Payroll-Based Journal for Skilled Nursing Facilities Essential Guide for Streamlining Compliance

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The Centers for Medicare and Medicaid Services (CMS) requires skilled nursing facilities to report staffing hours quarterly. This requirement stems from the Affordable Care Act (ACA) and pertains to long-term facilities participating in Medicare and whose primary role is nursing care. The requirements are spelled out in 42 CFR Part 483 and ACA Section 6106.

Staffing hours must be reported in a format known as Payroll-Based Journal (PBJ) within 45 calendar days of the end of each quarterly reporting period. The data is used along with census data (daily resident count) and factored by a measure of care intensity required (case mix). The resulting average hours of care per resident are used to establish the care quality star rating and as a component of overall rating for the facility.

Star ratings are used by the public to compare care facilities through Nursing Home Compare. The underlying data is also used by CMS to measure and audit the performance of skilled nursing facilities.

Skilled Nursing Facility Staffing Requirements

Staffing has long been recognized as a key component of care quality. The staffing requirements have been refined since the debut of PBJ reporting in 2016, but continue to focus on direct care. CMS defines direct care, according to the PBJ Policy Manual, as:

“Those individuals who, through interpersonal contact with residents or resident care management, provide care and services to allow residents to attain or maintain the highest practicable physical, mental, and psychosocial well-being. Direct care staff does not include individuals whose primary duty is maintaining the physical environment of the long term care facility (for example, housekeeping).”

Accordingly, skilled nursing facilities must report all hours focused on direct care by position. Direct care can be provided by outside staff as long as the care is billed by the skilled nursing facility to Medicare.

CMS considers two measures of direct care:

  1. Daily hours for a Registered Nurse (RN). CMS requires a minimum of eight consecutive hours per day, seven days a week for each facility. As of April 2019, if within one quarterly period there are four or more days without an RN on site, the star rating automatically drops to one-star. States are now also notified of facilities with low staffing levels, triggering a review.
  2. Daily hours of all direct care (RN, Licensed Practical Nurse (LPN), Licensed Vocational Nurse (LVN), nurse aide). These hours are treated equally.

All direct care hours are correlated to the resident census to measure average hours of care per resident. RUG-IV is used to adjust staff hours based on the intensity of care required by each patient’s current condition. This adjustment allows the comparison of facilities by the same standard.

Additional staffing measures including tenure and turnover will likely be added to the star rating calculation in the future.

PBJ Reporting Details

CMS requires a complete, accurate daily staffing record for each person providing direct care at each facility. The quarterly report must include:

  • Unique facility ID for each facility
  • Unique employee ID for each individual providing direct care
  • Classification of each direct care provider as employee or agency/contract staff
  • Job codes and pay types as defined by CMS
  • Census data
  • Direct care hours by specific job codes per day
  • Direct care hours by individual per day
  • Direct care staff turnover and tenure

Many organizations have their own coding system that pre-dates CMS requirements. In this case, pay attention to properly mapping:

  • Job codes to CMS-defined codes
  • Pay types to CMS-defined pay types
  • Unique ID for individuals delivering direct care (including agency or contractor-supplied)

Be sure to also keep a record of all hours reported for direct care staff, agency, and contractors in case of audit.

Top 4 Good Faith issues [sidebar]

These good faith issues were noted by CMS when comparing hours submitted versus audited records:

  1. Meal breaks were not removed from hours worked.
  2. Not all employees had Unique IDs.
  3. Failure to exclude hours for staff that provided care to individuals in non-certified areas. For example, if space is shared between a hospital only the hours dedicated to residents of the nursing home should have been reported.
  4. Some facilities did not provide a timely response to the audit.

Timekeeping Essentials

  1. Track all hours. CMS cares about direct care hours, so be sure you can easily separate those from the other indirect hours.
  2. Track agency and contractor hours. These hours matter too, if they are direct care and billed by you to Medicare.
  3. Assign job codes and pay types. If you don’t already use a coding system, consider adopting CMS codes. If you have your own codes, be sure to carefully map them to CMS codes so that you can generate a proper PBJ report.
  4. Capture employee data. Double check that you have all the information required by CMS in the format needed (e.g., title, gender, hire date, termination data, EE ID).
  5. Keep an auditable report. Make sure you can quickly access your records in case of a CMS audit.
  6. Track certifications. Make sure you know when certifications will expire and which staff has the credentials for each direct care position (RN, LPN, LVN, nurse aide).
  7. Enforce clock in/out. Use your intelligent clock to ensure staff is working assigned hours. This avoids both unplanned overtime and understaffing.
  8. Remove meal breaks. CMS mandates a 30-minute period be removed from reporting for each full shift. This removal is to make consistent the work hours between different facilities regardless of each facility’s meal policy. Make sure you set a rule that removes this 30 minute period for shifts reported to CMS. For your own payroll, you can decide the duration of breaks and whether they are paid. Either way, have your employees clock in and out for breaks so you have a record.
  9. Punch for different jobs. Some organizations have individuals who can work multiple roles. For example, the Director of Nursing (non-direct care) may sometimes pick up a shift as an RN (direct care). In this case, the employee should clock-in with different codes depending on the shift assignment.
  10. Midnight divide. CMS requires your data to begin at midnight, even if that is in the middle of a shift. Be sure you are able to report for PBJ one way and another for payroll.
  11. Universal care workers. Be sure you have a reliable method to account for hours divided between direct care and other responsibilities. Only direct time can be reported to CMS.
  12. Mobile clock access. Give your employees the option to use their smart devices to clock in/out. This makes it faster and more convenient for employees on the go.
  13. Set alerts and notices. Alert employees and managers when there is a missed punch, certifications are due to expire, overtime is impending, or shifts need to be covered.
  14. Time card approval. Make it easy for managers and employees to review and approve time cards.
    Separate time off. Give your employees their time off benefits but make sure you do not report scheduled time off as hours worked.

Scheduling Essentials

  1. Be proactive. Design your schedules to meet required staffing levels for census. Add staffing as needed to meet your own standards above that. Create templates and shifts to make it easy to adapt to change.
  2. Publish early. Let staff know well in advance when they are scheduled to work to reduce absenteeism and turnover.
  3. Support shift trades. Be prepared to react to additional staffing requirements by allowing staff to trade shifts within the rules. Post open shifts for staff to select when added staff is required.
  4. Respect preferences. Let your employees indicate their preferences in scheduling. Even if you are not able to accommodate every preference, you are more likely to have schedule adherence.
  5. Correlate schedules and actuals. With advanced scheduling and intelligent timekeeping, you have the best chance of meeting or exceeding CMS staffing requirements in an efficient manner.

Hiring, Onboarding and Engagement Essentials

  1. Increase your talent pool. Healthcare is a fluid industry. Be prepared for when you need to hire. Place your job ads where they will attract high-quality applicants.
  2. Automate applicant tracking. With automation, it is easy to receive, score, sort and process job applications. Workflows make it simple to keep hiring managers applicants up to date on status.
  3. Hire the best. Your patients deserve the best care. Leverage automation to quickly identify top prospects and hire them before someone else does.
  4. Onboard quickly. Get through the paperwork fast. Gather all the tax, benefits, personal details and other information as fast as you can, so your new hire can begin contributing.
  5. Train consistently. Once your new hires are on the books, make sure they are receiving consistent and complete training. Automation can make this easier and provide a better audit trail. Make sure they understand how to clock in and out with their job codes, request time off, and adhere to schedules.
  6. Keep employees engaged. Provide an easy way for employees to provide feedback, review new policies, and nominate colleagues for team recognition. Employees who are engaged are more likely to give better care.

Reporting Essentials

  1. Stay current. CMS policies change. Be sure to routinely visit the CMS web site to ensure that you are aware of and compliant with the latest changes.
  2. Plan ahead. Know what staffing levels you want to maintain for your desired star rating. Schedule your staff based on the correlation of that to your census and RUG-IV factor. Publish your schedules early to optimize schedule adherence and adjust as needed.
  3. Submit early. You have 45 days from quarter end to submit. The earlier you do so, the more reaction time you have if there is an issue with the data or format.
  4. Confirm completion. Make sure you have confirmation that the report submission was completed without incident.

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