptoms and nursing education to support the primary diagnosis coding on a daily basis. Just documenting that medication was provided, or that the patient is participating in therapy, will not support the requirement for documenting the need for skilled nursing for the patient characteristics.


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