Improving MDS Accuracy: Strategies to Maximize PDPM Reimbursements

Accurate Minimum Data Set (MDS) assessments play a crucial role in ensuring proper reimbursement under the Patient-Driven Payment Model (PDPM). As every detail in the MDS impacts case-mix classification and ultimately affects payment rates, even small errors can lead to revenue loss or compliance issues. In fact, improving accuracy is not just the responsibility of the MDS coordinator but it requires a coordinated team effort. Nurses, therapists and coding specialists must work closely with billing staff to ensure that documentation is complete, diagnoses are coded correctly, and functional scores accurately reflect the resident's condition.

This blog will explore why MDS accuracy matters under PDPM and how skilled nursing facilities can strengthen their processes to avoid costly mistakes with the help of the following strategies:

• Accurate Diagnosis and Surgical History

Capturing the correct diagnosis and surgical history is one of the most critical steps for accurate PDPM reimbursement. Billing and coding teams must ensure ICD-10 codes are applied correctly and align with procedures documented in the resident's medical chart. If diagnoses are incomplete or not properly coded residents may be assigned to lower-paying case-mix groups. Therefore, conducting detailed chart reviews and encouraging consistent collaboration among nurses, physicians and billing staff ensures that every diagnosis is accurately reflected to optimize reimbursements.

• Functional Scores (Section GG)

Section GG is a central part of the MDS that measures functional ability in self-care and mobility, directly influencing PDPM reimbursement. Nursing and therapy staff must document resident performance with precision and consistency to prevent underreporting. If entries are incomplete or underestimated, facilities risk being assigned to lower payment categories. As a result regular validation and cross-checking of Section GG data between teams ensures an accurate reflection of resident needs. Therefore facilities can strengthen both compliance and reimbursement outcomes by closely monitoring this data.

• Speech-Language Pathology (SLP) Factors

Speech-language pathology payments depend on conditions such as swallowing disorders, cognitive impairment, and dietary modifications. When these factors are not accurately captured in the MDS, facilities often miss legitimate reimbursement opportunities. For example, SLP-related payments are missed when a mechanically altered diet is prescribed but not coded. As a result, coordinated documentation by therapists, nurses, and billing teams ensures these details are consistently reported.

• Non-Therapy Ancillary (NTA) Points

NTA points represent clinical complexity by accounting for conditions like HIV/AIDS, IV medication use or multiple comorbidities. In fact, they heavily influence reimbursement during the initial days of a resident's stay. It is important to note that missing just one qualifying condition can cause significant revenue loss. Billing and coding staff must carefully review charts, validate treatment notes, and align documentation with MDS entries. Therefore, every qualifying condition is captured not only to support compliance but also to maximize the rightful reimbursement under PDPM.

• Nursing Component: Depression and Restorative Care

The nursing component within PDPM considers factors such as depression screenings and restorative nursing programs, both of which directly affect classification. Billing and coding teams should confirm that tools like the PHQ-9 are completed and results are accurately documented. Similarly, restorative services like mobility or range-of-motion programs must be recorded in detail. As a result, omitting this information may place residents in lower-paying groups. Therefore, ensuring that documentation aligns with MDS entries allows facilities to receive accurate payment for the care actually provided.

• Special Treatments and Services (Section O)

Section O records special services such as dialysis, ventilator care, chemotherapy, and IV medications which significantly affect PDPM reimbursement. Missing documentation in this section often results in lower payment categories and revenue loss. To prevent such errors, billing and coding professionals should use structured checklists and cross-verify clinical notes against MDS entries. Regular communication between providers and billing teams ensures every treatment is reported. As a result this process allows SNFs to capture the complete scope of care delivered and achieve accurate reimbursement.

• Interim Payment Assessments (IPAs)

IPAs allow facilities to update payment rates when a resident's condition changes significantly during their stay. Without timely IPAs, facilities may continue to receive lower reimbursements despite providing more complex care. Billing and coding teams must actively monitor resident status, identify clinical changes and collaborate with nursing staff to determine when IPAs are required. Therefore submitting IPAs promptly ensures payments remain accurate and supports compliance with PDPM rules.

• Documentation Audits and Alignment

Documentation accuracy is crucial for compliant billing under PDPM. All clinical documentation must align with MDS entries and claim submissions to avoid errors or denials. Further internal audits provide a valuable protection by identifying discrepancies like missing diagnoses or incomplete treatment notes before they impact reimbursement. Thereby billing and coding teams should conduct regular chart reviews, cross-check coding accuracy, and verify that claims reflect the full scope of resident care. This practice mitigates denial risks and ensures a consistent revenue stream.

• Utilizing Technology and Software

Modern EHR systems and coding software play a critical role in enhancing MDS accuracy. These tools can identify missing data, flag discrepancies, and ensure ICD-10 codes are applied correctly for PDPM categories. Automated alerts guide billing teams to resolve errors before claim submission to prevent the claim rejections or underpayments. Technology also streamlines communication among clinical and billing staff to make workflows more efficient and consistent. Therefore, facilities reduce human error, strengthen compliance and improve reimbursement outcomes by integrating technology into daily operations.

• Timely MDS Assessments

Strict deadlines apply to MDS submissions including the 5-day assessment and IPAs. In fact failure to meet these timelines can delay payments or result in denials. Billing and coding teams must carefully track assessment due dates, validate accuracy and guarantee timely submission of all required data. This proactive strategy guarantees that reimbursements reflect the actual care provided and works in compliance with the federal rules and regulations.

• Outsourcing MDS and Billing Support

Given the complexity of PDPM requirements, many facilities benefit from outsourcing billing and MDS support. Partnering with a professional medical billing company like 24/7 Medical Billing Services provides access to skilled coders and compliance experts who specialize in PDPM optimization. Outsourcing reduces administrative burdens on facility staff, minimizes costly errors, and improves claim acceptance rates. With expert support, facilities can focus on delivering high-quality patient care while ensuring accurate reimbursements and stronger financial performance.

FAQs

Q1. Are all states adopting Medicaid PDPM the same way?

No, state Medicaid PDPM structures vary and require facility-specific review.

Q2. Can poor documentation affect facility audits?

Missing or inconsistent MDS entries are common audit triggers.

Q3. What role does timing play in MDS submission?

Timely submission avoids penalties and ensures smooth reimbursement cycles.

Q4. How often should MDS training be refreshed?

At least twice a year to keep pace with CMS updates and best practices.