Preparing for PDPM: Changes Coming for Skilled Nursing

The Patient-Driven Payment Model (PDPM) was finalized by the Centers for Medicare & Medicaid Services (CMS) in July of last year. By now, long term care providers and skilled nursing facilities are busy preparing for the impending changes coming this fall.

PDPM is a new Medicare payment rule for Skilled Nursing Facilities (SNF), replacing the Resource Utilization Group (RUG) system later this fall. PDPM is an entirely new way of calculating healthcare reimbursement. PDPM assigns residents a case-mix classification that drives their daily reimbursement rate. Using this model, resident classifications and anticipated resource needs are leveraged during the course of a patient’s stay.

PDPM will be used under the Skilled Nursing Facility (SNF) Prospective Payment System to classify patients effective October 1, 2019. Affected nurses should spend the next few months training and preparing for PDPM implementation.

PDPM is being implemented to address issues with RUG-IV. Under RUG-IV, therapy payments are based on the amount of therapy provided regardless of a patient’s unique condition. According to the CMS, PDPM will improve payments in several ways:

  • Reduction in administrative burden on healthcare providers
  • Improve accuracy and appropriateness by focusing on the patient
  • Improve SNF payments to underserved beneficiaries without increasing Medicare payments

Still have questions? The CMS has lots of educational resources explaining and pertaining to PDPM. Explore their resources today so you are best prepared this October.  

PDPM will impact therapists providing service to long term care patients in a variety of ways:

  1. Financially, this model is designed to be budget neutral. With some therapy dollars reallocated to nursing, SNFs will be able to offset the loss in therapy reimbursement with higher reimbursement for the nursing care that’s already being provided. Contract therapy providers will see a reduction in revenues however, because of the provisions that have been made under PDPM, it’s very possible to achieve neutral to positive profit margins, while increasing patient outcomes.
  2. RUG-IV incentivizes ultra-high volumes of therapy to capture the maximum payment whereas PDPM will require attention to patient classifications and careful management of how long term care providers, SNFs and therapists deliver services, focusing more on providing certain levels of care for individual residents.
  3. PDPM will more than likely cause a reduction in therapy minutes provided, creating less demand for therapists in the SNF setting. This will assuage the need to find and retain the best therapy resources.

With the upcoming October 1, 2019, implementation date, it’s important to outline a plan:

  1. First, focus on lowering costs by enabling therapists to provide more treatment to more patients.
  2. Second, focus on improving patient outcomes by establishing data-driven protocols.
  3. Third, augment revenue sources by identifying residents in your SNF who aren’t currently covered by Medicare Part A but would benefit from therapy services.
  4. Finally, optimize reimbursement by ensuring patients are classified correctly and that SNFs are reimbursed appropriately.

Over 65,000 long term care providers served more than 8.3 million people in the U.S. in 2016. Concordance Healthcare Solutions is proud of our history supporting the needs of long term care providers with quality medical products and solutions. As you prepare for and adjust to PDPM, Concordance can assist by providing high quality product options that result in better patient outcomes. Contact us to learn more.

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