Understanding the PDPM- Patient-Driven Payment Model
The US Centers for Medicare and Medicaid Services (CMS) have switched their Medicare payment rule for Skilled Nursing Facilities (SNF) from the Resource.
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Key takeaways
- This new model offers a brand-new method for evaluating reimbursement.
- The cutback in therapy minutes will result in a smaller demand for therapists, which could lessen the burden linked with recruitment and permitting their clients to retain their therapy resources.
- This system or systems like it can support your business by predicting future needs, help manage costs, and assist in customizing treatment protocols.
Introduction:
There are several companies in the United States that ‘provide cloud-based clinical, operational and billing solutions for contract therapy companies, skilled nursing facilities, assisted living facilities, outpatient therapy practices, and hospice organizations.? The US Centers for Medicare and Medicaid Services (CMS) have switched their Medicare payment rule for Skilled Nursing Facilities (SNF) from the Resource Utilization Groups Version IV (RUG-IV) to the Patient-Driven Payment Model (PDPM). This new model offers a brand-new method for evaluating reimbursement.
The PDPM is designed to address the issues of inappropriate financial incentives in the earlier method model that used the volume of services as a basis. The revised model is driven by the patient’s clinical characteristics instead of the number of therapy minutes provided.
How does it work?
The PDPM system aims to focus on individual patient’s clinical characteristics, needs, and goals to reduce the chances of a treatment plan that might compromise a patient’s care. This new model of payment will eliminate the connection between the volume of services provided (Number of therapy minutes and visits) and the reimbursement.
Payments will be based on the resident’s classification among five components: Occupational Therapy, Physical Therapy, Speech-Language Pathology, Nursing, and Non-therapy Ancillary (NTA) services, a category related to medical supplies and drugs. The residents are classified into a separate group for each case-mix adjusted components, and each component will have its own case-mix indexes. To account for changes in resource use during the patient’s stay, the variable per-diem payment will be adjusted based on three components (Physical Therapy, Occupational Therapy, and NTA). The full-diem rate for a resident will be calculated by adding together the adjusted variable per-diem payment and the unadjusted Speech-language Pathology and Nursing component rates.
The PDPM will also restrict the use of group and concurrent therapy by limiting these services to 25% of the resident’s total therapy minutes. The American Physical Therapy Association (APTA) has strict guidelines on when to mandate 25% group therapy in SNF’s.
Original diagram for Techfastly by Vin Patel.
How will it affect the therapy business?
The new PDPM system will change their client’s therapy business in three significant ways.
The first is care management; this change will now incentivize incredibly high volumes of therapy ’to capture the maximized payment.? In order to do that, the client company must carefully monitor the services they render because the over-delivery of services will not result in payment. Under delivery will be just as hazardous, potentially resulting in unhappy patients and possible Medicare audits or take-backs.
The second area is staffing. The cutback in therapy minutes will result in a smaller demand for therapists, which could lessen the burden linked with recruitment and permitting their clients to retain their therapy resources.
The last change is financial, PDPM is intended to be budget neutral since some therapy dollars can now be allocated to nursing, their clients can offset the loss in therapy reimbursement with higher reimbursement for the nursing care that’s already underway. The contact therapy clinics will surely see a reduction in the overall revenue.
Tips to succeed under PDPM:
These changes implemented in October 2019, and there will need to be some preparation to succeed under this new model. The first is that their clients must lower costs, generally through enabling the therapists to provide more treatment to more patients, which can be achieved through group or concurrent modes of treatment. The second is to improve patient outcomes. The patient outcome can be achieved by instituting data-driven protocols based on clinical evidence to offer then a care plan that considers the appropriate reimbursement level on a per-patient basis. The third is to change revenue sources. Their clients should scour their facilities and find residents who are not covered by Medicare Part A but would benefit from therapy services. Lastly, their clients must optimize past-due reimbursement. This step comes down to ensuring that their patients are correctly classified and that their facility and therapy provider are correctly reimbursed for each resident.
The PDPM system contains an electronic medical records software with advanced business intelligence and data analysis tools. This system or systems like it can support your business by predicting future needs, help manage costs, and assist in customizing treatment protocols.
Resources:
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?https://www.apt.org/uploadedFiles/APTAorg/Payment/Medicare/Coding_and_Billing/SNF/APTAHandout_PDPM.pdf
? https://www.optimahcs.com/resources/understanding-patient-driven-payment-model-ppm/
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