After much hype, trepidation and, for some providers, feverish planning, the Patient Driven Payment Model (PDPM) took effect in October.
There has been much speculation about how the new system, considered the biggest change for nursing homes since the onset of the Prospective Payment System in 1998, is working, who it is hurting and helping and, ultimately, what the impact is on residents.
Five months into the program, most consultants and industry leaders were still hesitant to draw conclusions about its success, as of press time. They’re interested in concrete data.
But they have identified unmistakable signs of success for the nascent program, as well as areas of improvement for providers going forward.
They also offered plenty of educated guesses on how the Centers for Medicare & Medicaid Services might tweak the program in the days and months ahead.
What’s to come
One of the biggest questions in the first quarter of 2020 is what will CMS do next? The agency aimed for the program to be budget-neutral. If providers end up billing more than CMS anticipated, then a rate recalibration could be in order.
The agency has turned its razor-sharp gaze to how much therapy providers are giving under the new system.
“CMS is monitoring the implementation of the PDPM, including the therapy service provision, as compared to RUG-IV, at the national, regional, state and facility level,” an agency spokeswoman said. “Significant changes in the amount of therapy provided to SNF patients/residents under PDPM, as compared to RUG-IV, or the manner in which it is delivered, may trigger additional program reviews and potential policy changes.”
CMS already has given providers a head start on what is to come with its first draft of the 2020 MDS item sets released at the end of 2019. In this draft, it eliminated Section G of the MDS, which essentially is a duplicate of the newer Section GG. Both measure the functional abilities of the resident, specifically in the areas of self-care and mobility. The draft is set to become effective Oct. 1, 2020.
“They gave us a heads-up with a lot of lead time,” said Cynthia Morton, executive vice president of the National Association for the Support of Long-Term Care. “It was a little bit of a gift that they went and signaled that.”
Experts anticipate other tweaks to the program, such as fixing some gaps between ICD-10 and PDPM language.
‘Most important data set’
Beyond regulatory changes, leaders in the industry were waiting for other types of information to gauge the new program: earnings reports from publicly traded companies and patient outcome data. The latter will reveal how successful the program really is, they say.
“That’s the most important data set,” said Mark Parkinson, president and CEO of the American Health Care Association, who has praised CMS for the policy underpinnings of PDPM and the rollout. “If CMS needs to make changes on the revenue or other side, we’ve got to have patient outcome data to know what the logical changes will be. We’re going to have to be patient.”
Morton agreed: “What’s most important to me is how the patients are faring under PDPM. Let’s keep the patient foremost here. That’s really why we changed to PDPM.”
A new world order
PDPM, which replaces the RUG-IV case-mix classification system, not only has offered a different payment system for nursing homes regarding Medicare Part A residents but also has ushered in a new approach to residents’ clinical needs. The old system tied therapy volume to payment, incentivizing providers to provide as much therapy as possible. The new system throws out the volume threshold and instead links payment to specific patient characteristics, elevating nursing to a new level. It also calls for fewer resident assessments in an effort to decrease the administrative burden on nursing homes.
Education has been the key to success under this new model, experts maintained. “I certainly think the folks who were able to think through training, education and operational workflow within their organization are well-prepared,” noted Tim Ashe, chief clinical officer of WellSky, a post-acute and community care technology company based in Overland Park, KS.
This new worldview represents the continued push by CMS toward a holistic, versus a siloed, approach to care, according to Renee Kinder, MS, CCC-SLP, RAC-CT, vice president of clinical services for Broad River Rehab, Asheville, NC. Those facilities that adapted to this perspective have adjusted better to PDPM, she said.
“It moves to a payment system that looks at the person or beneficiary and their clinical presentation,” she said. “It’s been an overarching cultural change.”
NASL’s Morton echoed that idea. “Therapy and nursing have to further work together and talk to each other,” she said.
Prior to PDPM, the two clinical areas were separate domains. “Nursing has had to step up a little bit under PDPM,” she noted. “There is more ability to skill the patient from a nursing point of view.”
The move to PDPM has been a learning curve for many providers, asserted Ron Orth, RN, CMAC, CHC, post-acute care curriculum designer for Relias, a healthcare education firm. Specifically, people are having a hard time adapting from the RUG rules, which were the law of the land for more than 20 years.
Among the major adjustments under PDPM: fewer resident assessments. “I think people struggle [with the fact] that the IPA [interim payment assessment] is an optional assessment,” he said. “They are so used to doing an assessment when there is a change in therapy. It’s like, no, you don’t have to schedule an IPA. You may just do one assessment for your entire stay, and that’s OK.”
The new system is an improvement over RUG-IV because it puts the resident, versus therapy, back at the focus of reimbursement, Orth observed. Under the old system, two residents who came in with hip fractures might qualify a facility for the same reimbursement. Not so under PDPM, which looks at more clinical factors about these two residents and how a facility may be expending more resources on one resident compared to the other based on these clinical factors.
“This is the beauty of this new payment system,” he said. “It really does take into account resident characteristics that increase resource consumptions.”
As a result, an understanding of the resident’s clinical profile is imperative from a reimbursement perspective.
“Facilities that will fare better under the new system are getting all the appropriate documentation from the hospital or even from the primary care provider, as far as what are all the medical conditions that his resident has,” Orth said. “What has their history been? Those comorbidities can certainly lead to better NTA [non-therapy ancillary] scores, which equate to higher reimbursement.”
Zimmet Healthcare Services Group, a consulting firm for post-acute providers, was set to release its second analysis about PDPM as of press time. In its first analysis, released in November, it found that providers on the whole were collecting slightly higher reimbursements under the new system.
But it also pointed out some areas where providers were missing out on reimbursements. Among them: accurately coding for swallowing disorders, shortness of breath, lying-flat assessments for COPD patients, and one-time revenue codes associated with NTA drivers. Another area where some facilities lost dollars, at least in October, was in coding for depression.
Therapy in the spotlight
One of the major stories generated from the new payment model is CMS’s new treatment of therapy and therapists. CMS has granted providers increased clinical freedom around modes of treatment to increase efficiencies and reduce staffing. Because providers were planning to implement more group and concurrent therapy versus individualized therapy, word of therapist layoffs reverberated across the field. Genesis HealthCare, one of the country’s largest nursing home chains, confirmed that it eliminated 499 positions — not 585, as it initially said.
While the extent of the layoffs is still unclear, Morton, who believes some of the news reports regarding layoffs are exaggerated, argued that rehab is still an essential part of getting a resident well — and CMS knows that, too.
“Some of the CMS policy seemed to de-emphasize [individualized] therapy and more opportunity to provide group and concurrent therapy … but at the same time, CMS made it very clear that if a patient needed so many minutes under RUGs, CMS expected the same amount of care to be provided under PDPM and quality measures,” Morton said.