SNFs That Don't Document or Code Accurately Risk Losing Millions In Reimbursements Under The New CMS Patient Driven Payment Model

Beginning October 1, 2019, CMS will use a new case-mix model for Medicare payment, the Patient Driven Payment Model (PDPM), which focuses on the patient’s condition and resulting care needs rather than on the amount of care provided in order to determine Medicare payment.

This is a big deal that will require Skilled Nursing Facilities (SNFs) to reevaluate how they assess patients, how they will need to code, and how their providers will need to document to be properly reimbursed. As CMS shifts Medicare payments from volume to value, the SNFs will also need to ensure that the patients they accept have a medically justified reason for a skilled nursing facility admission.

There is a lot of work to do. Fortunately, himagine solutions is already coding for SNF’s and will share with you our knowledge about coding and proper documentation for optimal reimbursement under PDPM.

Lesson One: Precise, efficient coding is essential.


Outsourcing coding to managed and credentialed coders who are experienced in the new changes is an efficient and effective reimbursement strategy, which removes the burden from nursing staff. In addition, outsourcing guarantees that coding turnaround will meet requirements for reimbursement.

Lesson Two: Documentation is critical.

While coding is very important, it is accurate documentation that is often missing. Under PDPM, diagnosis and procedural coding significantly impact the initial reimbursement rate. Consider these two examples.

Accurate Primary Dx -Example 1
  • Per admit note, patient had unspecified GI bleed & other malaise. Attending suspected bleed was due to hemorrhoids. Unspecified GI bleed, bleeding hemorrhoids and malaise codes are Return to Provider codes under PDPM; RTP codes are not payable and will not map to Clinical Category.
  • Our Solution: The attending’s notes stated low H&H. We suspected anemia might be present. Anemia falls under Medical Management as an acceptable primary dx in PDPM [but it was never mentioned in admit note!]
  • Resolution: Send a query to upstream provider to confirm anemia.
  • A SNF coded R65.10 (SIRS of non-infectious origin) as primary based on the doctor’s statement “SIRS secondary to PNA.” However, R65.10 is a RTP code, & coding rules dictate in this case you would code only the PNA.
  • Resolution: We coded pneumonia as the primary diagnosis based on coding guidelines and the CMS 7 day look back rule.
NTA Codes that increase weight and reimbursement added - Example 2
  • Patient admitted to SNF for rehab s/p Total Hip Replacement. SNF did not code that patient was also morbidly obese (E66.01) with a BMI of 45 (Z68.42).
    NTA weight increase: 1
  • Patient admitted for continued IV treatment for lower left leg cellulitis. Patient also had separate diabetic foot ulcer on left heel (E11.621, L97.421) that was being treated.
    NTA weight increase: 3; DM = 2 points; Diabetic foot ulcer = 1 point
  • Patient admitted s/p CABG. Documentation stated patient also had “poorly controlled” epilepsy. This was coded as unspecified epilepsy; a more specific code G40.919 (intractable epilepsy) was added.
    NTA weight increase: 1

Under the new PDPM, Medicare will want to know if the care the patient received at your facility was medically necessary. Documentation is key to reimbursement here. The doctor might say, "Here are the twenty things wrong with this patient." When you have a professional coder, who can interpret that documentation and put in the correct codes, you can expect appropriate Medicare reimbursement. This may only be achieved with comprehensive documentation and skilled coding.

Important Takeaways

From our work in this space, we share the success factors we have identified:
✓ Timeliness of documentation received from upstream partner and admitting SNF MD
✓ Accuracy of admitting MD SNF/Provider documentation
✓ Admission Only coding more effcient; not many Dx changes during stay
✓ Coding to be completed within in 24 hours of appropriate documentation received.

What Now?

Ask yourself, “Do the people coding for me now know the difference between a traumatic fracture and an osteoporotic fracture? Do they know the difference between an aftercare code and a subsequent care code? Do they know when you may assume a causal relationship between hypertension, diabetes and other co-morbid conditions?” Answering no to just one of these can cost you money.

If your employees who are coding for you now choose the incorrect codes, there is no doubt that this will add to a decrease in revenue. For each denial you receive from the insurance company time will need to be spent finding out why the codes are incorrect and which code(s) are correct.

There’s a lot to know about the new Medicare payment model. The sooner you embrace this change the better. It will be coming in the not-too-distant future for Medicaid patients as well. By planning ahead and understanding the importance of accurate documentation and coding, you will be that much closer to continued success with your eligible reimbursement from CMS.

What questions or insight do you have now? Enter them in the comments section below.

Topics: ICD-10, Coding