Skilled nursing facility (SNF) budgets have been stretched thin for years, with most providers cutting any unnecessary items from their expenses. However, some administrators are still seeing their revenue decreasing.

Many point to the two-year PDPM parity adjustment recalibration, continued effects of COVID-19, and inflation as the cause of decreasing SNF revenue. However, have you considered how managed care receivables, SNF Quality Reporting Program (QRP) outcomes, and ranking in the SNF Value Based Purchasing (VBP) program may be impacting your bottom line? These often-overlooked factors may reveal opportunities to increase income.

The industry is buzzing… after pandemic-related delays, CMS finally released the draft Minimum Data Set (MDS) 3.0 version 1.18.11 for implementation on October 1, 2023, with the final version expected to be published before the new year. It’s been widely regarded as the largest change to the MDS in over a decade. With less than one year to prepare, a slew of changes that impact everything from interdisciplinary communication to assessments, and risk to both Medicare and Medicaid revenue, where should you start?

Let’s look at cause and effect. What are the most significant changes in the MDS 3.0 version 1.18.11 and what impact to skilled nursing facility (SNF) operations should administrators expect?

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Case Mix reimbursement operates on a weighted scale, the more resources needed to provide resident care, results in a higher CMI score and a higher reimbursement level. The Minimum Data Set (MDS) Assessment is used by states to collect objective data regarding a resident within specific timeframes, across multiple disciplines. When an MDS assessment is completed, a clinical score that reflects resident acuity is assigned. This clinical score, known as a Resource Utilization Group (RUG) level, correlates with direct care costs in a Case Mix reimbursement system.

Implementing systems that strengthen documentation of care provided and data capture in the MDS assessment, can have a significant impact on a provider’s Medicaid revenue.

Nurse staffing shortages have escalated nationwide to such an extreme level they are now labeled a staffing crisis. Skilled nursing facilities have implemented wait lists, declined new admissions, and even closed units as a result of the staffing crisis.

While the nation is currently gripped by the pandemic, long-term care providers will absorb the ripple effects of the staffing crisis for years to come. Industry experts anticipate providers will see declined reimbursement, as well as increased federal auditing due to use of PHE waivers. In addition, providers should expect to see Five Star rating reductions for survey non-compliance related to infection control surveys, with zero tolerance resulting in immediate jeopardy tags. Five Star ratings for staffing may see effects from burnout, vaccine mandates and other constraints placed on healthcare workers.

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COVID-19 Vaccination Federal Mandate for Staff

COVID-19 has certainly taken taking its toll on the nursing home industry where staffing was a challenge even prior to the COVID-19 pandemic. The recent directive by the federal government that is mandating that all employees of skilled nursing facilities to be COVID-19 vaccinated on or about October 18th, 2021, (the estimated last day for final COVID-19 Vaccine shot on October 4, 2021) further compounds the staffing crisis and could result in significant negative ramifications to the clinical, financial, and operational performance of nursing facilities.

This new federal mandate comes shortly after the May 11th, 2021 regulation requiring nursing homes to report weekly the status of completed COVID-19 vaccinations for both residents and staff to Centers for Disease Control and Prevention’s (CDC) National Healthcare Safety Network (NHSN).

HHI is fielding many questions regarding the calculations for Length of Stay (LOS). Skilled nursing facilities across the country track the Clinically Anticipated Stay (CAS), otherwise known as Length of Stay (LOS), to determine the amount of days a patient resides in the nursing home. Data collection is the foundation for monitoring progress, but, in itself is a daunting task. CMS uses LOS in the SNF QRP program, for patients discharged to the hospital and for patients who return to the Emergency Room or hospital within 30 days of discharge from the SNF. The accuracy and consistency of these figures is critical for care, operations, outcomes and analysis.

What calculations are being used?

In early December, Centers for Medicare & Medicaid Services (CMS) finalized the Medicare Physician Fee Schedule for 2021, reflecting significant cuts to a variety of providers. Physical therapy (PT), occupational therapy (OT), and speech-language pathology (SLP) were initially going to be impacted by a reimbursement reduction of approximately 9%. In late December, in response to intense advocacy by organizations representing the 37 professions affected by the cuts, Congress approved a new omnibus and COVID-19 relief package that reduced the planned cuts to approximately 3% and put the 2% sequestration reduction on hold. The omnibus bill sets the payment rate for CY2021, but the sequestration hold expires on March 31, 2021. At that point, the 2% sequestration reduction will return for all Medicare claims. While this is certainly an improvement over the proposed 9% cut, the new cuts will still prove to be unsustainable for many providers.

So how can you mitigate these reductions in your Part B therapy billings? A key aspect of mitigating these losses is the overall management of your therapy operation. There are some obvious and some not-so-obvious areas where mitigation may be possible. In this article, we will discuss four of them: Multiple Procedure Payment Reduction (MPPR) Policy, the Medicare 8-Minute Rule, Productivity, and Staff Education.

Skilled nursing facilities (SNF) began operating under the Patient-Driven Payment Model (PDPM) on October 1, 2019. Many current SNF employees have only been exposed to the Resource Utilization Group (RUG) model that was retired on September 30, 2019. The RUG model included therapy groups that ultimately trumped almost anything clinical being treated in the SNF. This may have resulted in minimum data set (MDS) assessments under the RUG model that didn’t include all diagnosis, condition, and treatment information simply because it didn’t affect reimbursement.

The MDS assessment was originally created to assist SNFs with developing a comprehensive care plan for residents admitted to a SNF. In the 1990s, the MDS also became a payment tool under the RUG payment model. Consistent focus under the RUG model was on accuracy of therapy days and minutes captured on each MDS assessment. The number of days and minutes of physical and occupational therapy and speech-language pathology services was ultimately the deciding factor regarding RUG group and daily payment amount.

Do you know how your community views you? Beginning in October 2020, certain Quality Reporting Programs (QRP) measures are being publicly reported on Medicare’s Nursing Home Compare site. How do you compare to your competitors in these QRP measures? Continual review, analysis and adjustment of your practices is the key to depicting the stellar services you provide.

Newly publicized QRP measures include:

Important information for Skilled Nursing Facility Admissions, Billers and Finance Departments! New Medicare Part A and Part B Deductibles and Premiums have been released for the 2021 calendar year. Effective January 1, 2021; the following rates will apply:

Skilled nursing facilities (SNF) began operating under the Patient-Driven Payment Model (PDPM) on October 1, 2019. Many current SNF employees have only been exposed to the Resource Utilization Group (RUG) model that was retired on September 30, 2019. The RUG model included therapy groups that ultimately trumped almost anything clinical being treated in the SNF. This may have resulted in minimum data set (MDS) assessments under the RUG model that didn’t include all diagnosis, condition and treatment information simply because it didn’t affect reimbursement.

The MDS assessment was originally created to assist SNFs with developing a comprehensive care plan for residents admitted to a SNF. In the 1990s, the MDS also became a payment tool under the RUG payment model. Consistent focus under the RUG model was on accuracy of therapy days and minutes captured on each MDS assessment. The number of days and minutes of physical and occupational therapy and speech-language pathology (SLP) services was ultimately the deciding factor regarding RUG and daily payment amount.

PDPM Isolation, Quarantine, Skilling, COVID-19, and ICD-10
Top 6 Things to Know

HHI is receiving ongoing inquiries on the MDS Coding qualifiers for Isolation and Quarantine. Although it may seem simple, there is a difference between Isolation and Quarantine.

• Isolation is for patients with symptoms and or positive tests.

• Quarantine is for patients exposed but exhibits no symptoms.

According to the CDC, isolation is for people who are ill, while quarantine applies to people who have been in the presence of a disease but have not necessarily become sick themselves. Per the CDC,

It starts at the front door.

Smart choices upon admission will yield the best results. A strong admissions department will weigh various factors upon admitting a resident, working with the clinical team to select a strong primary diagnosis. This requires a comprehensive review of documentation and transfer paperwork provided upon arrival. By recognizing revenue triggers and selecting the best PDPM category composition; projected reimbursement is established at the highest appropriate level.

Confusion, new directives every hour, residents desperate for help, family, and hope. Your clinical awareness is sharp, on high alert, mindful of any shift in condition. Your all-consuming focus is the health of the patients in your care.

In March 2020, this was the scene in the Long-Term Care landscape. In the blink of an eye, staff intent on treating patients during the pandemic lost the time once dedicated to PDPM initiatives. Fast forward to October 2020, Long-Term Care heroes have helped define “essential”. Our SNF saviors have come out the other side, with techniques and processes to endure the COVID-19 pandemic; and ready to set their sights on the PDPM game once again.

Have you ever felt like your life was an eternal boxing match? Every day you wake up, put your gloves on, and head out just to fight another day. I have felt this feeling many times throughout my life, but nothing has compared to this year of uncertainty and change. As I sit at my desk writing this article, the date is October 1st. Exactly one year ago today the company put on its' boxing gloves and went out to face PDPM. Our company spent over a year planning and preparing for that day and just as we were getting our arms around this new payment system, in came Round 2, COVID-19.

We barely had time to sit in our corner and catch our breath before putting the gloves on to go fight again. With this opponent, we did not have much time for preparation. There was a lot of trial and error and learn as you go. All of our teams bravely stepped up to this new opponent, and I was personally able to see the unwavering commitment from all of you. Six months into this pandemic, we are starting to see the light at the end of the tunnel. But just as we have had a moment to sit in our corner and catch our breath, here comes Round 3!

Illinois is the latest battleground state where Stotler Hayes Group (SHG) has brought the fight for post-Medicaid eligibility income deductions for recipients of long-term care Medicaid benefits. In an ideal world, residents would have all of their financial affairs in order prior to being admitted to a skilled nursing facility so that they secure Medicaid benefits as soon as they exhaust their insurance coverage or private resources. Anyone in the long-term care industry knows, however, that many residents are unable to secure the Medicaid start-date that they need, which leaves the resident – and their provider – with unpaid bills for services rendered prior to their Medicaid eligibility.

Medicaid is a cooperative Federal and State program intended to assist needy and indigent individuals with the costs of care. In order to receive federal funding, State plans for Medicaid must comply with Federal requirements. The Centers for Medicare and Medicaid Services (“CMS”) has long interpreted unpaid expenses incurred prior to Medicaid approval as “not covered” under the State plan for Medicaid. As a result, Federal law requires State Medicaid programs to deduct unpaid medical expenses incurred prior to Medicaid eligibility when determining the amount of income that a resident is required to contribute toward the cost of his or her care; this amount is known as a resident’s “Cost Share” or “Patient Pay Liability.” In other words, Federal law provides Medicaid recipients the ability to apply their Cost Share/Patient Pay Liability towards uncovered pre-eligibility medical expenses. States are permitted to impose reasonable restrictions and many states have done so – allowing deductions, for example, only for uncovered medical expenses incurred three months (or, in some states, six months) prior to the month of the Medicaid application. Some states have elected to impose no time restrictions and allow for deductions in Cost Share/Patient Pay Liability for uncovered medical expenses regardless of when the expenses were incurred prior to the month of the Medicaid application.

In response to the COVID-19 pandemic, the governors of Illinois and Michigan have issue Executive Orders prohibiting long-term care providers from involuntarily discharging resident’s for non-payment. Other states, such as New York, are under pressure to pass similar prohibitions.

Pursuant to Illinois Executive Order 2020-35, Section 14, the provisions of the Nursing Home Care Act, 210 ILCS 45/3-401(d), MC/DD Act, 210 ILCS 46/3-401, and ID/DD Community Care Act, 210 ILCS 47/3-401, permitting a long-term care facility to initiate an involuntary transfer or discharge of a resident for late payment or nonpayment, is suspended. Full text available here.

Facilities face supply chain disruptions and staffing shortages

Faced with a global pandemic now affecting everyday life across the country, the U.S. healthcare system is struggling to cope with potential staffing shortages and supply chain disruptions.

“Everybody is stressed,” said Bill McGinley, President and CEO of the American College of Healthcare Administrators, or ACHCA. “Most of the stress is coming from the conflicting information put out by the CDC, CMS and various state agencies. Often it is conflicting and changes from day to day. It is very hard to keep up.”