Skilled Nursing Industry Must Respond Quickly to Survive Under PDPM

With a little over a year to go before the skilled nursing industry must adapt to a new payment model, smart providers are poised to take advantage — and one expert says it’s time to begin preparing now in order to achieve the most benefits.

“SNF operators are optimistic, and I think you should be,” Marc Zimmet, president of Zimmet Healthcare Services Group, said during his company’s annual conference in Atlantic City, N.J. on Wednesday. “If you know what you’re doing, get in early. It could be a big positive.”

In short, the new Patient-Driven Payment Model (PDPM) for skilled nursing facilities will shift reimbursement incentives away from the volume of therapy provided, and toward the acuity of the residents that a typical skilled nursing facility serves. First introduced in April and finalized late last month, the PDPM is slated to come to skilled nursing facilities starting on October 1, 2019, a date that Zimmet said he had “very high confidence” will not be pushed back.


Despite some industry worries about certain aspects of the plan, Zimmet emphasized that because the Centers for Medicare & Medicaid Services (CMS) designed the PDPM to be budget-neutral, overall Medicare reimbursements won’t go down — it’s just up to providers to adjust their strategies accordingly, and in enough time to take advantage of the shifts.

“We’re not looking at a phase-in. We’re looking at a full-blown change,” Zimmet said.

For instance, SNF operators might think that it’s time to start ignoring regular therapy services entirely, and instead focus on landing the highest-acuity patients possible. But Zimmet noted that most residents in a skilled nursing facility already require significant levels of care simply by virtue of having been sent there from a hospital or other referral source. Instead, providers should focus on extensively documenting the ways they treat these patients through detailed nursing notes and supporting paperwork.


“It’s not a question of taking more medically complex patients,” he said. “It’s about taking credit for the acuities that we have in house and not relying on therapy to justify skilled coverage.”

Another PDPM myth, in Zimmet’s view, was the idea that CMS wants to reduce lengths of stay through the new payment structure. While per-day reimbursement rates will decrease the longer a skilled nursing resident stays in a SNF, the same was true under the old system — and the effect might actually be less strong under PDPM, Zimmet said.

Budget-neutral — but for how long?

Zimmet warned that while PDPM remains budget-neutral for the near term, that commitment to steady funding isn’t guaranteed.

“So we’re going to have quite possibly an increase, and if you don’t get on top of it, and there is an across-the-board cut, you’ll wind up below where you are now,” he said. “But, theoretically, the same money’s there.”

Still, he noted that providers have all the tools for success under the new system — as long as they choose to use them in time.

“It is not a funding reduction. It is a change in the revenue delivery system. So in terms of not wanting to deal with the change, I get it,” Zimmet said. “Who wants to deal with [it]? …  But in terms of the ultimate impact, you shouldn’t be scared. We’re not worried about it.”

Written by Alex Spanko

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