Role of the Medical Director in PDPM

Written by Symbria Chief Medical Officer Rajeev Kumar, MD, FACP

On October 1, 2019, PDPM (Patient Driven Payment Model) will change how SNFs (Skilled Nursing Facilities) are reimbursed for care provided to Medicare A recipients. The major change from the existing RUG IV (Resource Utilization Group) system is the shift in focus from therapy to patients’ clinical characteristics and services rendered. It is but a natural transition as SNFs’ role has evolved over time, from rehabilitation to subacute care for medically complex patients.


While major changes are needed at SNFs to optimize reimbursement for their services, the first priority should to be streamlining the MDS (Minimum Data Set) reporting which captures patient’s clinical characteristics and services rendered- so that SNFs can receive commensurate reimbursements. MDS assessments will be far more complex- with 161 fields required for PDPM compared to 20 for RUG IV, and there will be a critical need for accuracy in coding patient’s diagnoses. The second priority will be to recognize and prioritize SNFs ability to care for medically complex patients and obtain due credit for the elaborate care rendered to them. 

Adapting to such a radical redesign in payment process is no walk in the park and requires everyone working in SNFs to collaborate to achieve success with PDPM. This includes the Medical Directors and the medical staff of each facility. The following are examples of how Medical Directors and medical staff can help:


1.      Timeliness of visits: Obtaining and authenticating patient information upon admission, including their medical diagnoses, is absolutely a must as this information is needed to be reported on the MDS initial assessment, and on an Interim Payment Assessment (IPA)- if necessary, after an acute change of condition. State regulations vary in requiring practitioner visits and their timing in SNFs, but for accurate reporting of patient characteristics and any changes, patients need to be seen as early as possible upon admission and acute change of condition- perhaps within 24-48 hours whenever possible.


2.      Accuracy of diagnoses:

a.      Hospital assigned diagnoses for new admissions to SNFs may not be relevant nor accurate. For example, a patient may have had a heart attack and received treatment in the hospital, but reporting the code for an acute myocardial infarction is not appropriate in the SNF as the acute episode would have resolved after treatment. Many acute illnesses and infections fall into this category. Blindly carrying forward all hospital diagnoses might raise red flags for audit, especially as SNF reimbursement under PDPM is driven by diagnoses.

b.      The case mix index (CMI) under many categories are greatly influenced by the presence or absence of cognitive deficits, depression, dysphagia and acute neurological deficits. As these are clinical diagnoses, a licensed medical practitioner must diagnose these conditions before they can be reported on MDS.


3.      Pharmacy collaboration:

a.      A robust formulary is invaluable for PDPM success. While pharmacy cost is reimbursed under Non-Therapy Ancillary (NTA) category, Medicare does not distinguish, nor account for, cost differences between branded and generic medications. Patients receiving IVs (intravenous) bring in higher reimbursement, but branded IV medications may cost more than the entire NTA allowance. Enforcing formulary substitutions in a timely manner is essential to realizing cost savings.

b.      Deprescribing needs to be embraced for not just cost containment, but for patient safety. Discontinuing the multitude of nonessential medications that routinely accompany patients from the hospital, is crucial. The reimbursement for such medications is provided for the entire stay as long as they are captured on the MDS initial assessment, making it financially rewarding to stop medications whenever appropriate.

c.      Antibiotic stewardship is equally important for patient safety and cost reduction. Antibiotics as a class are expensive and formulary substitution and timely cessation are imperative.


4.      Therapy collaboration: Now that therapy is not the prime driver of reimbursement in SNFs, it is to be expected that there will be a reduction in therapy minutes provided to most patients. This correction will happen over time, based on individual patient’s unique needs. However, stinting of therapy is an audit risk and potentially a liability risk. If therapy utilization significantly deviates from past patterns or state and national standards as seen on PEPPER (Program for Evaluating Payment Patterns Electronic Report) reports, Medicare and surveyors will look closely at such facilities, and so will malpractice attorneys seeking any resultant adverse outcomes. The medical practitioner needs to be closely involved in the initiation, care planning, and cessation of therapy services to streamline and safeguard their efficiency and integrity.

While PDPM is a welcome change that will allow SNFs to receive reimbursements more accurately reflective of services provided, the increased need for accuracy in documentation, interdisciplinary collaboration, and clinical leadership, are great opportunities for quality medical directors to enhance and showcase their value in the SNF world.


Rajeev Kumar MD CMD FACP

Chief Medical Officer




Tags: PDPM