PDPM Article 4: It’s Time to Audit Your Coding Practices

November 10, 2020

The Centers for Medicare & Medicaid Services’ (CMS) new Patient Driven Payment Model (PDPM) signals a total change in the payment process for Skilled Nursing Facilities (SNFs). While it uses the same regulations and MDS 3.0 database that you’re familiar with as its foundation, PDPM involves a more complex calculation and coding is key. If you don’t have a PDPM implementation strategy in place, your reimbursement is at risk.

With PDPM’s October 1 go-live date right around the corner, now’s the time to make sure your coding practices are ready for optimal reimbursement. As you review your current processes, consider these five steps to leverage opportunities for improvement.

1. CREATE AN ADMISSION CHECKLIST. The new model includes a new focus on admission diagnosis and an increase in current and new MDS items to qualify for payment. These additions, combined with the required accuracy of the five-day assessment, highlight the importance of completeness. Since all staff who handle admission issues and processes have an impact on the database content that produces the qualifying payment levels, it is essential that all staff:

  • Understand the coverage definitions and requirements so the database is correct at the beginning of the stay,
  • Have a checklist for data collection and assessment formulation to reference.

2. REFER TO THE MANUAL. Since all data formulation into the MDS database begins with proficiency in the October 2018 RAI Manual updates, it’s critical that the MDS Manager adapts or changes the facility’s MDS policy and procedure document to reflect these updates. It’s also important to make sure those completing the assessment have the requisite knowledge and instructions, and have the current manual in the building to reference. Be sure the updated Medicare Benefit Policy Manual is also being used.

3. MAKE A CHEAT SHEET OF COMMON CODES. ICD-10-CM codes aren’t used under the current RUG IV system as a direct impact on reimbursement, but there will be a direct relationship under the PDPM. To optimize payment, facilities should have a policy covering diagnostic code assignment. Then research diagnoses you’re currently capturing (since the October 2018 I10020) and maintain a list of the most frequently used codes, keeping in mind the need to code to the highest level of specificity. This step is especially crucial with the NTA component since ICD-10-CM diagnoses impact comorbidities for points. It’s also important to note that if the claim has incomplete, incorrect or missing information, it will be sent to your Return to Provider (RTP) file for you to correct.

4. ESTABLISH PROPER DOCUMENTATION PROCEDURES. Once PDPM is implemented, if your MDS 3.0 data is wrong, illogical or incomplete, the potential for payment loss is very high. Coding must be done carefully and capturing complete information at the time of admission is essential. The importance of diagnostic documentation cannot be stressed enough. All data on the MDS 3.0 must be reproducible by the medical record. Be sure you have effective data collection tools or an electronic process to support all coding; plus have policy and procedure documents in place to back it up.

5. BUILD COMPETENCY. Manage the conversion to PDPM by focusing on training. Educate staff so they are competent with the new definitions and data formulation for each section or item on the MDS 3.0. For ease of discussion, use the color-coded MDS documents. Keep records of orientation, training and competency evaluations in each employee’s file.

If you only take away one key message from this article, it should be this:
Proper coding and data capture at time of admission is mission-critical to ensure you are reimbursed properly for the high-quality care you deliver.


Leah Klusch

Leah Klusch, RN, BSN, FACHCA,
founder and director of The
Alliance Training Center