Countdown to the “Patient-Driven Payment Model” (PDPM)

March 5, 2019

Dear Client:

In late July of 2018, CMS released the Final rule for FY 2019 which “replaces the existing case-mix classification methodology, the Resource Utilization Groups, Version IV (RUG-IV) model, with a revised case-mix methodology called the Patient-Driven Payment Model (PDPM) beginning on October 1, 2019.”

The Patient-Driven Payment Model (PDPM) is the proposed new Medicare payment rule for skilled nursing facilities. It is intended to replace the current RUG-IV system with a completely new way of calculating reimbursement. Under PDPM, therapy minutes are removed as the basis for payment in favor of resident classifications and anticipated resource needs during the course of a patient’s stay. PDPM assigns every resident a case-mix classification that drives the daily reimbursement rate for that individual. In moving to PDPM, the goal is to reduce overtreatment and focus instead on the characteristics and condition of the resident.

The move towards PDPM involves significant changes to the MDS form, changes to the MDS schedule, the creation of PDPM grouper software and modifications to current Medicare billing systems.

RHS has been working on implementing these modifications since August 2018. We expect to release our PDPM compliant software for both our CHARTS and VISUAL platforms well in advance of the October 1, 2019 implementation date.

In the interim as we move towards PDPM we encourage our clients to continue their education and increase their understanding of the Patient-Driven Payment Model to allow for a smooth transition on October 1, 2019.

Additional information regarding PDPM is available at the CMS PDPM website

Thank you.

RHS Client Service