Harmony Healthcare Blog

ICYMI: PDPM Basics for MDS Coordinators

Posted by Joyce Sadewicz on Tue, Jul 23, 2019


Edited by Kris Mastrangelo

C.A.R.E.

Compliance • Audits/Analysis • Reimbursement/Regulatory/Rehab • Education/Efficiency


close up of math formulas on a blackboardThere are six components that are involved in calculating the daily payment rate for each patient for the Patient Driven Payment Model.  These include: 

  1. Facility Base Rate which is the Non-Case Mix rate that will continue to be calculated by CMS as it is currently under the RUG-IV system. This base rate will be the same for all Medicare Part A patients and will not change over the course of the patient's stay.
  1. Physical Therapy Component: Calculated by the using the primary diagnosis to determine the diagnostic category and the Function Score to determine the corresponding Case Mix Group and the Case Mix points.  This component decreases reimbursement by 2% every 7 days beginning on day 21 and every 7 days thereafter until the end of the patient's stay. 
  1. Occupational Therapy Component: Calculated by the using the primary diagnosis to determine the diagnostic category and the Function Score to determine the corresponding Case Mix Group and the Case Mix points.  This component decreases reimbursement by 2% every 7 days beginning on day 21 and every 7 days thereafter until the end of the patient's stay. 
  1. Speech Therapy Component: The first step is determining if the patient has a neurological diagnosis/condition, impaired cognition any speech comorbidities.  The patient may have none, any one, any two or all three.  The second step is to determine if the patient has a swallowing disorder as coded in Section K of the MDS and/or if the patient has a mechanically altered diet.  The patient may have neither, either or both.  This rate remains constant for the patient's entire Medicare Part A stay. 
  1. Non-Therapy Ancillary Component: This component is based on the presence of certain comorbidities or the use of extensive services.  There are 50 diagnoses or extensive services that are assigned a point value based on cost and relative value of the service.  The Case Mix points are then based on the total number of weighted points accrued for the patient.  This component is variable with the resulting rate multiplied by 3 for the first 3 days of the patient's stay and by 1 thereafter for the remainder of the stay. 
  1. Nursing Component: The current Nursing RUG categories continue to be used for the PDPM system with some combination of categories based on the Nursing Function Score which resulted in a reduction of categories for 43 to 25.  There are multiple qualifiers for the categories depending on the clinical needs and services rendered to the patient.  For example, the provision of Respiratory Therapy 7 days in the look back period for at least 15 minutes per day would result in the Special Care High category.  This component's rate remains constant for the patient's entire stay.

Each of the components is assigned a Case Mix group with the corresponding Case Mix points.  These Case Mix points are multiplied by each component's base rate and the Variable Per Diem Adjustment (PT, OT and NTA components) and then all components and the corresponding rates are added together to calculate the daily rate.  The patient's daily rate on Medicare Part A day 4 will be different than days 1-3 due to the NTA variable payment adjustment.  The rate will then change again on the patient's Medicare Part A day 21 with a 2% decrease related to the PT and OT components.

PDPM Calculator

Harmony Healthcare International (HHI) is available to assist with any questions or concerns that you may have.  You can contact us by clicking here.  Looking to train your staff?  Join us in person at one of our our upcoming Competency/Certification Courses.  Click here to see the dates and locations. 


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