default rate

In the context of the Minimum Data Set (MDS) 3.0 for Skilled Nursing Facilities (SNFs) and the Patient-Driven Payment Model (PDPM) under the Skilled Nursing Facility Prospective Payment System (SNF PPS), the "default rate" refers to a specific billing rate applied by Medicare. This rate comes into effect under certain conditions when the required MDS assessments are not completed within the prescribed Assessment Reference Date (ARD) windows or when certain assessment requirements are not met.

According to the CMS's RAI Version 3.0 Manual, Section 2.14, "Non-Compliance with the PPS Assessment Schedule," if an assessment does not have its ARD within the prescribed ARD window, it will be paid at the default rate for the number of days the ARD is out of compliance. This default rate replaces the otherwise applicable Federal rate and is equal to the rate paid for the Health Insurance Prospective Payment System (HIPPS) code reflecting the lowest acuity level for each PDPM component. Typically, the default rate is lower than the Medicare rate payable if the SNF had submitted an assessment in accordance with the prescribed assessment schedule​​.

Therefore, the default rate acts as a financial penalty for facilities that fail to schedule and complete the required MDS assessments within the specific time frames mandated by the Centers for Medicare & Medicaid Services (CMS). This system ensures that facilities conduct timely and accurate resident assessments, which are crucial for determining appropriate care needs and for the correct billing of Medicare Part A stays.