Aegis CEO: Therapy Can Still Drive Skilled Nursing Revenue Under PDPM

The new Medicare payment model for skilled nursing facilities upends the old system of rehabilitation minutes driving reimbursement.

With the Patient-Driven Payment Model (PDPM) scheduled for implementation on Oct. 1, 2019 by the Centers for Medicare & Medicaid Services (CMS), SNFs and therapy providers alike are scrambling to catch up and prepare. In this changing landscape, Martha Schram, president and CEO of Aegis Therapies, is tasked with making sure care and service providers of all stripes are prepared.

She was recently elected president of the National Association for the Support of Long-Term Care, a trade association for providers of services ranging from therapy to health care information technology. Aegis provides services in approximately 600 SNFs, with more than 3,000 therapists in various facilities.


Skilled Nursing News caught up with Schram to talk about the role of therapy in PDPM and the NASL’s long- and near-term priorities in the rapidly changing skilled nursing landscape — and why providers may be foolish to look at therapy purely as a cost center.

First, congratulations on your appointment as president of NASL. Given the range of providers in the association, what are some of its immediate policy priorities as we head into 2019?

It certainly will not be a dull two years. What’s really first and foremost on our agenda is making sure that our advocacy, education, and activities surrounding the march towards the implementation of PDPM and PDGM [the Patient-Driven Groupings Model for home health providers] are successful. We have a lot of prongs to this initiative to make sure we’re articulating the value of rehab and to make sure that we talk about the value of rehab — certainly in the context of PDPM and PDGM because that’s on everybody’s mind — but not to forget or under-emphasize the value of rehab as it relates to value-based purchasing and quality reporting.


There are some additional IMPACT Act quality measures that launched October 1 of this year, and [we’re] making sure that we are advocating and supporting that implementation in the industry.

And back to PDPM, there are still some open-ended items that we want to be in dialogue with specifically CMS around:

  • Broadly, that includes some clarification around concurrent/group, especially as it relates to the use of students and how that intersects with the group and concurrent therapy limits.
  • As you know, there’s not a lot of detail around the interim payment assessment, so we’ll be continuing to work on that front.
  • In the broad realm of medical review: What is that going to look like? There’s not a default category right now. There’s just not a lot of detail. So we’ll be hoping to have dialogue with CMS around that.

So lots around PDPM from both a standpoint of clarification, as we have conversations with the CMS team, and then broadly, from an industry perspective, making sure that there is consistent, accurate, and strong communication and clarification with regards to the value of rehab.

What are the adjustments that therapy and rehab providers will have to make for PDPM? What are they going to have to do differently?

Well, some of the things that they weren’t doing before, of course, revolve around the mode of delivery, right? So while there was an opportunity to do group [therapy] in the old payment model, it was burdensome and difficult and it just wasn’t practical. So adjusting for that — and that is on the therapy providers to determine what types of patients and how that all gets put into place — involves another level of collaboration with the provider in terms of agreeing on that.

Then scheduling: It’s going to require a lot more collaborative effort. Then the appropriate communications to families and patients about what to expect with regards to the service delivery that they’re going to be experiencing. There’s a lot of collaboration that’s going to have to occur around classification, [or] profiling the patient.

It’s not just therapy anymore, so [they] really need to bring into the fold — and this is good for the patient — that increased collaborative effort between rehab and the facility. Whether or not you’re in-house or outsourced, that level is going to need to go up.

Under PDPM, how will outsourced therapy providers need to change their approach to SNFs and how they talk to them?

I don’t know if it’s a change, but it really gets back to really being able to articulate the value of rehab that is backed with a lot of clinical support, regulatory support. And the stakes are higher now in terms of what happens if you fail or are noncompliant on the quality reporting or value-based purchasing. It’s going to affect your reimbursement in a very real way.

The conversations are the same, again, whether you have in-house rehab or outsourced, but the resources required for the oversight or some of those considerations may be different, depending on the provider and what they have.

Are there particular areas of therapy that will see a change or be affected more than others in this new payment model?

Certainly what everybody’s noticing is that speech has its own [case mix index], as does [occupational therapy] and [physical therapy]. The degree of accuracy and skill in coding — and of course the specifics, which are different for PT, OT and speech — certainly need to be paid attention to, to make sure everybody understands and consistently applies them.

But I think in terms of actual therapy or programs, what I would say about that is again, collaboration with the facility. A lot of the facilities are working through: Am I going to have the same profile of individual being admitted? Part A patients being admitted? Should I think about being attractive to a different profile [of patient]? What are my competencies?

It’s really important as part of the preparation process, as facilities work through those questions, [that] those same questions are applied to rehab. What are the special competencies, or clinical programs, or pathways that are going to be aligned with whatever those strategic decisions are from the provider? Competency is going to be more important than it’s ever been, both for nursing staff and for rehab staff.

What is NASL doing for its members to prepare for the change?

There is ongoing clarification, explanation with regards to all points major and fine in the final rule. We always offer a series of webinars [with] both our NASL staff and other experts that we make available to our membership. We’re also just formulating our list of topics that we’d like to explore further with various individuals and various groups over at CMS on behalf of the questions that we’re getting from our membership.

What are some of those questions?

Again, the use of students and how that’s going to impact potentially group and concurrent limits. It’s just not clear. What we’re trying to do is pull together some specific examples from our membership, so that when we’re having these discussions, we can be very specific. So we’re gathering those now, getting much more detail. And the interim payment assessment, because there’s not a lot of clarity around that.

[Then] transition questions, we’re gathering those from membership, and we’ll bring those forward. On September 30, there will be patients who are classified in the RUG-IV system right? On October 1, they’ll be PDPM. We’re beginning to get some clarity, but we want to just validate things like: What’s required at that point? [What] if they started in RUGs and end in PDPM from a billing perspective? There’s just a lot of those sort of tactical logistics questions.

What would you want to make sure SNFs know about the value of rehab, as we go into a new system where it no longer drives reimbursement?

It’s important to remember that we all have accountability for being part of the solution to the triple aim of health care, so that’s sort of the level set. I think the danger in seeing therapy as a cost center is that that usually leads to an analysis of: How do I cut costs?

Clearly there’s a mandate for therapy to be delivered efficiently. Certainly it’s not directly potentially driving the revenues it used to be, but it has tremendous impact on value-based purchasing. It has a tremendous impact on how a particular provider’s facility is seen by the consumer, through Nursing Home Compare and the functional measures that are now very public.

At the end of the day, I think we have to remember consumers are going to drive some of the success. If they have needs for rehab and they’re not getting those needs met, that will be a revenue problem, actually for a facility. Everybody has to be mindful of costs, but I think it’s a mistake to represent therapy now as just another cost. It can really facilitate and create a magnet for referrals, which certainly [affects] revenue in a major way or has the opposite effect.

This interview has been condensed and edited.

Written by Maggie Flynn

Companies featured in this article: