The Changing Tides of Compliance Under PDPM


Since the CMS Final Rule announcing the Patient-Driven Payment Model (PDPM) was released, there has been much speculation among SNF providers and industry experts about what compliance will look like under the new reimbursement system. Under RUG-IV, compliance primarily depends on one key metric: medical necessity for therapy services. Due to the high percentage of billed days in therapy groups, Medicare program integrity was laser-focused on documentation and billing for therapy services, to ensure that the therapy furnished to the SNF beneficiary was reasonable and necessary.


But PDPM is very different than RUG-IV. PDPM payment is based upon patient characteristics and diagnoses as reported on the Minimum Data Set (MDS), not the amount of therapy delivered. MDS coding determines payment as MDS items drive the calculation of the five case-mix components. For proper reimbursement, MDS coding must be accurate.


At this year’s HCCA annual Compliance Institute, held in Boston in April, at least seven educational sessions addressed compliance under PDPM, with several national industry experts weighing in.  ICD-10 diagnosis coding and MDS item coding accuracy were two compliance risk areas consistently projected as becoming prime targets for “government enforcers.” And at the Quality Reporting Program Provider Training on May 8, 2019, CMS fired an unmistakable warning shot across the bow:

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“Given the more holistic style of care emphasized under PDPM, program integrity and data monitoring efforts will also be more comprehensive and broad. For program integrity, we expect provider risk will be more easily mitigated to the extent that reviews focus on more clearly defined aspects of payment, such as documentation supporting patient diagnoses and assessment coding.”1


Clearly medical necessity reviews under PDPM will concentrate on the provider’s medical record documentation to support MDS coding. But if you think that therapy doesn’t matter anymore, think again. CMS will also monitor therapy service provision under PDPM as compared to RUG-IV, and “significant changes in the amount of therapy provided to SNF patients/residents under PDPM, as compared to RUG – IV, or the manner in which it is delivered, may trigger additional program reviews and potential policy changes.”2


So what is a provider to do? First, beware of PDPM “solutions” that are designed to help you get the highest payment, no matter what. Tools like “diagnosis optimizers” should be used with extreme caution. In the short term, they may help get you get a higher payment rate – but recoupment of overpayments may follow if medical necessity is not supported by medical record documentation. In the worst-case scenario, they could help the government show intent to defraud in a False Claims action, leading to fines and even a Corporate Integrity Agreement.


PDPM Driver Analysis report
PDPM MDS Item Reimbursement Driver Analysis

An effective and compliant PDPM solution ensures you get the highest payment your documentation supports, so you can keep it. PointRight’s actionable analytics insights identify risk areas to form the foundation of a comprehensive, data-driven PDPM compliance program. Resident MDS-level analysis identifies potential issues before the assessment data even creates the Medicare claim, so they can be corrected before you bill. Ongoing insight into PDPM compliance-related outcomes at the facility level highlights compliance risks so they can be addressed in your compliance monitoring and auditing plan.


The transition to PDPM is going to have many unavoidable challenges, but compliance doesn’t need to be one of them! Educate yourself, listen to industry compliance experts, and use your trusted partners to help you successfully navigate these choppy waters.


Janine Savage, RN, RAC-CT, CHC
Vice President, Product Management, PointRight

Janine is Certified in Healthcare Compliance (CHC) and leverages her knowledge of relevant regulations and expertise in compliance processes to assist organizations in promoting organizational integrity through the operation of effective compliance programs.


1 CMS Quality Reporting Program Provider Training; “Patient Driven Payment Model: What is Changing (and What is Not)” slide 65; Centers for Medicare & Medicaid Services, May 8, 2019.
2 CMS Quality Reporting Program Provider Training; “Patient Driven Payment Model: What is Changing (and What is Not)” slide 66; Centers for Medicare & Medicaid Services, May 8, 2019.

About Janine Savage

Vice President, Client Experience Janine Savage, RN, RAC-CT, CHC is Vice President of Client Experience with PointRight. She has over 20 years of experience in LTPAC and health IT and is proficient in the areas of clinical services, quality management, the revenue cycle, clinical informatics, and IT. She has also served as a Clinical, EMR, and Financial Systems Implementation Project Manager and co-authored the “Savage-Gutkind Electronic Medical Record Adoption Model for Long-Term Care,” which has been used as an industry standard and has been cited in multiple white papers, publications, and presentations. Janine has presented extensively on health information technology and EHR implementation in LTPAC at state and national conferences. She is certified in healthcare compliance through the Health Care Compliance Board and in 2013, served as an expert reviewer of a compliance manual for the American Association of Nurse Assessment Coordination (AANAC).