Navigating Pdpm Updates: How Snfs Can Optimize Reimbursement

By Author: 247 medical billing
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Skilled Nursing Facilities (SNFs) are stepping into FY 2026 with crucial updates from CMS that will directly affect payments, compliance, and care delivery. Starting October 1, 2025, CMS will implement a 3.2% increase in SNF Prospective Payment System (PPS) rates, translating into approximately $1.16 billion more in federal payments.

At the same time, SNFs will face an estimated $208 million reduction under the SNF Value-Based Purchasing (VBP) Program. While the overall payment pool is larger, reimbursement adjustments will now depend more heavily on quality of care and performance outcomes.

These changes come alongside Patient-Driven Payment Model (PDPM) updates that highlight the importance of accurate coding, strong documentation, and compliance. For Skilled Nursing Facilities, this means that strategic planning and effective billing services are no longer optional—they are critical for survival and growth.

What is PDPM and Why It Matters?
The Patient-Driven Payment Model (PDPM), introduced in 2019, replaced the old RUG-IV system, shifting the focus from therapy minutes to patient clinical conditions ...
... and care needs. Payments are determined across five categories:

Physical Therapy (PT)

Occupational Therapy (OT)

Speech-Language Pathology (SLP)

Nursing

Non-Therapy Ancillaries (NTA)

This model ensures that reimbursement reflects patient acuity, not service volume. For SNFs, accurate coding and documentation directly influence Medicare payments, compliance, and patient outcomes.

Key PDPM Updates for FY 2026
CMS has finalized several important PDPM updates effective October 1, 2025:

1.Revised ICD-10 Code Mappings

34 changes were made to ICD-10-CM mappings.

Conditions like obesity, hypoglycemia, anorexia, bulimia, and diabetes without complications will no longer qualify as primary diagnoses for Medicare Part A SNF stays.

These are now flagged as “Return to Provider”, reinforcing the need for precise and clinically justifiable diagnoses.

2.Alignment with ICD-10-CM Guidelines

Updates aim to reduce billing confusion and ensure reimbursement reflects actual resident needs.

SNFs must update their systems with CMS’s 2026 ICD-10-CM conversion tables to prepare coding teams.

3.Impact on Case-Mix and Reimbursement

Incorrect or outdated coding during the Minimum Data Set (MDS) admission assessment can lead to reduced reimbursement or denials.

Proper coding and documentation are essential for compliance and revenue protection.

Strategies for SNFs to Optimize Reimbursement
To succeed under the FY 2026 PDPM rules, Skilled Nursing Facilities must take proactive measures:

1.Accurate and Updated Coding

Train billing and clinical staff on revised ICD-10 mappings.

Avoid disallowed codes and work with physicians to establish precise, defensible diagnoses.

2.Stronger Documentation Practices

Document in real-time across nursing, therapy, and physician care.

Ensure every service is supported in resident charts to reduce audit risks.

3.Internal Audits and Compliance Monitoring

Regularly review MDS assessments, diagnoses, and claims.

Spot patterns such as repeated disallowed codes to prevent revenue leakage.

4.Utilize Technology and PDPM Tools

Update EHR systems with CMS’s latest PDPM rules.

Use PDPM calculators and analytics tools to capture overlooked reimbursement opportunities.

5.Staff Training and Education

Conduct ongoing training for MDS coordinators, nurses, therapists, and physicians.

Focus on coding, compliance, and documentation best practices.

6.Align Therapy and Clinical Care

Design therapy plans that reflect resident needs and physician diagnoses.

This not only secures reimbursement but also supports VBP-driven quality outcomes.

How Outsourcing SNF Billing and Coding Services Helps
For many Skilled Nursing Facilities, keeping up with CMS updates, PDPM rule changes, and compliance standards is overwhelming. This is where outsourcing SNF billing and coding services becomes a game-changer.

Benefits of Partnering with 24/7 Medical Billing Services:
Partnering with 24/7 Medical Billing Services helps Skilled Nursing Facilities simplify billing, improve compliance, and maximize reimbursement under the latest PDPM rules.

End-to-End Revenue Cycle Management: From claims submission to denial management, every step is covered.

Proactive Policy Monitoring: Experts stay updated on CMS changes and guide SNFs through adaptations.

Data-Driven Insights: Tracking denial rates, AR days, and reimbursement trends to spot revenue opportunities.

Compliance Support: Stronger documentation, coding accuracy, and reduced audit risks.

By outsourcing, SNFs gain not just billing support but a strategic partner who ensures compliance, maximizes reimbursement, and helps facilities focus on delivering quality care.

Final Takeaway:
With FY 2026 bringing both higher PPS rates and stricter PDPM rules, Skilled Nursing Facilities must sharpen their coding, documentation, and compliance practices. Partnering with experts in billing services and leveraging outsourcing SNF billing and coding services ensures facilities not only remain compliant but also maximize reimbursement and thrive in a value-based care environment.

FAQs
Q1. How often does CMS update PDPM rules?

Typically, PDPM updates are released annually with each fiscal year.

Q2. What are the risks of poor PDPM management?

Revenue loss, claim denials, compliance failures, and increased audit exposure.

Q3. Can outsourcing billing services benefit SNFs?

Yes. Outsourcing brings specialized expertise, reduces errors, and allows SNFs to focus on care delivery.

Q4. What’s the best way to prepare for CMS changes?

Ongoing staff training, technology updates, and partnering with experts in end-to-end revenue cycle management.

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