Therapy Providers Agree: PDPM Improves Upon Old Payment Models

A new survey of therapy providers found broad support for the new Patient Driven Payment Model (PDPM), with respondents citing it as an improvement over the Centers for Medicare & Medicaid Services’ (CMS) earlier attempts at payment reform.

Specifically, the new survey of 134 therapy professionals — including a mix of contract therapy providers and skilled nursing facilities — showed that  67% believe PDPM is an improvement over the Resident Classification System, Version I (RCS-I). The same portion of respondents also said that the proposed implementation date of October 2019, or the start of the government’s fiscal 2020, will provide them sufficient time to prepare for the changes.

Optima Healthcare Solutions conducted the survey.


Reimbursement tied to outcomes

Most providers also expect that PDPM will eventually link reimbursements to patient outcomes. Though currently the new prospective payment system sets rates according to the patient’s condition and its complexity, there are some reasons to expect that PDPM will make this connection, Optima CEO Josh Pickus told Skilled Nursing News.

First and perhaps foremost, Section D of the executive summary in the PDPM rule specifically focuses on improving patient outcomes through CMS’ Meaningful Measures Initiative, Pickus said.


“It is very clear in that summary, in that particular section … that they are very focused on driving towards a situation where outcomes are the most important thing,” he said. “They highlight in the executive summary, in Section D, the absolute paramount importance of outcomes.”

The Meaningful Measures Initiative, which was launched in October 2017, is itself another indicator that outcomes are a key priority, Pickus added. The initiative focuses on identifying measures for quantifying quality care. Though that’s not openly connected to reimbursements, the Skilled Nursing Facility Value-Based Purchasing (SNF VBP) programs represent an explicit link of “pluses and minuses to reimbursement,” according to Pickus.

“All three of those things, the summary, the Meaningful Measures Initiative, and the SNF VBP program are evidence that outcomes are paramount, and outcomes are going to be increasingly linked to reimbursement,” he said.

Though 96% of survey respondents believe PDPM will eventually tie reimbursement to patient outcomes, there was less consensus on when this would occur. Most respondents, or 61% of them, predicted it would happen within the next two years, during fiscal year 2021 or 2022; 18% predicted it would not happen within the next three years, and 17% predicted it would happen in the final rule for FY 2020.

Section GG wins out

In addition, 85% of respondents believed that CMS would use Section GG data to establish an outcomes-based model of reimbursement. Section GG, which is a series of items focused on functional scores linked to self-care and mobility, was introduced in 2016 and is required for SNFs. But Section GG made it less clear whether CMS intended to use these measures or another set of measurements called CARE.

PDPM clearly establishes the use of Section GG data, an indicator that this is the direction CMS will take when mulling payments for quality performance, Pickus told SNN.

“We’re seeing a lot of interest in our client base in not just reporting on GG in the specific regulatory required periods, but using it for the therapy company’s own internal assessments for how well they’re doing,” he noted. “It’s beginning to take on a life of its own. It’s not just that it’s required in PDPM. Because it’s got that stamp of approval, it will be more broadly used by therapy companies.”

What’s next

It’s not clear yet how an outcomes-based payments system would be implemented or when it could become reality. But there are some specific trends therapy providers should be keeping an eye on, Pickus said.

“Generally, they should be looking not just at therapy reimbursement; they should be looking across the spectrum, at home health and hospice, at urgent care and hospitals, and looking for evidence that the number and breadth of payments that pay based on value … are those increasing?” he said. “Because if you just look at therapy, you may well miss the bigger picture.”

Another bellwether is the growth of Medicare Advantage plans, Pickus said. Though they differ from the traditional Medicare program, they select and pay providers based on outcomes, and some providers have specifically cited experience with Medicare Advantage as a reason they’re confident about PDPM.

“It’s going to become vital that therapy providers are able to demonstrate specific functional improvements in a time-based fashion,” Pickus said. “They’re going to rise or they’re going to fall based on … in 16.2 days, we can improve mobility by X percent. That’s how competition in the space is going to operate.”

Written by Maggie Flynn

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