Harmony Healthcare Blog

RCS-1 Resident Classification System Version 1 Delayed until October 2019 and Modified to Patient-Driven Payment Model (PDPM)

Posted by Kris Mastrangelo on Tue, May 01, 2018


Edited by Kris Mastrangelo

C.A.R.E.

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


New Instructions Concept on Folder Register in Multicolor Card Index. Closeup View. Selective Focus.The Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) released the SNF Proposed Rule for Fiscal Year 2019.  Within the regulation, multiple items addressed including the: 

  • Medicare Rate (increase of 2.4%),
  • Value Based Purchasing (Hospital Re-Admission Metric with 2% reduction or possible 1% increase), and the
  • Quality Reporting Program (No changes, but extended the number of years from one year to two years to calculate the MSPB and Discharge to Community measures). 

While these are super important aspects of the rule, healthcare providers are eager to hear the status of the Resident Classification System 1 (RCS-1) Federal payment system proposed to replace the current Prospective Payment System RUG-IV 66 (PPS) for Medicare beneficiaries nationally. 

The Top 10 Things you need to know about Patient-Driven Payment Model (PDPM): 

  1. The Resident Classification System 1 (RCS-1) will be delayed until October 1, 2019. 
  1. The Resident Classification System 1 (RCS-1) is modified and called the Patient-Driven Payment Model (PDPM). 
  • The refinement touts the focus on “Patient Characteristics” versus “Caregiver Resources” and therapy minutes are no longer the driving factor for reimbursement. 
  • The minutes will only be counted at discharge. 
  1. The Patient-Driven Payment Model (PDPM) is a Per Diem System, not a bundled system. 
  1. The Patient-Driven Payment Model (PDPM) reimburses less per day after day 20. 
  • The intent is that the reimbursement will exceed the cost during the first 20 days and deceed the cost thereafter with an overarching theme to decrease the length of stay. This might not be a game changer if the provider navigates innovative, cost effective, and innovative modes of therapy. 
  1. The Patient-Driven Payment Model (PDPM) Utilizes 3 Assessments. 
  • 5-Day MDS Assessment
  • Discharge MDS Assessment
  • Interim Payment Assessment (Voluntary Assessment to change Payment) 
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  1. The Patient-Driven Payment Model (PDPM) has 5 Groups and Occupational Therapy and Physical Therapy no longer combined! Good News! 
  • Physical Therapy (PT) Component Per Diem Rate
  • Occupational Therapy (OT) Component Per Diem Rate
  • Speech Pathology (SLP) Component Per Diem Rate
  • Non-Therapy Ancillary (NTA) Component Per Diem Rate
  • Nursing Component Per Diem Rate 
  1. The Patient-Driven Payment Model (PDPM) allows for up to 25% Groups and Concurrent Therapy. 
  • While this seems to be a win, it is not. The calculation is 25% of total time for Groups and Therapy. This parameter continues to negatively impact patient care and the usage of necessary modes for effective service delivery.  More advocacy and education is needed on the social, emotional and physical benefits resulting from patient to patient interactions. 
  • This is also inconsistent with the philosophy to allow the providers latitude, flexibility and control over the service delivery. 
  1. The Patient-Driven Payment Model (PDPM) is Budget Neutral. 
  • This means that the new model will not cost more or less than the current system. 
  1. The Patient-Driven Payment Model (PDPM) will replace Section G with Section GG. 
  • This is good news as it decreases the amount of paperwork for the MDS Coordinators. 
  1. The Patient-Driven Payment Model (PDPM) is designed to “shift care from therapy to other forms of care as other categories are underutilized.” 
  • Quite frankly, the new payment system will not decrease the need for therapy in a SNF setting. We have done this dance before (back in 1998 and 2012) and I close with reminding you of the 1987 OBRA Regulation:

    OBRA ’87 regulations require facilities to provide services to “attain and maintain highest practicable physical, mental and psychosocial well-being” of every resident. The medical regimen must be consistent with the resident's assessment (performed according to the uniform instrument known as the MDS) and Interdisciplinary Care Plan. Any decline in the resident's physical, mental or psychological well-being must be demonstrably unavoidable (483.25).

    In other words, it is not acceptable to arrive at a skilled nursing facility and decline in function 6 months later. 

Thank you for subscribing to this blog. As always, please keep sending comments and requests for topics for future blogs and webinars. The Harmony Healthcare International (HHI) Team thanks you! 

Harmony Healthcare International (HHI) performs monthly compliance audits. If you need help with this area, please 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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Tags: RCS-1, Patient-Driven Payment Model

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