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Many skilled nursing operators are not prepared for the industry’s upcoming payment model switch, but a new analysis shares some key tips to close that knowledge gap.

Accounting and consulting firm Plante Moran recently released its second annual SNF benchmarking report, compiled using data from more than 12,000 providers. The analysis notes that “transition continues to be the theme” for nursing facilities in 2019.

It highlights three key attributes for successful SNFs in a time of upheaval: (1) labor models that allow providers to quickly respond to changes in occupancy, as census volatility will continue; (2) cost-effective management of each episode of care; and (3) being ready for the new Patient-Driven Payment Model’s arrival in October.

Betsy Rust, a partner with Plante Moran and author of the report, said most nursing homes are not as prepared as they should be for No. 3 on the list.

“I don’t think they are,” she told McKnight’s. “To be ready for PDPM, our industry needs to get a lot more focused on assessing the resident from an ICD-10 coding perspective, rather than the lens of how we’re paid for under RUGs methodology. I’m not so sure the average skilled nursing facility is ready to do that, today.”

“Secondarily, the rate tapering methodology in PDPM really forces providers to manage length of stay better, and to be thinking about how to effectively discharge a resident at the right time, where it makes sense for them to go home,” she added. “We have not had a lot of practice managing length of stay.”

The 32-page report further explores managed care considerations, occupancy and payer mix, department costs per day, staffing levels and Medicare profitability. It notes that the number of beneficiaries in Medicare Advantage plans has tripled since 2004. However, adding another wrinkle into the mix, Rust said some private plans may opt not to use the PDPM methodology. That underlines the need for providers to stay contact with insurers in the coming months, she told McKnight’s.

“A large number of them may decline to adopt the PDPM methodology and utilize their own approach to establish contract payment terms for their networks,” Rust said. “So, I think providers will need to be prepared for that and at the same time will need to be reaching out to representatives at their payers to inquire about their plans.”