CMS issued their updated their guidance to Medicare Administrator Contractors (MACs) on November 15, 2019 regarding Medical Review Instructions related to Skilled Nursing Facilities in Publication 100-08 Medicare Program Integrity, Transmittal 924. The effective date of these updates is October 1, 2019 and the implementation date is December 17, 2019. Below is the guidance to Medicare Contractors.

Contractors shall:

  • Determine the appropriateness of SNF PPS payments based upon the patient’s condition and the application of the CMS prescribed case-mix model and payment classification system.
  • Base their medical review decisions on documentation provided to support the coding and medical necessity of services recorded on the Minimum Data Set (MDS) for the claim period billed.
  • Focus on the unique, individualized needs, characteristics and goals of each patient, in conjunction with our payment policies, to determine the appropriateness of the case-mix classifier billed.
  • Contractors reviewing demand bills shall– (i) review the medical record to determine that both technical and clinical criteria are met; and (ii) if so, and some or all services provided were reasonable and necessary, use the MDS QC System Software (as necessary) to determine the appropriate case-mix classifier.
  • Assess HIPPS codes to ensure accuracy of each HIPPS Code.
  • Note that the Interim Payment Assessment (IPA) is an optional assessment that providers may complete to report a change in the patient’s classification. If an IPA has been completed, contractors shall examine the medical documentation as described in this chapter.
  • Review for reasonable and necessary determination, determine whether the services indicated on the MDS were rendered and were reasonable and necessary for the beneficiary’s condition as reflected by medical record documentation.
  • If the reviewer determines that none of the services provided were reasonable and necessary or that none of the services billed were supported by the medical record as having been provided, deny the claim in full.
    • Note that the previously mentioned policy that allows the 5-day assessment to trigger a presumption of coverage applies only when the SNF admission directly follows discharge from a prior qualifying hospital stay.
  • Note that the billed case-mix classifier is supported by the associated provider documentation-considering all available information in determining coverage.
  • Determine the continued need for, and receipt of, a skilled level of care based on the beneficiary’s clinical status and skilled care needs for the dates of service under review for days after the assessment reference date of the 5-day assessment.
  • Pay claims according to the case-mix classifier value calculated using the MDS QC tool, regardless of whether it is higher or lower than the case mix classifier billed by the provider.
  • Verify that the case-mix classifier submitted on the claim matches the case-mix classifier on the MDS imported from the national repository into the MDS QC tool, and:
    • If the facility case-mix classifier obtained through the MDS QC tool matches the case-mix classifier submitted on the claim, pay the claim as billed for all covered days associated with that MDS, even if the level of therapy changed during the payment period.
    • If the facility case-mix classifier obtained through the MDS QC tool does not match the case-mix classifier submitted on the claim, pay the claim at the appropriate level based on the case mix classifier level on the MDS submitted to the repository for all covered days associated with that MDS, even if the services provided changed during the payment period.
  • If some skilled services were appropriate while others were not reasonable and necessary or were not supported by the medical record as having been provided as billed, and the reviewer determines (based on data entered from the medical record into the MDS QC System Software) that:
    • The discrepancies are such that they do not result in a change in the case mix classification level as calculated by the MDS QC tool, during the relevant assessment period for the timeframe being billed, accept the claim as billed for all covered days associated with that MDS, even if the level of skilled care changed during the payment period.
    • There is another case-mix classifier for which the beneficiary qualifies, pay the claim according to the correct case-mix classifier calculated using the MDS QC System Software for all covered days associated with that MDS and recoup any overpayments as necessary.
  • Deny the claim from the date on which the beneficiary no longer meets level of care criteria if the reviewer determines that the beneficiary falls to a non-skilled level of care at some point during the period under review.
    • Note: A partial denial is defined as either the disallowance of specific days within the stay or reclassification into a lower case mix classifier.
  • Make partial denials based on classification into a new case-mix classification code or a full denial because the level of care requirement was not met are considered reasonable and necessary denials and are subject to appeal rights.
    • Note: It is important to recognize the possibility that the necessity of some services could be questioned and yet not impact the case-mix classification. The case-mix classification may not change because there are many clinical conditions and treatment regimens that qualify the beneficiary for the case-mix classifier to which he or she was assigned.

Gina Tomcsik
Director of Compliance and Regulatory Strategy