The Patient Driven Payment Model (PDPM) is on its way—with an October 1st, 2019 implementation date—and we’re here to help you sort through the issues and succeed in this new world. This is the first in a series of articles about PDPM. We’ll provide you everything from background, insights from the experts at CMS, how-to guides, and more.
PDPM is a new, comprehensive reimbursement model for skilled nursing facilities (SNFs), replacing therapy minutes as the basis for payment with resident classifications and expected resource needs. PDPM consists of five case-mix-adjusted payment components:
At the same time, PDPM would maintain the existing non-case-mix components to cover utilization of skilled nursing facility resources that do not vary according to resident characteristics. Specifically, these resources involve:
Much like the current RUG-IV model, per-diem payment under PDPM will be determined by two primary factors: base rates that correspond to each component of payment and case mix indexes (CMIs) that correspond to each payment group. Each resident will be classified into a group for each of the five case-mix-adjusted components. The base rate for each component then is multiplied by the CMI corresponding to the assigned resident group.
When CMS introduced the concept of PDPM, the agency targeted fraud reduction as a selling point. In fact, the final rule pointed to “evidence of therapy being furnished to SNF patients on the basis of financial consideration rather than patient need.” For the most part, PDPM will eliminate fraud by linking therapy reimbursement to resident needs and not hours. As a result, more Medicare dollars are expected to go to higher-acuity patients with higher-level health needs.
It’s worth noting that PDPM requires 75% of all therapy to be individually provided; and concurrent and group therapies will be capped at 25% of the total minutes provided.
PDPM represents a further move away from volume- to value-based medicine; and it reinforces the need for “intelligent technology” as providers transition to true quality-driven care. In part, you are going to need:
While PDPM represents a significant payment system change, the good news is that you don’t have to face this alone or start from scratch. Be on the lookout for more in this series, and let us know how we can help.