Why Swing Bed and Skilled Nursing Facility Success Requires Clear Understanding of New PDPM Methodology

In October 2019, the Centers for Medicare and Medicaid Services rolled out a new methodology for both hospital swing bed and skilled nursing facility providers. The new Patient-Driven Payment Model (PDPM) replaces the Resource Utilization Groups, Version IV model and is expected to improve payment accuracy made under the Skilled Nursing Facility (SNF) Prospective Payment System (PPS)—if providers know how to navigate it.

Whereas providers used to make a simple calculation (based primarily on therapy minutes provided), the new methodology consists of five case-mix adjusted components, all based on data-driven, stakeholder-vetted patient characteristics:

• Physical therapy
• Occupational therapy
• Speech language pathology
• Nursing
• Non-therapy ancillary utilization

The new model also includes a variable per diem adjustment that adjusts the per diem rate over the course of the stay for PT and OT and NTA components. This improves upon the previous constant per diem rates, which CMS says did not accurately track changes in resource utilization throughout the stay and may have allocated too few resources for providers at the beginning of the stay.

If all of this sounds complicated, you’re not alone.

“It’s a 100 percent learning curve from what we used to do,” admits Reta Underwood, RAC-CT, C-NM, QCP, CPC, president and cofounder of long-term care consulting firm CLTC, Inc. “We used to be able to make a very quick predictive calculation of payment based on therapy minutes. Now, under PDPM, every patient is unique. Every patient has certain comorbidities, diagnoses and reasons they were in the hospital. Whereas before you were looking at a service, now you’re having to assess the whole patient and consider what the patient has and needs versus what the provider provided.”

Even the Minimum Data Set (MDS) tool used to make these new calculations was edited and revised to v1.17 at the same time as the PDPM rollout. Among the changes in v1.17 is a streamlined reporting schedule that facilities must follow.

“This is 100 percent a new process for everyone in the PPS swing bed and long-term care world,” she says.

But, Underwood, who routinely consults with rural PPS hospitals with swing bed programs and skilled nursing facilities as they implement or fine-tune their programs, is also quick to point out that although the process may be different, it’s not necessarily harder.

“It’s a bigger algorithm to calculate, but the work itself, in my opinion, is not any more difficult,” she says. “It’s actually a little bit streamlined. CMS took away some things and added in others. It’s a similar workload, just refocused.”

So, what do providers need to do to succeed under the new patient-driven payment model? For starters, they need to implement and/or use their swing bed program.

“Too often I see facilities not utilizing swing beds because of the unknowns,” Underwood says. “But the benefits of a swing bed program far outweigh the challenges of implementing one. Swing beds are a wonderful resource for both the rural hospitals and the communities they serve. Swing beds have been proven to shorten length of stay, cut down on readmissions and provide a new revenue stream for the hospital.”

But don’t just “do it and hope you don’t drown,” she says. Instead, invest the time to learn the ins and outs of swing bed requirements and set your program up for success—right from the start.

To jumpstart your understanding of PDPM, MDS v1.17 and how they work together to generate the most accurate HIPPS code, Underwood is leading a webinar with HealthTechS3 Chief Clinical Officer Carolyn St. Charles on Tuesday, April 14. In the webinar, “The Swing Bed Patient-Driven Payment Model (PDPM) and Understanding the Importance of MDS v1.17,” Underwood will provide an overview of these recent changes and share resources and next steps for furthering your understanding.

Underwood also recommends checking out the Medicare Learning Network’s PDPM Training Presentation, which provides a great overview of the changes and offers easy-to-understand examples of how payment accuracy changes when a holistic view of the patient’s needs is captured.

If you are interested in consulting services designed to help you implement swing bed programs or get up to speed on new requirements, such as PDPM, quickly, please contact Carolyn St.Charles at carolyn.stcharles@healthtechs3.com.

For more information, tune into Underwood’s webinar on Tuesday, April 14 at noon. Reserve your spot today – Click here to register.