pdpm calculator

Understanding PDPM & the ABILITY CAREWATCH PDPM Calculator

How is PDPM calculated?


The ABILITY CAREWATCH PDPM calculator uses the payment for each component and is calculated by multiplying the case-mix index (CMI) that corresponds to the patient’s case-mix group (CMG) by the wage adjusted component base payment rate, then by the specific day in the variable per diem adjustment schedule when applicable. The payments for each component are then added together along with the non-case-mix component payment rate to create a patient’s total SNF  Prospective Payment System (PPS) per diem rate under the PDPM.

Find out how ABILITY can help you successfully navigate PDPM. Contact us for a demo.

PDPM Calculator

What is PDPM?

The Patient-Driven Payment Model (PDPM) is the official model as indicated by CMS effective October 1, 2019, for the case-mix classification system for classifying skilled nursing facility (SNF) patients in a Medicare Part A covered stay into payment groups under the SNF Prospective Payment System. PDPM replaced the Prospective Payment System (PPS).

According to CMS, PDPM eliminates the incentive to provide unnecessary or ineffective therapy, and classifies residents into payment groups based on specific, data-driven characteristics while simultaneously reducing administrative burden on SNF providers.


What does PDPM do?

PDPM determines Medicare payments based on a resident’s conditions and care needs, as opposed to the previous Resource Utilization Group (RUG-IV) system that primarily focused on the therapy minutes provided.


What determines payment?

There are six clinical components that determine payment

Five are case-mix adjusted components:

  1. Physical therapy (PT)
  2. Occupational therapy (OT)
  3. Speech-language pathology (SLP)
  4. Non-therapy ancillary (NTA)
  5. Nursing

The final component is not case-mix-adjusted and covers SNF resources that do not vary according to patient characteristics. Patient characteristics are used to determine classification into a case-mix group (CMG), and these CMGs drive payment.


How to use PDPM?

The new PDPM system tapers rates for PT and OT over time. To succeed under PDPM, providers need to identify new opportunities for reimbursement. The new reimbursement structure incentivizes caring for medically-complex patients requiring nursing and non-therapy ancillary services. But to be successful in taking on more complex cases, it’s imperative to ensure staff is trained for the challenge.


Tips for Navigating PDPM

  • Assess the information you’re getting from the discharging hospital today and determine if you’re currently getting the appropriate diagnosis codes and surgical procedure history to support the coding of the five-day PPS assessment.
  • The newly created Interim Payment Assessment (IPA) has its own item set. A facility will be able to obtain a projected billing code prior to doing the MDS.

Additional PDPM Resources:



How to optimize your clinical data for SNF surveys and PDPM reimbursement

A lot has happened since last summer when CMS issued guidance for surveys and enhanced enforcement around infection control at skilled nursing facilities. The regulatory agency also authorized states to expand survey activities to include more routine surveys upon entering phase 3 of the nursing home reopening guidance or earlier at state discretion.

With the renewed attention on the issues of quality and oversight, most states have now resumed their standard nursing home inspections alongside focused infection control surveys.

From keeping up with regulatory changes and avoiding deficiencies to managing PDPM and Five-Star Ratings, you have a lot on your plate. Without a doubt, survey preparedness and accurate quality data are paramount to compliance and proper reimbursement.

Fortunately, you don’t have to go it alone – ABILITY is with you every step of the way! We continuously make software improvements to help post-acute facilities better manage quality and keep up with the latest regulations.

We have integrated some exciting new features into ABILITY CAREWATCH that help SNFs optimize their clinical data for surveys and PDPM reimbursement in a post-COVID world. These enhancements include:

  • A built-in PDPM Calculator enables you to ensure proper reimbursement and maximize revenue potential. You can use it to identify the reimbursement and care level of each patient, decide whether to submit an Interim Payment Assessment (IPA), and make strong clinical and financial decisions related to your patient population and potential admissions.
  • The Survey Watch page now uses data sourced from Nursing Home Compare (NHC), giving you the most up-to-date survey data to prepare for surveys. NHC data is updated monthly, whereas the previously used OSCAR data is only updated on a quarterly basis.
  • The CMS SNF Survey Report has a new user interface that offers data export functionality and allows you to expand and collapse details for different types of surveys to facilitate data comparison and analysis.
  • The Focused Survey Report has been updated with the new user interface that features data export functionality. It also allows you to use colored checkmarks to differentiate manual report changes.

With ABILITY CAREWATCH, you always have the right quality management application at the right time!

Discover more about how you can position your facility for PDPM and survey success right here.


ABILITY and design®, ABILITY® and CAREWATCH® are trademarks of ABILITY Network, Inc.


4 Smart Ways to Prepare for PDPM

The Patient-Driven Payment Model (PDPM) that goes into effect on October 1 is the largest financial change the industry has seen in 20 years.

The Centers for Medicare and Medicaid Services (CMS) changed the fee-for-service reimbursement model to a fee-for-performance model, also known as value-based care.

CMS’ objective with PDPM is to remove the financial incentive to provide routine therapy to patients regardless of their unique characteristics, goals or needs. Instead, PDPM classifies patients into payment groups based on specific, data-driven patient characteristics.

When the new structure goes into effect later this year, all skilled nursing facilities will be expected to comply immediately. How you fare during the transition depends on how well you plan ahead. Read on for four smart ways to prepare for PDPM.

  1. Prioritize staff training

The implementation of PDPM will make it more important than ever to complete accurate and detailed Minimum Data Set (MDS) assessments. The initial diagnoses will set the bar for payments going forward and must be supported by clinical documentation each step of the way.

An application like ABILITY CAREWATCH® can help ensure accuracy by catching inconsistencies in your assessments before they are submitted. Providers can also analyze this data to improve care plans and locate reimbursement opportunities that may have been missed.

One such opportunity that PDPM incentivizes is accepting more medically complex patients, since reimbursement will be more closely aligned with their elevated care needs. Your staff must be equipped to deliver that level of care.

Expect that some staff training will be required prior to meeting the updated requirements for both the MDS assessments and the needs of patients requiring enhanced care.

  1. Become or enlist an ICD-10 coding specialist

CMS’ FAQs note that ICD-10 codes will be used in two ways: First, providers will be required to report the patient’s primary diagnosis on the MDS. The diagnosis will be mapped to a clinical category and then further classified into therapy components.

Second, ICD-10 codes will be used to capture additional diagnoses and comorbidities of the patient, which factor into further classifying them into speech-language pathology and non-therapy ancillary components.

Many skilled nursing facilities don’t have certified coders on staff. Coding will be even more demanding under PDPM, and providers have a choice: either train key staff on the new requirements or consult with a certified coder.

  1. Prepare to step down therapy use

One of the largest changes in the shift to PDPM is that reimbursements will no longer pay per therapy minute. Skilled nursing operators might consider renegotiating with their current therapy partners.

The new rules also limit group and concurrent therapies to no more than 25 percent. CMS considers this an important step to help ensure that patients receive the highest level of personalized care.

  1. Don’t forget about your vendors

Skilled nursing facilities rely on many other service providers to run smoothly. Therapy providers, electronic health record vendors and others should be knowledgeable of the upcoming changes that PDPM will bring. Check in and make sure these providers are preparing diligently and sharing their progress and insights along the way.

One of the best ways to succeed under PDPM is to stay informed and prepare, so that when October comes, your facility can hit the ground running.