The MDS-Reimbursement Nexus

At its core, the MDS is a comprehensive assessment tool used to evaluate the health and functional status of residents in long-term care settings. However, its impact extends far beyond clinical evaluation. MDS data plays a central role in determining reimbursement levels for healthcare facilities, impacting funding from both government programs and insurance providers.

January 1st kicked off a new year; and for skilled nursing facilities and Medicare Advantage beneficiaries, this new year offers big opportunities to get the access to care needed. Powerful changes included in the Medicare Advantage (MA) Contract Year (CY) 2024 Final Rule went into effect on 1/1/2024.

Biggest Changes Beginning 1/1/24

Earlier this year, CMS announced the start of the Skilled Nursing Facility (SNF) 5-Claim Probe and Educate Review program. This is in response to a 15.1% increase in improper payments for 2022 services, as projected by the Comprehensive Error Rate Testing (CERT) program—likely driven by the change in payment model from Resource Utilization Group (RUG) IV to the PDPM (Patient-Driven Payment Model) in October 2019.

As a result, CMS has directed all Medicare Administrative Contractors (MACs) to conduct a pre-payment review of five SNF claims for all providers nationwide, with few exceptions. Unless your SNF is already under medical review or is considered a low-volume provider (fewer than five Part A claims per calendar year), you will be subject to the Targeted Probe and Educate (TPE) program and may have already received notification from your MAC.

To be frank, the implementation of the Minimum Data Set (MDS) 3.0 version 1.18.11 assessment did not go as smoothly as most had hoped. Even the most prepared providers could not have anticipated stumbling through continuous electronic medical record (EMR) glitches, overlapping with twenty-one (21) errors in the MDS RAI Manual version 1.18.11 identified by the Centers for Medicare and Medicaid Services (CMS), and issues submitting MDS assessments into Internet Quality Improvement & Evaluation System (iQIES).

How Did Errors Impact Providers?
EMR errors were not specific to any one vendor, CMS said all EMR vendors experienced problems. To illustrate the magnitude and complexity of errors providers encountered; one-month post-implementation of the MDS 3.0 version 1.18.11, one of the most prominent EMR software’s in the US continues to investigate unresolved errors, releasing a multi-page document detailing the status of resolutions. So, what’s going on? Across multiple software vendors, providers reported significant complications:

The industry is buzzing… after pandemic-related delays, CMS finally released the draft Minimum Data Set (MDS) 3.0 version 1.18.11 for implementation on October 1, 2023, with the final version expected to be published before the new year. It’s been widely regarded as the largest change to the MDS in over a decade. With less than one year to prepare, a slew of changes that impact everything from interdisciplinary communication to assessments, and risk to both Medicare and Medicaid revenue, where should you start?

Let’s look at cause and effect. What are the most significant changes in the MDS 3.0 version 1.18.11 and what impact to skilled nursing facility (SNF) operations should administrators expect?