The role of the long-term care (LTC) billing professional will change regarding the billing of Medicare residents. With PDPM, Medicare will undergo a shift away from the current fee-for-service payment structure, in which providers are paid based on therapy minutes and by the volume of services provided, and toward a structure that holds providers responsible for patient outcomes and costs. This move to value-based care is intended to move Medicare towards improving the patient quality and satisfaction resulting in better outcomes of the LTC population and reducing the per-capita cost of health care in the long-term care setting.

Changes to Billing Under PDPM
The changes to the billing basically come down to doing away with the 66 RUG-IV classifications and moving to the new expanded HIPPS Code which will define the billing during the Medicare stay. The reliance on therapy for reimbursement is going away, therapy minutes are no longer the prime determinant of payment and actually decline over the course of the stay. Therapy must still be delivered as needed and under PDPM and group therapy can only be 25% of the total therapy delivered. Additionally, there will be reviews by Medicare and audits for big drops in therapy delivered during the course of the stay vs. what was provided under RUG-IV.

The HIPPS code is the formula for payment in PDPM and is made up of five components unlike the two for RUG-IV. The components are PT, OT, SLP, Nursing and Non-therapy ancillaries. These are Case-mix adjusted components for PT, OT, and NTA there is a variable per-diem payment.

PDPM changes the importance of coding the ICD-10 for the resident because this is the basis for reimbursement unlike under RUG-IV where the RUG’s Grouper and therapy minutes drove reimbursement. The correct coding becomes super important moving into PDPM to get the correct reimbursement for your Medicare residents.

The MDS has only the 5-day and discharge assessment, so the 5-day assessment takes on more importance since it could be the only one that is required for reimbursement so it needs to be coded accurately to receive proper payment. There is an IPA Interim Payment Assessment option to identify a change in condition that leads to a PDPM level change so a constant review of the resident’s condition is imperative. Doing an IPA based on a change in the resident’s status would affect the resident’s payment classification, so this is something that needs constant attention from your nursing department.

What Overall Will Change?
The payment calculation as discussed above makes for a more complex calculation, but the role of the LTC billing professionals will not change much. There will be less Case-mix changes during the month with really only one assessment driving the rate. The HIPPS code matrix has many more possibilities (more than 28k) as long as your clinical software sends over the correct HIPPS code your billing of the Medicare resident will essentially stay the same. There are a few minor changes with the UB04 and in some ways PDPM will be easier to bill to your intermediary. If the clinical team and the financial team are prepared for the key changes the transition should work smoothly. The final outcome should be better patient care with the change in focus from throwing therapies at the problem to a balanced mix of nursing care and ancillary care and better outcomes for the resident.

Claims for dates of service prior to October 1st must be billed under current Medicare RUG-IV classifications and claims for all dates of service October 1st forward must be billed using the new PDPM methodology. There will be no transitional period where both RUGS-IV and PDPM will be used concurrently. For Medicare residents with a SNF stay stretching from September into October, an Interim Payment Assessment needs to be completed no later than October 7, 2019 to calculate a PDPM HIPPS code for proper billing for the period beginning October 1, 2019. Providers will be using RUGs-IV assessments for billing all dates of service up to September 30th.

Day-to-Day Changes
The LTC billing professional should be part of the your interdisciplinary team and participate in the daily stand-up meeting to note changes in the census and changes in their Medicare residents that they will be billed for. Some of the key items that will potentially cause an IPA to be done include changes in a resident’s diagnosis, infection, and behaviors. These changes can be monitored by your clinical team using the PDPM Toolkit specifically designed by Cantata. The Toolkit includes Change in Condition Weekly Assessment, Dashboard summary items and alerts using eAssignments.

On a weekly basis, the LTC billing professional should consider being part of the Medicare Meetings and part of the utilization review meetings. Monthly they should work with their clinical team to do a proper triple check for accurate PDPM Medicare claims prior to submission.



For more on the PDPM Toolkit offered by Cantata Health, email us at

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