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Ellie Tucker, Attorney, Polsinelli Bragg Hemme, Polsinelli

How Optional is Optional? The Interim Payment Assessment under the Patient Driven Payment Model

By Ellie Tucker
Attorney, Polsinelli
By Bragg Hemme
Attorney, Polsinelli

See all this Month's Articles

Original Publish Date: July 9, 2019

Beginning October 1, 2019, the Centers for Medicare and Medicaid Services (“CMS”) will overhaul Medicare Part A payments to skilled nursing facilities (“SNFs”), moving from a RUG-based methodology to the new Patient Driven Payment Model (“PDPM”).1 SNFs will be paid a per diem rate based on how a resident is classified with respect to five different case mix components: physical therapy (based on the resident’s primary diagnosis and functional status); occupational therapy (based on the resident’s primary diagnosis and functional status); speech language pathology; nursing; and non-therapy ancillary (based on comorbidities or use of extensive services), plus a non-case mix base rate. The per diem rate is variable over time, to account for the presumed decrease in costs and necessary services over time.

An important change with this transition is the reduction in required assessments. Although the assessment tool will be more in depth, providers will generally only be required to perform Prospective Payment System (“PPS”) assessments twice for Medicare purposes: on day 5 and on discharge, thereby eliminating the currently required 14, 30, 60, and 90-day PPS assessments. Other assessment requirements and schedules under the Omnibus Budget Reconciliation Act of 1987 (“OBRA”) or state Medicaid programs, for example, are not affected by Medicare’s transition to PDPM.

In addition to the required PPS day five and discharge assessments, providers may also complete an Interim Payment Assessment (“IPA”) when a resident’s clinical or functional status changes. CMS allows providers the discretion to determine the criteria for when the IPA should be completed.2 This, along with the use of optional or permissive language in related guidance, suggests that providers can decide whether to ever complete the IPA. For example, CMS recently published an updated Resident Assessment Instrument (“RAI”) manual, effective October 1, 2019, incorporating the requirements of PDPM. In the RAI, CMS states that the IPA “may” be completed “in order to report a change in the resident’s PDPM classification.”3 The RAI manual also indicates that “when deemed appropriate by the provider, the IPA may be completed to capture changes in the resident’s status and condition.”4 Similarly, the CMS fact sheet states that “the IPA is optional and will be completed when providers determine that the patient has undergone a clinical change that would require a new PPS assessment.”5

A close reading of the rulemaking and related guidance raises the question of whether the IPA is truly “optional,” particularly when a change in the resident’s status would affect the resident’s payment classification. Rather, it appears that CMS intends the timing of the IPA to be optional, based on the clinical and functional changes of the resident, but should those changes occur, particularly if they would affect the patient’s PDPM classification, and thus, payment, the IPA would be required.

CMS guidance indicates that it expects that providers complete the IPA with a change in patient status. “Facilities will determine when IPAs should be completed, and we expect them to pay special attention to clinical and functional changes….We defer to the judgment of clinicians and expect that the care they are providing is always evaluative in nature, meaning that therapists are continually assessing the needs of the patient and changing interventions as needed throughout the course of the therapy regimen.”6 CMS also indicated in the final rule that “it is necessary for SNFs to continually monitor the clinical status of each and every patient in the facility regularly regardless of payment or assessment requirements…we also believe that providers may be best situated, as in the case of the Significant Change in Status Assessment, to determine when a change has occurred that should be reported through the IPA.”7

Although how CMS may enforce the IPA standards may seem daunting and uncertain, if CMS or other government enforcement agencies believe that SNF’s are using the flexibility surrounding the IPA to game the PDPM, for example, never completing IPA’s even when the patient status changes, or only completing IPA’s when the status change would cause a favorable payment change, enforcement measures could soon follow. Providers should strive to follow the little guidance that exists and work to establish clinical criteria for triggering IPAs in their SNFs. One option may be to modify a SNF’s significant change policy to accommodate IPAs as well. This approach would be easy to implement as it would piggy back off of an already well known policy that staff are familiar implementing. Alternatively, providers could opt to create an entirely new IPA policy with its own triggering criteria. This approach would allow a policy to be crafted to be as specific to CMS guidance as is possible at this juncture and could more easily be revised to accommodate further CMS guidance, if and when it is published.

For more guidance on PDPM, the other requirements it imposes on SNFs, and advice on how to prepare, providers should seek the advice of their legal counsel.

About the Authors:

Bragg Hemme is a health care attorney with Polsinelli who focuses on the regulatory, compliance and operational issues facing health care providers, including long-term care providers, senior housing entities and hospitals. She also counsels clients on health care payer and reimbursement issues. Contact Bragg at or 303.583.8232.

Elizabeth (Ellie) Tucker is a health care attorney with Polsinelli whose practice focuses on senior-housing and long-term care providers, as well as acute and post-acute care providers. Her work includes legal advice for an array of regulatory, operational, and compliance issues facing these providers. Contact Ellie at or 314.622.6661.


1 83 Fed. Reg. 39162 (August 8, 2018).
2 83 Fed. Reg. 39162, 39234 (Aug. 18, 2018).
3 RAI Manual, Oct. 2019, p. GG-39.
4 Id. at p. 2-43.
5 PDPM Fact Sheet: MDS Changes.
6 83 Fed. Reg. 39162, 39234 (Aug. 18, 2018).
7 83 Fed. Reg. at 39233.