Harmony Healthcare Blog

Don’t Sweep Bad MDS 3.0 Coding Under the RUGs

Posted by Kris Mastrangelo on Wed, Aug 14, 2013

Edited by Kris Mastrangelo

The urgency for skilled nursing facility (SNF) staff to ensure coding accuracy and scheduling timeliness with the Minimum Data Set, Version 3.0 (MDS 3.0) is greater than ever. With the need to maintain and improve margins, any guidance provided by the Centers for Medicare and Medicaid Services (CMS) needs to be inspected.

SNF leadership should be sure staff is aware of the revisions and subsequent clarifications that CMS has provided which include serious financial repercussions for certain coding errors. Additionally, revisions to the MDS will likely alter discharge planning for at least some facilities. Failure to implement solid practices related to the MDS 3.0 will result in reduced Medicare reimbursement, which, according to MedPAC, comprises 23 percent of SNF revenues. 

Since the inception of the MDS and the subsequent implementation of the SNF Prospective Payment System (PPS), SNFs have been required to pay closer attention to proper coding. CMS oversight of practices related to Medicare Part A is greater than ever. For nursing home operations, procedures and protocols to ensure revenue insulation are critical to the financial viability of the facility.

CMS Approves More Options for Coding Errors.

Providers have long struggled with items that may not be modified on the MDS 3.0 assessment.  At the beginning of 2013, CMS announced when an MDS coding error was made in certain items, including Assessment Reference Date (ARD) or Reason for Assessment (RFA), it could not be corrected and resubmitted. Instead the assessment had to be inactivated and a new assessment with a current ARD had to be completed. Although CMS officials maintained this was not a new policy, previous interpretations of CMS policy related to this were numerous and varied.

The financial implications included potential default payment or provider liability.

Beginning on May 19, 2013, providers now have the option to modify both the ARD and the Reason for Assessment on the MDS.  Providers will be able to modify the assessment to correct an error in the ARD field, provided the assessment “look back” period does not change by altering the ARD.  Providers will be able to modify the assessment to correct an error in the Reason for Assessment field, provided the assessment item set does not change.  The ability to modify the ARD or the Reason for Assessment on an assessment that is otherwise valid eliminates financial penalties that resulted under the previous policy, which required the assessment be inactivated resulting in a late or missed assessment.  Modifying the assessment would enable the facility to appropriately bill the HIPPS code generated for the number of day covered by the assessment type.

The ability to correct an incorrectly coded ARD utilizing the MDS Modification process will not change the current requirements that limit the provider’s ability to move the ARD of an MDS. 

Yet Another MDS 3.0 Coding Update.  In May 2013, Centers for Medicare and Medicaid Services (CMS) released the RAI User’s Manual, updates.  Key changes involve multiple Sections including Section G, Functional Status and Section M Skin Conditions. Awareness of the most recent updates is critical to maintaining accurate reimbursement, in addition to the influence MDS coding has on Quality Measures. Both Sections G and M will can significantly impact Medicare and Medicaid reimbursement as well as the Quality Measures (QMs).  QMs are essential tools used to evaluate how well healthcare services are being delivered.  The MDS team cannot afford to be remiss in staying current with RAI User's Manual coding instruction updates.  Miscoding an MDS can lead to inaccurate representation of the patient's clinical story through the RUG-IV classification.  Erroneous codes transmitted to the database will put the facility at risk for audit, heightened focus by surveyors during regulatory survey in addition to reduced Revenue for services provided.

Make Use of Seven Day Encoding Period.  Solid processes related to the Encoding Period must be developed and consistently implemented. The Encoding Period is the seven days after the completion of the MDS during which the facility staff should ready the assessment for submission. Using this period to conduct audits is critical to ensuring accuracy in each MDS prepared for submission. Unfortunately, many nursing home clinicians are unaware of this period or unaware of its intent.

It’s important for Administrators to ensure audit of all documentation prior to the facility billing. The MDS must be accepted into the Quality Improvement and Evaluation System (QIES) Assessment Submission and Processing System (ASPS) before the facility can bill for the care provided to the patient. Failure to have the MDS completed and submitted can be due to a multitude of reasons ranging from failure to schedule and/or complete it in a timely fashion to a lack of understanding of the reports detailing submission errors by the staff members charged with submitting the records. There also may be a carryover of prior assessment data, the wrong observation periods were used, or the facility was not using the current RAI User’s Manual.

Enhanced accuracy supports the primary intent that the MDS be a tool to improve clinical assessment and supports the credibility of programs – including quality measures and surveys – that rely on MDS. Inaccurate MDS data leads to an inaccurate plan of care. Accurate care plans help residents achieve their goals and reach their highest practicable level of well-being.

Steps SNFs Can Take to Reduce Financial Risk.  SNF leadership should support its staff through Medicare Part A processes to succeed and even thrive in this complex environment.

To secure optimal Medicare A reimbursement, SNF staff should:

  • Understand RUG-IV Qualifiers
  • Revisit Medicare skilled coverage requirements
  • Be sure MDS nurses and other key staffers have been educated on recent MDS 3.0 changes. Check to be sure the MDS aligns with the resident’s chart. This may require additional training
  • Take a close look at how SNF staff is scheduling and completing resident assessments. Interview data will need to show an increase in the resident’s voice. If resident interviews are not possible, conduct staff assessment
  • Be sure skilled nursing documentation reflects the medical complexity of the patient
  • Ensure compliance with coverage requirements through skilled Medicare documentation that reflect the need to receive services as an inpatient at a SNF
  • Secure revenue with skilled therapy documentation that reflects the medical necessity of skilled levels of care provided 

The Medicare reimbursement system is dynamic, complicated and ever-changing. Building a team of competent clinicians enhances the provider’s abilities to solidify MDS accuracy and improve patient care.

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Kris Mastrangelo, OTR, MBA, LNHA, is president and CEO of Harmony Healthcare International, a consultancy that provides onsite auditing of MDS and associated medical records.

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Tags: MDS 3.0, RUGs

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