How You Can Benefit from the New Payment System for Skilled Nursing Care

The Federal Government’s proposed rules for the new Skilled Nursing “Patient-Based Payment System” are out.

If approved, the new payment system might begin to phase-in as early as 2019.

It’s very much analogous to Medicare Advantage. Facilities will be paid based on disease burden and functional deficits rather than the amount of services provided—and the payment can change on a day-to-day basis.

The upshot is that the new system will financially incentivize the facilities to make their Medicare A admissions look as ill as possible—and those efforts will spill over to their Medicare Advantage patients as well.

That will be a big bonus for Medicare Advantage Organizations (MAOs). The diagnoses submitted by skilled nursing providers will be used in Medicare Advantage capitation adjustments.

In effect, skilled nursing facilities are going to become the full-on data collection partners of MAOs.

The facilities will become very interested in helping your nursing home docs risk code.  That way they can crib additional evidence of disease burden from the clinician’s own documentation—so they can get paid more.

Expect your risk scores to rise accordingly.

The new payment system itself won’t directly affect your skilled nursing spend for your own Medicare Advantage patients. Skilled nursing services for Medicare Advantage patients will still be paid based on contracted rates, not on this new payment system. But those patient’s risk-code intensity will definitely benefit from the halo effect as these facilities pay special attention to recording disease burden.

Though it may take a couple of years to find out, you may discover that this new payment system gooses your risk scores nicely.