Patient Driven Payment System (PDPM) is scheduled to start October 1st, 2019. This will affect the way skilled nursing facilities (SNFs) are paid under Medicare Part A for services they provide patients undergoing rehabilitation, but will not affect the way physicians (including physiatrists) are reimbursed under Medicare Part B. 

To evaluate how much ICD-10 codes affect SNF reimbursement, Dr. Steve Gnatz, CMO at Integrated Rehab Consultants (IRC), put together the following patient case studies. These compare SNFs classifying patients based on hospital diagnosis codes alone, vs. having an IRC physiatrist evaluate and assign the diagnoses codes. A few things to note: 

• The reimbursement rates shown are daily, based on length of stay, and decline over time based on formulas published by CMS as of 8/15/19. These are subject to change by CMS at any time.

• The rates shown are based on Cook County, Illinois – your rate may be different depending on your location and other factors specified by CMS.

• The following case studies are not real patients, but are based on possible real-life scenarios under PDPM. 

STUDY 1

Mrs. Jones, a 76-year-old female, is admitted to a SNF for short term rehab from the hospital after suffering an exacerbation of COPD complicated by pneumonia. She is generally deconditioned and weak. She has a history of a prior CVA with mild residual right-sided hemiparesis, poor balance and coordination, mild cognitive impairment, word finding difficulty, and mild dysphagia.

 ➤ $497.42 is the PDPM daily rate for Mrs. Jones based on her hospital discharge diagnoses alone.

➤ Her PDPM rate based on the ICD-10 codes provided by her IRC physiatrist added an additional $84.57 per day for a 14-day length of stay.

➤ $84.57 x 14 = $1,183.98 of additional revenue based on IRC diagnoses and evaluation

STUDY 2

Mr. Smith, an 87-year-old male, is admitted to a SNF for short term rehab from the hospital after suffering a hip fracture due to a fall at home and a subsequent ORIF. He is generally deconditioned and weak. He has a history of diabetes with neuropathy, poor balance and coordination, mild dementia, and urinary retention due to BPH. He requires intermittent bladder catheterization.

➤ $554.29 is the PDPM daily rate for Mr. Smith based on his hospital discharge diagnoses alone.
➤ His PDPM rate based on the ICD-10 codes provided by his IRC physiatrist added an additional $75.91 per day for a 7-day length of stay.
➤ $75.91 x 7 = $531.37 of additional revenue based on IRC diagnoses and evaluation.

STUDY 3

Mrs. Adams, an 89-year-old female, is admitted to a SNF for short term rehab after a fall at home without any fractures. She is generally deconditioned and weak. She initially makes slow but steady progress toward her goals and is expected to discharge back to her ALF in 20 days. However, two days prior to her anticipated discharge, Mrs. Adams suffers a set back due to a severe UTI with metabolic encephalopathy. She requires IV fluids and IV antibiotics. She is depressed with a PHQ-9 score over 10. It is anticipated that she will require an additional 10 days stay to return to her prior level of function.


➤ $513.27 is the PDPM daily rate for Mrs. Adams based on ICD-10 codes provided by her IRC physiatrist initial diagnosis. If her codes remained the same, her rate after day 20 for the additional 10 days would go down to $503.56 per day. 

➤ However, her IRC physiatrist re-evaluated her and provided updated ICD-10 codes that were used to request an interim payment adjustment (IPA). This added an additional $94.36 per day for an additional 10 day length of stay. 

➤ ($513.27 x 20 = $10,255.4) + (503.56 x 10 = $5,035.6) = $15,291 total for her stay based on initial diagnoses

$94.36 x 10 = $943.60 additional revenue added from IPA

$15,291 + $943.60 = $16,234.60 total for her stay based on initial diagnoses and IPA adjustmentS

These case studies demonstrate the necessity of capturing and correctly assigning ICD-10 codes to maximize SNF reimbursements under PDPM.

Facilities who partner with an IRC physiatrist will benefit from their ability to enhance the breadth and depth of ICD-10 coding, supplementing what the hospital discharge and admitting primary doctors provide, while also ensuring accurate diagnosis codes are used.

Ultimately, this will take some of the pressure off the PDPM/ICD-10 coding team and lead to increased reimbursements to SNFs.

To learn more about partnering with an IRC physiatrist, please go to www.irehabconsultants.com or email info@irehabconsultants.com