The MDS: are you leaving money on the table? Providers can lose thousands unwittingly, when simply following a few simple rules would prevent this.

As providers are discovering every day, the Minimum Data Set (MDS) is a valuable financial reimbursement tool. But, like anything that's valuable but complicated, it can also be a curse to those who are unfamiliar with its residual effects and yet are responsible for its timely completion. If your nursing staff is not accurately recording each resident's condition, treatments provided, and staff time devoted to care when completing the MDS, you may be leaving large amounts of money on the table.

The federal government's recently concluded Data Assessment and Verification (DAVE) project, which focused on this question, found areas (specifically ADLs) that are typically undercoded, with a potential loss of reimbursement of up to $30 per patient day for Medicare and $1 per patient day for Medicaid. In one case, a facility was able to increase its Medicaid payment by $0.76 per patient day, for a revenue increment of $1,500 the first quarter. In another facility, using the appropriate Assessment Reference Date (ARD) increased Medicare payment by $50 per patient day, for an added $200,000 that year.

Traps and Pitfalls

Many nursing professionals have not been trained in financial matters and regulations related to healthcare; their education and training have focused on patient care. As a result, common oversights and errors when completing the MDS include:

* not using grace days for fear of an impending audit

* not being flexible in setting the ARD

* lack of a management process for accurate MDS completion

* lack of understanding by staff of the MDS and its definitions

* not considering the "presumption of coverage" rule

Flexing the ARD is one method of enhancing revenue for care provided. The ARD sets the time period for collecting and reporting information about a resident's status. Although specific time frames must be followed for Medicare, grace days can be used if use of these days accurately reflects the services provided. (MDS assessments completed for Medicaid residents also have a schedule to adhere to.) Setting the ARD to capture actual services provided during the assessment period is the best way to get the most appropriate payment.

For example, in one facility, the MDS coordinator always used day five as the ARD for Medicare residents. For one particular patient, the MDS was coded for therapy minutes provided, which was only four days. However, therapy was actually estimated to be provided for nine days and 340 minutes during the first 15 days of the Medicare stay. This classified the resident into a RMB RUG category. The medical record showed that the patient had been extremely ill and had received IV medications, oxygen, and respiratory treatments in the hospital. With these items coded, the patient would have qualified in an SE3 category (extensive services) if another ARD had been chosen. Because of this, the daily payment was $351 versus $294, a difference of $798 for the first 14 days. Had the nurse evaluated all of the patient's services and treatments, a different ARD could have been used, which would have resulted in a higher payment for the facility. Unfortunately this is not an uncommon scenario, meaning that many facilities could be losing thousands of dollars by not being flexible in setting the ARD.

[ILLUSTRATION OMITTED]

Many nurses and therapists fear using grace days because "a facility that uses grace days routinely may be subject to audit" (Medicare Program Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities--Update, Final Rule and Notice. Federal Register; July 30, 1999, volume 64, number 146.). In many cases, however, use of grace days is appropriate, since the resident may not be able to participate in therapy immediately after a transfer to a nursing home. Since most residents do not arrive at the nursing facility until after 3 p.m., an immediate therapy evaluation and treatment session may not be in the best interest of quality care. It would be better to wait until the following day to complete the evaluation and initiate therapy. In those cases, the MDS coordinator may elect to set the ARD at day six, seven, or eight to capture actual services provided and obtain appropriate payment for them.

Routine use of grace days could be problematic. In some cases, for example, grace days may not be needed to place a resident into the appropriate RUG category. The therapist's evaluation and estimate of treatment to be provided during the first 15 days also can assist in placing the resident into the appropriate RUG category without the use of grace days. Use of grace days may be appropriate if the resident is expected to receive more than 500 minutes of therapy during the first week at the nursing home. For the patient to be classified in the Ultra High or Very High categories, more than 500 minutes of therapy time must be coded on the MDS, and often grace days must--and can--be used to meet this criterion.

Another example of the importance of flexibility was a resident covered by Medicaid with an MDS due on January 16. Nursing notes documented that on December 7 the resident saw his dentist, and on December 14 he had an appointment with a cardiologist. There were also two physician order changes during that period. Additionally, the resident received restorative nursing care for three weeks, beginning at the end of November. By waiting until January 16 to complete the MDS, an MDS coordinator could well have missed all these services. Setting the ARD to cover the actual time period during which services are delivered will increase patient case mix appropriately. This can increase the daily payment rate by as much a $1 per day per resident and achieve a significant Medicaid reimbursement increase over an entire quarter.

Use of the "presumption of coverage" is yet another way to enhance reimbursement. CMS indicates that if a patient correctly scores into one of the upper 26 RUG categories (35 categories as of January 1, 2006), the care provided to that patient is assumed to meet the skilled level of care definition from the date of admission until the five-day ARD. Therefore, for some services provided in the hospital setting, a resident can be classified into a clinical RUG category, and the facility is paid for a skilled stay through the ARD. This does not provide automatic coverage for a set number of days for every resident, but it does allow for nursing staff to monitor a subacute condition for the several days that Medicare covers.

Strategies for an Effective MDS Process

Being flexible in setting the ARD takes a thorough understanding of the MDS and the impact of MDS payment levels under Medicare and Medicaid, excellent communication and assessment skills, and good time-management practices.

While managing the MDS is a crucial component of the MDS coordinator's job, without an effective time-management system, the nurse can easily get overwhelmed, become late in completing or submitting assessments, or miss opportunities to improve the facility's reimbursement.

Training staff on key components of the MDS is an effective strategy. All staff should understand the MDS process, why the assessment is completed, the financial impact of clinical activities and their documentation, and how to complete their contribution to the MDS accurately. This training may need to be repeated periodically because of staff turnover, changes made to the MDS, and the sheer complexity of the endeavor. However, general awareness of these issues and of strategies for successful documentation can pay off with higher reimbursement and much less money left on the table.

Cindy MacQuarrie is a member of BKD Health Care Group, a division of BKD, LLP, Kansas City, Missouri. She has an extensive background in nursing and nursing education, as well as service planning and development for healthcare organizations. For further information, phone [phone].BKD, LLP (www.bkd.com) is one of the ten largest CPA and advisory firms in the country, serving diverse clients, including integrated healthcare delivery systems, a wide range of hospitals, long-term care and skilled nursing facilities, rural health clinics, and physicians and medical groups. To send your comments to the author and editors, please e-mail [e-mail].