The ongoing staffing shortage amid growing economic turbulence and payment pressures means that every nursing home in the country is currently struggling with reimbursement, says Scott Heichel, RN, RAC-MT, RAC-CTA, DNS-CT, IPCO, QCP, ICC, director of reimbursement and education for Pathway Health in Lake Elmo, MN. “With the cost of almost everything going up, many providers are just trying to ensure that they at least break even as they continue to provide appropriate care to residents and pay staff.”
This environment makes it critical for the nurse assessment coordinator (NAC) to lead the interdisciplinary team (IDT) in maximizing every dollar possible for the care provided to residents, advises Heichel, who will present the April 25 session “Section GG: Not for the Faint Hearted” at the April 22 – 25 AAPACN 2025 Conference in Louisville, KY. “I don’t advocate for anyone getting more than they deserve, but I certainly don’t advocate for providers getting less than they deserve. I just want every nursing home to get paid fairly.”
One MDS section that has widespread direct and indirect impacts on reimbursement is section GG (Functional Abilities), says Heichel. “There is a lot of money sitting in this section. Putting aside the potential impact on the care area assessments (CAAs) and care planning, you will not be paid what you should be getting paid if you are undercoding, overcoding, or miscoding—however you want to label it—section GG. Just from a reimbursement standpoint, section GG accuracy should be a top-tier concern.”
Key impacts of section GG include the following:
Medicare Part A payment
Section GG plays a key role in fee-for-service (FFS) Medicare Part A payment, says Heichel. “Under the Patient-Driven Payment Model (PDPM) in the Skilled Nursing Facility Prospective Payment System (SNF PPS), five case-mix adjusted components go into the payment that you will receive after you complete and transmit the PPS MDS for a resident who is at a skilled level of care: physical therapy (PT), occupational therapy (OT), speech-language pathology (SLP), non-therapy ancillaries (NTA), and nursing.”
These payment components determine the PDPM classification codes included in the eventual Health Insurance Prospective Payment System (HIPPS) code, says Heichel. “The HIPPS code represents the full unadjusted per-diem payment that you will receive for that resident.”
Section GG impacts three of the five PDPM payment components, points out Heichel. “PDPM calculates two total function scores for each resident using self-care and mobility items from section GG. One function score helps put the resident into specific case-mix groups that equate to the case-mix indexes (CMI) for the PT and OT components, while the other function score contributes to the CMI for the nursing component.”
Note: Review Step #3 in the PDPM Payment Component: PT section of the PDPM Calculation Worksheet for SNFs in chapter 6 (pages 6-16 – 6-18) of the Long-Term Care Facility Resident Assessment Instrument 3.0 User’s Manual (RAI User’s Manual) to learn which section GG items are included in the PT/OT function score and how to calculate it. The nursing function score calculations are available in Step #1 in the PDPM Payment Component: Nursing section (pages 6-33 – 6-34).
The higher the CMI that a resident brings in for each payment component, the higher the reimbursement that the provider ultimately will receive, explains Heichel. “For example, a 1.45 PT CMI pays a base PT rate of $106.21 to urban facilities in fiscal year (FY) 2025, while a 1.81 PT CMI pays $132.58, according to the FY 2025 SNF PPS final rule (table 5).”
Unlike Medicare Advantage, FFS Part A is a skilled payer that allows the provider to control reimbursement within the regulatory framework that the Centers for Medicare and Medicaid Services (CMS) established, points out Heichel. “More than 50 percent of Medicare beneficiaries are now enrolled in a Medicare Advantage or other managed care plan, according to the most recent CMS data. So, you need to max out those FFS Part A opportunities when they come and get paid fairly for the services that you are providing.”
Quality programs: SNF QRP, SNF VBP, Five-Star
Nursing homes participate in three quality programs developed by CMS: the Skilled Nursing Facility Quality Reporting Program (SNF QRP), the Skilled Nursing Facility Value-Based Purchasing program (SNF VBP), and the Five-Star Quality Rating System that goes hand in hand with the publicly reported Nursing Home Quality Initiative (NHQI) quality measures (QMs), says Heichel. “All three programs have a QM component that looks at resident outcomes. A number of the QMs overlap between programs—ensuring that section GG affects all three programs.”
The following AAPACN chart outlines which QMs incorporate section GG in the three programs:
| NHQI/Five-Star | SNF QRP | SNF VBP |
| MDS-Based – Percent of Residents Whose Need for Help With Activities of Daily Living Has Increased (Long-Stay)* – Percent of Residents Whose Ability to Walk Independently Worsened (Long-Stay)* – Percent of Residents With Pressure Ulcers (Long-Stay)* – Percent of Residents With New or Worsened Bowel or Bladder Incontinence (Long-Stay) – Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury (Short-Stay)*, ** – Discharge Function Score (Short-Stay)* Claims-Based – Number of Hospitalizations per 1,000 Long-Stay Resident Days* – Percent of Short-Stay Residents Who Have Had an Outpatient Emergency Department Visit* – Number of Outpatient Emergency Department Visits per 1,000 Long-Stay Resident Days* – Percent of Short-Stay Residents Who Were Re-hospitalized After a Nursing Home Admission* Note: The risk adjustment models for these claims-based QMs stopped including section G items in July 2024. Section GG items will be implemented in July 2025, when all states are slated to have implemented section GG. * Used in the Five-Star Quality Rating System ** This SNF QRP measure is titled Percentage of SNF Residents With Pressure Ulcers/Pressure Injuries That Are New or Worsened in Five-Star. Sources: the MDS 3.0 Quality Measures User’s Manual (v17.0) and the Nursing Home Compare Claims-Based Quality Measure Technical Specifications (July 2024) | – Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury – Application of IRF Functional Outcome Measure: Discharge Self-Care Score for Medical Rehabilitation Patients – Application of IRF Functional Outcome Measure: Discharge Mobility Score for Medical Rehabilitation Patients – Discharge Function Score Source: the SNF QRP Measure Calculations and Reporting User’s Manual Version 6.0 | – Discharge Function Score – Number of Hospitalizations per 1,000 Long-Stay Resident Days Source: the SNF VBP Measures page |
The SNF QRP is a pay-for-reporting program, says Heichel. “So, section GG completion, not section GG accuracy, affects whether you are able to meet the annual MDS-based reporting threshold to help you avoid a 2 percent payment penalty.”
However, section GG accuracy will play a prominent role in the pay-for-performance SNF VBP because this measure set is in the process of expanding, stresses Heichel. “The SNF VBP incentivizes reimbursement back to your building. Depending on what your resident outcomes look like compared to other providers, extra dollars may be coming your direction. That’s not an opportunity that you can miss out on.”
Five-Star doesn’t directly affect provider reimbursement, notes Heichel. “But, the indirect payment impacts can be tremendous—almost a snowball effect. Although survey outcomes are the biggest contributor to a facility’s overall star rating, staffing and QM star ratings also have the ability to move that overall rating up or down. So, you have an opportunity to show that your overall rating reflects the good outcomes in your building with an accurately coded MDS.”
Bad Five-Star ratings could impact census, says Heichel. “If your resident outcomes are not what other organizations would expect to see from a high-performing nursing home, that may hurt referrals from hospitals. It also could limit partnerships with healthcare associations or hospital organizations.”
Many Medicare Advantage plans and other insurers look at the Five-Star QM ratings, adds Heichel. “These insurers often will only sign contracts with nursing homes that are at a three-star, four-star, or five-star level because they want to match up with providers that have a proven history of outcomes. If you only have one or two stars, that further limits which residents can come into your building.”
Needing strong documentation to support an accurate MDS is not a new concept, says Heichel. “But, it’s important to extrapolate it out and understand how far it can potentially affect you as a provider if you don’t have an accurate section GG that allows you to show your strong resident outcomes.”
Medicaid payment in case-mix states
Section GG also impacts reimbursement for long-term care residents in Medicaid case-mix states, says Heichel. “Medicaid case-mix states are adopting a variety of payment models as they transition away from a RUG-based system. For example, some states have decided to use PDPM’s nursing component to drive payment; others may end up using the PT and OT components; and still others may use a blend of multiple PDPM components.”
Whichever direction an individual state may go with its payment methodology, it’s almost guaranteed that section GG will be somewhere in the mix, says Heichel. “Section GG accuracy will be critical to making sure that you are reimbursed for the care that you are providing whether the payer is FFS Medicare Part A or Medicaid case-mix.”
In addition, some states are adopting QMs into their Medicaid reimbursement programs to incentivize quality improvement, says Heichel. “These incentive programs pay based on provider performance on select QMs, often including QMs that target function. So, multiple programs from a federal standpoint and from a state standpoint look at resident outcomes with an activities of daily living (ADL) component.”
NAC actions—and what to expect at the conference session
The bottom line is that providers face a huge amount of direct and indirect payment risk if section GG documentation is insufficient to support accurate coding, says Heichel. “Section GG supporting documentation may be coming from multiple sources, including certified nursing assistants (CNAs) or state-tested nursing assistants (STNAs), the floor nursing staff, or the physical therapists and occupational therapists when they are doing evaluations or treatments. Any of those sources could inadvertently provide inaccurate documentation.”
Therefore, the NAC cannot stop at just reviewing for the presence of section GG documentation, advises Heichel. “Your job is to be a private investigator and ensure that the accurate picture of that resident is being represented on the MDS. You should evaluate all that information provided by the IDT, and if you don’t agree with what you are seeing documented, you have to go out and find the right answer.”
That investigative process should include interviewing staff members, observing care, talking to residents, and talking to family members, says Heichel. “Then, you have to document that information to make it part of the medical record.”
During the conference session, attendees will learn about what is the “required” documentation to support section GG, says Heichel. “We will also explore documentation best practices from both an additional documentation request (ADR) standpoint and a state survey standpoint based on the intent behind section GG in the RAI User’s Manual and what’s been happening in the provider community. The goal is for you to walk away with the information that you need to support section GG—and your claims—from a risk standpoint.”
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