Q: With potential for reduction in RUGs payment, how can a facility maintain financial solvency?

A: Look at managing Per Patient Day (PPD) costs for labor. Although many facilities watch their staffing hours on a routine basis, a fair number still manage by Full Time Equivalents (FTEs). In today’s environment of struggling census numbers and tighter budgets, PPD management has become a necessity.

The formula for PPDs is Budgeted PPD x census = number of hours available. So if your facility has 100 residents and your PPD for CNAs is 2.50, then you would have 250 hours of CNA time available. If each CNA worked an eight-hour shift, you could have 31.25 CNAs for that day.

I suggest every department monitor PPDs for its department on a daily basis with the intent of maintaining the budget over the pay period. In other words, you may be up a bit one day, but you can adjust on another day.

A question that is often asked is how you can do PPD management for a department of one. If you do it over the pay period, it’s rather easy. Have your manager (e.g. Social Service Director) monitor PPDs on a daily basis. By the beginning of week two of the pay period, that person might have to adjust his or her hours by a partial day, or maybe by decreasing hours by one hour a day. Whatever works for that employee and does not negatively impact patient care should be fine.

Another comment frequently heard is that you will lose staff if you cut hours. I haven’t seen this, and in fact, if you ask your staff to monitor the PPDs and allow them to adjust, you will find they do a pretty good job of it. It could be that a mother has a program at her child’s school she wants to attend, or that someone wants to watch the opening day of football.

Employees take pride in what they do, so use that to be successful.

Please send your payment-related questions to Patricia Boyer at [email protected].