John O’Connor

If it seems like a lot of skilled nursing facility therapists are suddenly getting laid off, it’s no coincidence.

Genesis Healthcare has grabbed an early lead in the pink slip parade. The firm just let go of about 600 rehab workers. Many other operators are considering similar moves. That is, if they haven’t done so already.

For this sudden talent purge, we can thank Medicare’s shiny new Patient Driven Payment Model, or PDPM. This revised patient classification system was designed to remove therapy minutes as a payment driver. And if the early returns are any indication, it is more than doing its job.

What many unfortunate therapists are now experiencing reminds me of a scene from the film “Casino.” Mob chieftains at a table are considering whether one of their own, Andy Stone, could become an informant. Three bosses jump to his defense. Then a fourth asks: “Look, why take a chance?” You can probably guess what happens next. 

To be clear, we are less than a week into PDPM. And there are many people far smarter than me who believe things will more or less stabilize with time.

I’m not dismissing that view. But let’s not forget that long-term care has a proven history of following the money. Or to be more exact, one of chasing new service options that enhance payments.

A quarter century ago, therapy was pretty much a non-factor in skilled care. What ushered it in? For the most part, an opportunity to tap into Medicare dollars by delivering covered services. Almost overnight, many facilities were transitioning from $100 to $150 daily Medicaid payments to the $400 to $600 Medicare could deliver.

The Medicare shift turned out to be good for business. Will therapist reductions have a similar legacy? I’d say it’s too early to tell.

But it’s becoming clear that a growing number of operators don’t want to take any chances. 

John O’Connor is Editorial Director for McKnight’s