In recent PDPM blogs we have focused on preparation for the Medicare Part A services as CMS shifts reimbursement drivers from therapy minutes to complex care needs of the residents. Such discussions are appropriate and will continue as October 1, 2019 draws closer and as we all attempt to be as prepared as possible for this big change in reimbursement.

Changing focus a bit for this blog it is important to mention how the PDPM changes in calculating reimbursement will have a trickle down affect for other insurers. Medicare Advantage plans and state Medicaid programs have based their rate calculations on the Medicare system and now for the 25 states that use a case-mix system for Medicaid, the major challenge will be transitioning to a model without Resource Utilization Groups (RUGs) formulae.

Without RUGS-based calculations those states are to begin to use the Optional State Assessment (OSA). It is intended to replace the RUGs-based approach to getting the billing codes to enable appropriate billing for the Medicaid services. The OSA was intended to be a temporary approach to establishing new Medicaid payment models but recently was extended indefinitely by CMS. The challenges for Medicaid parallel the challenges for the PART A PDPM component.

From the Long-Term Care Facility Resident Assessment Instrument 3.0 Users’ Manual V1.17

Pg 2-12 — Optional State Assessment (OSA). This is the set of items that may be required by a State Medicaid agency to calculate the RUG III or RUG IV HIPPS code. This is not a Federally required assessment; rather, it is required at the discretion of the State Agency for payment purposes. This is a standalone assessment.


For more information on this topic consider following this link for an article in Skilled Nursing News by Maggie Flynn, May 22,2019.