Payroll-Based Journaling Guide

September 20, 2022 Kimberly Anderson-Mutch

When the Affordable Care Act (ACA) passed in 2010, the law had three primary goals—increase access to health insurance, expand Medicaid coverage, and support methods of medical care that would lower the cost of health care. Another part of the ACA was a provision requiring long-term care facilities to submit payroll-based journals as a way to standardize how quality of care is measured. Under Section 6106, long-term care facilities need to submit census information, which is now optional, and staffing information periodically. This information is submitted via a report called a payroll-based journal, or PBJ.

The goal of the payroll-based journal reporting requirement is to collect frequent and regular information from facilities to verify the quality of care and ensure standards are being met. The Centers for Medicare and Medicaid Services (CMS) also posts the information to their CMS Nursing Home Compare website, and it is used in the Nursing Home Five Star Quality Rating System to help consumers understand the level and differences of staffing in senior living facilities. This means getting a strong PBJ reporting strategy in place is critical for organizations hoping to maintain a high-quality rating to drive consumer confidence and interest in their services.

Falling out of compliance could hurt your consumer reputation and cost you money in the way of fines and resources needed to resolve any compliance missteps.

PBJ reporting was voluntary as of 2015 and became mandatory for all long-term care facilities as of 2016. In this article, we break down the basics of PBJ reporting and how you can ensure your facility remains compliant with the ACA.

What Is Payroll-Based Journaling?

CMS developed the payroll-based journaling system so that long-term and skilled care nursing facilities can regularly submit staffing information to inform quality measurement initiatives. Facilities should submit payroll-based journals to CMS on a set schedule, using an electronic format. 

The information submitted needs to be accurate and complete and should include information on agency and contract staff. It covers both nursing staff and non-nursing staff, including those with some administrative tasks. A PBJ should also include information on the residents of the facility with the Minimum Data Set (MDS) submission.

With a PBJ, it is easy to see how well-staffed or under-staffed a facility is. The journal also provides insight into the turnover rate of a facility. Usually, the higher the turnover rate, the lower the quality of care residents receive, as there is limited consistency. Facilities that have long-tenured staff and lower rates of turnover typically earn higher rankings and provide higher-quality care. With the right PBJ, you can even predict your capability of reaching a five-star rating. This is just one of the many reasons it’s important to give your staff the flexibility and tools they need to feel committed to your organization and increase your ability to retain your best employees.

Although it's important for building a strong team and complying with regulations, collecting and submitting the information needed for PBJ can be time-consuming and challenging if you aren't set up for it, especially when you consider the complexities of overnight shifts and agency nurses. Other challenges include submitting your data in the right format, aggregating a large collection of information, and making sure you have an audit trail in place.

Preparing for PBJ with assisted living software can help streamline the process and reduce the challenges associated with it. SmartLinx can painlessly generate PBJs, incorporate all agency hours, and reconcile timecards in real-time to support accurate, automated processes that give you more time to focus on improving patient care.

Why Payroll-Based Journaling Matters

CMS offers a Nursing Home Compare tool that lets consumers compare the quality of senior living facilities. The tool uses a five-star rating system that's based on three categories:

  • Quality measures
  • Health inspections
  • Staffing

A facility that earns a five-star rating is "much above average," while a facility with a one-star rating is "much below average." A facility with a three-star rating is "average." The rating system accomplishes several goals. It lets consumers make informed decisions about where to send their loved ones or where to move themselves. It also gives senior living facilities an idea of what they need to do to improve their rating. Additionally, regulators use the rating to determine whether or not to approve a facility for renovations. Hospitals use the rating system when deciding where to refer patients.

Payroll-based journals play a crucial part in determining the staffing component of a facility's rating. Per CMS, two factors determine the staffing rating. The first is the total staffing hours, and the second is the number of registered nurse (RN) hours per day. Given the complexity of these two factors, submitting accurate PBJs can help your facility earn or maintain five-star status.

How the Payroll-Based Journal Reporting Process Works

Facilities that need to submit a PBJ to CMS have two options for doing so. They can submit their data manually or upload data from an automated system. Automation is much faster and usually more efficient for these organizations. Whether your facility uses the manual submission method or an automatic upload, you need to include certain pieces of information in the reports. It's critical that you include the required information to maintain your facility's star rating.

What to Include in a Payroll-Based Journal Report

The information you submit in a PBJ report should focus on the activities of direct care staff. CMS classifies direct care staff as workers who contact residents or management of resident care interpersonally. Direct care staff offer services that help residents achieve mental, psychosocial, and physical well-being as much as possible. People who primarily focus on maintaining the environment of a facility, such as the housekeeping team, do not count as direct care staff. Agency hours must be included in the report.

The report should categorize the type of work individual direct care staff members perform. For example, a person might be a therapist, licensed practical nurse, or registered nurse. Additionally, the report should provide information about how long each staff member has been working for the facility and the turnover rate. For each staff category, it should also include details on the providers' number of care hours per resident per day.

Resident census data can be part of the report. A PBJ should list the number of residents who receive Medicare or Medicaid and those who pay through other means. Providing detailed information about your direct care staff's activities, how much they work, and how long they've worked at your facility provides valuable data about your facility's turnover rate and overall quality of care.

Entering Employee Information in a PBJ

When you submit a PBJ, CMS expects you to include specific information about each member of your facility's direct care staff. The employee information you need to include in a PBJ is:

  • Employee ID: Every employee needs to be assigned a unique ID, which can't be shared with current or former employees. The ID can contain numbers and letters, but it can't contain any potentially identifying information, such as part of the employee's name or Social Security number.
  • Job title: The report should include a description of the employee's primary role at the organization, even if they perform multiple roles over the course of a shift or during the week.
  • Job title code: CMS has 40 job title codes that categorize employees based on their primary role, such as 10 for a certified nurse's aide or 15 for a pharmacist. The PBJ needs to include the correct job title code for each employee.
  • Work date: The work date is the day on which a person worked at the facility. If someone worked an overnight shift, the date should be split into two. For example, if someone worked from 11 p.m. on 5/4/2021 until 7 a.m. on 5/5/2021, there should be two separate entries on the report, one for 5/4, the other for 5/5. Automation tools can help reconcile your information to timecard data in real time, so you don't need to perform any tricky calculations.
  • Hours: Include the hours you paid an employee, not necessarily the hours they were on the job. For example, if someone was on the job for nine hours but was only paid for eight, the report should list eight hours. You should also deduct any meal times from the hours worked, whether the employee gets paid for meal breaks or not. If someone gets paid for eight hours but has a 30-minute meal break, record 7 1/2 hours. Use decimals and report hours rounded to the nearest tenth. For example, someone who worked 7 hours and 12 minutes worked 7.2 hours.
  • Pay type: CMS has three pay type codes based on whether an employee is exempt, nonexempt, or a contract worker.

The number of job title codes and the need to give every employee a unique ID can make manually inputting PBJ data an overly complex chore. Software that streamlines the data entry process and that automatically calculates hours worked and work dates makes the process smooth and painless.

Entering Census Data in a PBJ

Facilities have the option of including resident census data when they submit a PBJ. If you decide to include census data, you can input the number of residents whose primary payer is Medicaid, Medicare, and Other on the last day of each month.

How to Submit a Payroll-Based Journal

You can submit a PBJ using manual submission, meaning someone from your facility inputs the relevant data by hand into the CMS system. Manual submission takes a considerable amount of time and can lead to data entry errors. Another option is to use an automated time tracking and payroll system to format the data to meet CMS standards and requirements for you.

Using an automated software program minimizes the risk of human error or data entry mistakes. It also saves your team time and energy, allowing them to focus on more important issues, such as providing the best care possible to residents. If you decide to automate the submission process, make sure you choose a software program that fully complies with CMS regulations and specifications. Another advantage of submitting your PBJ with software is that it can offer advanced predictions based on the information. SmartLinx, for example, can predict your five-star ratings.

What Are the Benefits of Payroll-Based Journaling?

CMS uses the data found in a PBJ as part of its facility evaluation and ranking process. Staffing is one of the measures CMS uses to determine how to rank a facility. If the data in a PBJ reveals that a facility is consistently understaffed, it could drop down in the rankings. Facilities that rely on contract workers or higher turnover rates can also see their rankings drop.

With strong PBJ reporting, you can gain valuable insights into your CMS rankings and improve the facility overall. You can use this information to guide your staffing decisions and help you understand the patterns associated with your staff's working hours.

PBJ reporting helps keep a facility accountable, as the information it submits needs to be accurate for the facility to remain in compliance with CMS. Along with being accountable, using a PBJ can also lead to an improvement in the quality of care your facility provides. By aiming to reach CMS' scheduling measures, your facility can see a dramatic improvement in the care it provides. Using an automated software solution helps ensure the journal data is accurate, allowing a facility to maintain a high-quality rating from CMS.

PBJ is useful on its own, but automating the process can help you maximize your results and achieve benefits like:

  • Efficiency improvements: Manual PBJ is time-consuming and can quickly limit the time you have to focus on patient care activities and administration. Automated PBJ drastically reduces the amount of time it takes to create, submit, and check PBJ reports, so you can create a hands-off process and spend more time on residents. There's no need to scramble to get reports completed before the deadline or spend hours getting everything in order.
  • Accuracy: With an automated platform, the person working on PBJ doesn't need to understand tricky formatting or inclusion requirements. The software simply pulls the information it needs and formats it in the right kind of file for CMS. You can be confident in your submissions and avoid spending time on reviews, scouring the data for errors. There's also no need to spend time on tricky tasks, like splitting up overnight shifts or comparing electronic entries to real time card data. SmartLinx reconciles PBJ timecard information and seamlessly incorporates agency hours.
  • Easy auditing: When you submit PBJ manually, you have to take steps to create audit trails and make sure CMS can assess your information if necessary. Automating the process allows the software to quickly take care of this task, keeping your detailed information on file should CMS need to check the integrity of your records.
  • Flexibility: At SmartLinx, we also take care to retain source data and processing history information. Healthcare regulations are always changing, and we want you to be prepared for whatever the future may hold.
  • Predictions: Manual submissions could leave you guessing what kind of rating CMS will issue. SmartLinx can predict five-star ratings and help you understand your data.

Manual solutions are vulnerable to human error and slow labor demands. If you're looking to minimize the burden of PBJ and improve peace of mind, automated software is the way to go.

Payroll-Based Journal FAQ

Since the payroll-based journal requirement was first introduced, many in the industry have had questions about how it works, who needs to use it, and how to streamline the process. Here are some answers to a few of the most commonly asked questions about payroll-based journal reporting:

1. What Types of Providers Need to Submit a PBJ?

Under section 6106 of the ACA, all long-term care facilities need to submit quarterly PBJs. A long-term care facility is an organization that offers skilled nursing to patients or residents who need help with everyday activities. Facilities for older adults, long-term chronic care hospitals, rehabilitation centers, and behavioral health facilities that provide inpatient services are all examples of long-term care facilities that need to submit a PBJ. Part 483, Subpart B of the Code of Federal Regulations further defines a long-term care facility.

2. What Information Do You Include in a PBJ?

A PBJ needs to contain certain pieces of information. Notably, it should contain employee identification in the form of unique employee ID codes and a coded description of their job title. It should also include information on the number of paid hours performed by an employee and the work dates.

The journal should include information regarding employee tenure, such as their hire or start date and the termination date, if applicable. You can also include information on the number of residents at the facility at the end of each month.

3. How Do I Report Hours in a PBJ?

You can report paid hours in the PBJ, which might not be the same as the total hours an employee works. You should also subtract the length of time for meals taken by an employee each day. Use decimals, rather than hours and minutes, when reporting paid time.

For example, instead of reporting that an employee worked 7 hours and 15 minutes, record 7.3 hours paid. When calculating decimals, every six minutes counts at 0.1 hours. Round up to the nearest tenth when reporting. An employee who worked 7 hours and 45 minutes should be recorded as having worked 7.8 hours. Keeping track of hours this way can get incredibly mind-numbing and is prone to a myriad of inaccuracies, which is another reason many in the industry are turning to software to automate the process.

4. What Types of Jobs Are Included in a PBJ?

Use a PBJ to report paid hours of direct care staff. CMS codes 1 through 40 include both direct care and nondirect care staff. Examples of direct care staff are nurses, nurse assistants, occupational therapists, and physician assistants. Examples of nondirect care staff, who don't need to be reported in a PBJ, include clinical laboratory service workers, housekeeping service workers, and diagnostic X-ray service workers.

5. What Are the Submission Deadlines for a Payroll-Based Journal?

You should submit a PBJ every quarter. The reports are due by the end of the day on the 45th day after the last day of the fiscal quarter. For example, you should submit the PBJ for quarter 1 no later than 11:59 p.m. on February 14. Missing a deadline can mean a drop in your facility's star rating.

Below is a list of CMS fiscal quarters and their corresponding PBJ report due dates:

  • Quarter 1: October 1 to December 31 (PBJ due date: February 14)
  • Quarter 2: January 1 to March 31 (PBJ due date: May 15)
  • Quarter 3: April 1 to June 30 (PBJ due date: August 14)
  • Quarter 4: July 1 to September 30 (PBJ due date: November 14)

6. How Do I Format PBJ Data?

How you format PBJ data depends on your submission method. If you use an automated software program to submit data, you should upload an XML file to the CMS website. The XML file needs to meet the requirements of CMS. Using software allows you to quickly enter and submit your PBJ data, meaning there will be one less thing on your to-do list.

If you input data manually, you will enter it using the CMS interface. The system is user-friendly and will walk you through the process of inputting data. As you enter data, save the information to avoid having it get lost if your system crashes or there's an issue with the computer you're using.

7. Does Our Facility Need to Submit Hours for Contract Workers?

CMS expects long-term care facilities to include paid hours for contract workers who provide direct care, even if the workers are employees of a third party, such as a staffing agency. CMS offers three options for reporting contract worker hours. They can be included in the attendance system your facility uses, they can be entered as designees of the facility, or the staffing agency or vendor can provide your facility with an XML file that includes hours for agency nurses.

8. Are There Penalties if Our Facility Misses a Deadline?

If your organization is operating in good faith in attempting to accurately submit and report employee hours, CMS will likely work with you to correct any missed deadlines or incorrect information reported. If you miss a deadline and don't take steps to correct it, your facility's rating can fall to one star on CMS's Five Star Rating system, which can mean fewer potential residents consider your facility.

9. How Can Our Facility Streamline the PBJ Reporting Process?

Although manual entry is an option for PBJ reporting, it can be time-consuming and ripe for errors. If your staff is very busy, it's easy to overlook manual reporting, leading to missed deadlines. One way to streamline the submission process is to fully automate it. SmartLinx centralizes data on your employees and automatically collects the information you need in one place, producing accurate journal reports with just the click of a button.

10. Can Our Facility Change Employee IDs if We Switch From a Manual to Automated Reporting Process?

If you change the process you use to submit your PBJ, there is a chance that the new system will create new employee IDs for each staff member. While it's preferable to maintain staff IDs, you can try to link the old identifiers to the new ones if it's not possible. The new software you use will need to align with CMS's technical specifications.

Contact SmartLinx Today

Make sure your facility remains compliant with the ACA by submitting your payroll-based journals online and with accurate data. You don't need to rely on outdated manual reporting methods to get the job done. SmartLinx offers workplace management tools designed specifically for the needs of long-term and skilled nursing care facilities. Our software platform delivers everything you need to effectively manage your staff and maintain compliance. To learn more, schedule a demo of our software today.

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