PDPM Success Rests on Taking Credit for Existing Skilled Nursing Services

As skilled nursing operators scramble to adapt to a new Medicare reimbursement model ahead of its implementation next fall, the secret to success could lie in taking credit for the services most SNFs already provide.

At Zimmet Healthcare Services Group’s annual conference in Atlantic City, N.J. last week, multiple speakers emphasized the importance of identifying new “reimbursement-sensitive” services — specific actions for which Medicare will pay — under the new Patient-Driven Payment Model. And many of those services are right under most providers’ noses.

“It’s not a question of taking more medically complex patients,” Marc Zimmet, president of the Morganville, N.J.-based consulting firm, said during the conference. “It’s about taking credit for the acuities that we have in-house and not relying on therapy to justify skilled coverage.”


The PDPM, set to take effect in October 2019, will shift financial incentives toward the treatment of higher-acuity residents, while removing the current emphasis on sheer volume of therapy hours — a move that the Centers for Medicare & Medicaid Services believes will cut fraud while also improving patient outcomes.

While some leading experts have suggested that SNF providers must now be proactive in seeking out the kinds of hospital partnerships that will bring more medically complex residents through their doors, Zimmet’s philosophy focused more on the patients that SNFs already treat.

Michael Sciacca, Zimmet Healthcare’s chief operating officer and a licensed physical therapist, positioned the new payment structure as a way for providers to finally receive fair compensation for the services they provided in the past without an explicit Medicare reimbursement benefit.


He gave the example of a joint replacement resident for which a building might be reimbursed at $700 per day under the old Resource Utilization Group (RUG) system due to high therapy volume, making that relatively low-acuity patient far more attractive than an end-stage renal failure patient who required IV services and other treatments that did not increase a SNF’s ultimate payment.

“That’s what was broken with the old system,” Sciacca said. “It incentivized the volume, and it didn’t adequately pay you guys for taking care of people.”

Under the new system, by comparison, SNFs have the opportunity to bring in dollars for a variety of existing services, provided they capture them accurately. For instance, speech therapy services can generate a $40- to $50-per-day benefit for buildings, while other routine services — including treatment of clinically complex pneumonia, Parkinson’s disease, and morbid obesity — will suddenly generate additional reimbursements.

But it’s also important for administrators to develop plans that drill the importance of correctly tracking and recording these services into the minds of therapists, nurses, and other caregivers. In another example, Sciacca noted that different treatments for patients with syphilis fall under vastly different billing codes, with a direct impact on an individual SNF’s bottom line.

“As gross as it may be, it’s a $30 per day mistake,” Sciacca said.

The overarching goal, according to Sciacca, will be a return to emphasizing the kinds of complex and comprehensive care that skilled nursing facilities have always provided — without the safety net of being able to bill for significant therapy hours.

“We still need to justify daily skilled care. The benefit is still there. You still have an obligation to demonstrate and support daily skilled care. That does not change under this system,” Sciacca said. “So if you do not give therapy — if a new admission does not get therapy — they have to be covered for the Medicare benefit for nursing.”

Written by Alex Spanko

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