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Understand the MDS Trickle-Down Effect

A tall glass of crystal-clear water is very refreshing. But water that is murky, has particles floating around, or a mineral odor isn’t appealing – and may be dangerous. The source of the water is often the key to its clarity and taste. The source must be well-maintained and managed to ensure a high-quality output. The same principle applies to MDS data. The source of the data used to code the MDS must be well-maintained and managed to achieve high-quality outcomes in the many buckets that the downstream effect of MDS data fills. This article will examine how the source of MDS data can trickle down to affect the care plan, reimbursement, Quality Measures, and the consumers’ view of facility outcomes.

Water Source (MDS Data)

Every item on the MDS must be supported by source documentation, except for the scripted resident interviews. This means that anyone auditing the MDS who looks at the same source documentation for the look-back period should come to the same coding conclusions. The quality of the source documentation directly affects how the resident appears on the MDS. All available sources—such as medication and treatment records, nurses’ notes, physician notes, skin assessments, nurse aide charting, and therapy notes—can be valuable documentation of a resident’s condition. Yet, inadequate or unclear documentation that does not clearly support the coding of the MDS can result in an inaccurate assessment.

When nurse assessment coordinators (NACs) identify documentation that is unclear or does not adequately support the MDS, they may need not only to address the issue with the staff member who completed the documentation, but also to raise it to nurse leaders as well. The root cause of inadequate documentation may be a faulty clinical system or practice, which will require the nurse leader to address. When nurse leaders develop clinical systems and practices to ensure sound clinical documentation, the result is a process that supports the MDS process and the resulting outcomes.

Downstream Buckets (Data Output)

Care plan development

In the resident assessment instrument (RAI) process, the MDS is the foundation of the care plan. The MDS is used to screen for potential and actual problems, which the care area assessment process then investigates further. The RAI process results in the development of the care plan, based on the assessment and care plan decisions from the care area assessments. Inaccurate or unclear source documentation could result in a potential or actual problem not being addressed appropriately in the care plan, which could result in adverse outcomes.

Medicare Reimbursement

The Patient-Driven Payment Model (PDPM) is the methodology that determines the per diem rate for Medicare Part A residents. PDPM is based on resident characteristics—diagnoses, functional status, cognition, wounds, treatments, behaviors, services, medications—all of which require supporting documentation in the medical record. Inaccurate or unclear documentation can lead to under- or over-payment from Medicare Part A, both of which cause problems for the facility. The goal is accurate reimbursement.

State Medicaid Reimbursement

Many states’ Medicaid programs use a payment methodology, such as legacy resource utilization groups (RUGs), that is based on MDS coding. While these reimbursement methodologies also draw from many of the resident characteristics mentioned previously, they also may be affected by therapy minutes and days reported on the MDS. Overall, Medicaid payment has the same risks as Medicare reimbursement for under- or over-payment. Clear and accurate source documentation is necessary to support accurate reimbursement.

Quality Measures (QMs)

Many different QM programs use MDS data. These include MDS 3.0 QMs, Skilled Nursing Facility (SNF) Quality Reporting Program (QRP), and some publicly-reported claims-based measures. Facility staff use these measures for continuous process improvement efforts and to advance the quality of care and outcomes of the residents they serve. However, unclear or inadequate documentation can result in inaccurate reporting of quality outcomes.

Fountain Display (Public View of Data)

Care Compare is how the Centers for Medicare & Medicaid Services (CMS) displays outcomes, including QMs, to the public. Consumers and other stakeholders can view this information when considering referrals to the facility. Additionally, accountable care organizations (ACOs) and Medicare Advantage plans use this public data for determination in partnership or contracts. The source documentation, even if corrected, will not change data once it is publicly reported. To avoid potential negative impacts to census, the facility staff must have a process to monitor and audit the accuracy of the source documentation and MDS coding before it becomes publicly available.

Scenario #1 – Inadequate Documentation

Consider a resident who is admitted to the facility with a wound on the bottom of her foot. The admission and 5-Day PPS assessments are combined, with an assessment reference date (ARD) set on day 8 after admission. A wound assessment on day three identifies the wound as a pressure ulcer with full-thickness tissue loss and exposed muscle. The wound is documented as a Stage 4 pressure ulcer. On day 9 of the stay, the MDS is coded with one Stage 4 pressure ulcer that was present on admission. This triggers the pressure ulcer/injury care area assessment, and a care plan is developed based on standard protocol for pressure ulcers to the feet. A Stage 4 pressure ulcer qualifies the resident for the Special Care Low category for the nursing component and for one point in the non-therapy ancillary (NTA) component of PDPM. On day 12 of the stay, the resident visits a wound specialist who identifies the wound as a diabetic foot ulcer. Inaccurate identification of this wound results in an inaccurate care plan, a treatment that was not appropriate based on the etiology of the wound, and inaccurate reasons influencing PDPM methodology.

Scenario #2 – Adequate Documentation

Consider the same resident when documentation adequately supports MDS coding. A resident is admitted to the facility with a wound on the bottom of her foot. The nurse documents the characteristics of the wound on the skin assessment as round in shape, with calloused edges, 4 x 4 cm and 2 cm deep with necrotic tissue noted in the wound bed. The nurse also notes that the resident has a diagnosis of diabetes mellitus and neuropathy. The nurse notifies the physician, who identifies the wound as a diabetic foot ulcer. The physician orders daily dressing changes and refers the resident to therapy for a shoe orthotic. The admission and 5-Day PPS assessments are combined, with an ARD set on day 7 after admission. The PDPM methodology in the nursing and NTA components appropriately use diabetic foot ulcer and treatments. The care plan appropriately addresses the diabetic foot ulcer with a referral to therapy. The strong clinical process and supporting documentation provide the documentation necessary to support the MDS and achieve desired resident outcomes.


To result in accurate MDS coding, the source documentation used to code the MDS must be of high quality, monitored, and accurate. The MDS’s trickle-down effect to the care plan, reimbursement, QMs, and publicly reported data cannot be overstated. However, a facility’s focus cannot be solely on the MDS data; it must also consider the quality of the source of the data. Facility leadership that focuses on the entire process, from the clinical documentation through the RAI process, will see results that accurately reflect the quality of care provided in the facility.

Notes: AAPACN created the free member tool, MDS Trickle-Down Effect, to provide a visual example of how MDS data and supporting documentation affect the areas mentioned above.

AAPACN has also created a new product, MDS Development: A Toolbox for the NHA and DNS. This toolbox is a valuable set of tools designed to help the administrator and DNS better understand the impact, extent, and complexities of the MDS role. With this information, facility leadership can improve collaboration with the NAC to achieve a great clinical partnership. NACs, please share this toolbox with your administrator and DNS.

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