PDPM Will Dominate in 2019, But It’s Only One Piece of the Puzzle

Providers have a scant 11 months to prepare for the tectonic shift of the Patient-Driven Payment Model, but that’s only one of the regulatory and economic pressures they’ll face in 2019.

New requirements of participation, the local politics of Medicaid, and staffing shortages will continue to plague the skilled nursing industry over the coming 12 months. Still, Russ DePriest — senior vice president and general manager of skilled nursing at software provider PointClickCare — told SNN that there’s reasons for operators and investors to be optimistic as 2018 wraps and they look toward the busy year ahead.

SNN caught up with DePriest at PointClickCare’s annual summit, held this week in Nashville, Tenn.

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What are the biggest trends that skilled nursing providers are going to have to weather next year?

Clearly PDPM is, from our perspective, the biggest thing to deal with next year. It’s a small slice of the total patient population — it’s only Medicare A, it’s not the Advantage plans — but it’s a significantly larger slice of the revenue. 

It’s important to get that right. I think the other thing we’re seeing is occupancy challenges, as a either of a result of people being narrowed out of a network, or as a result of hospitals trying to discharge to lower-cost settings.

What’s the top thing that providers need to know about PDPM?

think they need to know that it changes a lot of things. It changes the way they need to think about therapy, and therapy’s role in their reimbursements. It means that they have to become experts in coding diagnosis information, because that’s a big chunk of their reimbursement pie.

What have you been hearing from clients about their internal PDPM outlooks?

I think people are optimistic. I think they say that they could potentially see upside, and I think the fact that it rewards — these are skilled nursing facilities, and it rewards nursing. From a colloquial point of view, that appeals to me. Based on this diagnosis, you’re going to need this much nursing care, so that’s going to impact your reimbursement rate. That feels right to me.

What about third-party therapy providers? Will we see more skilled operators bring those services in house?

Everything’s a sine wave, so if therapy’s completely outsourced now, it’s likely to be brought back in house. I don’t know what to think other than there will be big changes, and I think that the therapy companies are nervous. That’s the one thing that I hear. 

Last question: What are the areas that providers should focus on improving going into 2019?

I think top of the list is learning how to survive under PDPM. There’s no question about that: All the skills that are required to be proficient with PDPM, you need to be concerned about those.

I think you need to be concerned about the continued growth in Medicare Advantage plans and the erosion in revenue that has. I don’t know what you do about it — I don’t really have an answer for it, but I think it’s something you need to be concerned about.

And then the shorter lengths of stay, higher-acuity patients, and the strain that puts on staff. Staffing is a huge challenge, and not only is it hard to find people, but they have to work a lot harder, because they’re dealing with sicker patients, and there’s more turnover. When you have a lot of patient turnover, all the work happens at the front end of the stay. The first three days are where most of the work is. Staffing is a hug challenge.

PDPM, general financial health, and staffing health.

The other is managing litigation and regulatory risk. It’s off the charts. Litigation is growing year over year, the size of awards is growing year over year. So SNFs need to really make sure that they have their house in order so they don’t end up on the wrong end of too many lawsuits.

Full disclosure: PointClickCare invited a team from SNN’s parent company, Aging Media Network, to attend their annual conference and covered the cost of accommodations. The Mississauga, Ontario-based firm did not have any influence on SNN’s coverage.

Written by Alex Spanko 

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