Scrutiny About Behavior Changes Under PDPM Will ‘Inevitably’ Come to Skilled Nursing

The changes in Medicare reimbursement taking effect in October will mean upheaval in more places than a skilled nursing facility’s billing department. It will mean changes in the nuts-and-bolts processes of patient care, and SNFs need to be preparing for this reality — with the knowledge that regulators will be watching closely.

That’s according to Cindi Raymond, who recently joined Plante Moran as a principal in the consulting and accounting firm’s health care strategy and operations practice. In this role, she focuses on process and operational improvement, preparedness for the Patient-Driven Payment Model (PDPM), and strategic business planning. Before her most recent job move, she served as vice president of clinical operations and chief nursing officer at Livonia, Mich.-based Trinity Health Senior Communities.

Skilled Nursing News spoke with Raymond to talk about the coming changes and what they mean for SNF providers — as well as how nursing homes need to adapt their care to survive.


How prepared would you say providers are for the Patient-Driven Payment Model?

My sense of the readiness would be really similar to what I’m seeing here at Plante Moran, with my client base. It’s about half are making progress toward being prepared, and kind of the other half are saying: “We’re going to a lot of sessions, we’re learning information, but mostly what we’re hearing is: Get ready.” Now the questions are moving towards: “How do we get ready?”

So there’s still time, but not much, to prepare that readiness plan.

Can you talk about how the change in reimbursement will affect planning for skilled nursing businesses, and the nuts and bolts of what has to change with PDPM? I’m particularly curious just because Plante Moran recently did a data dive that showed Medicare was the smallest cash source for SNFs.

We know organizations that have been really successful with therapy utilization, high therapy utilization under the [Resource Utilization Group system] stand to really lose the most.


So people need to understand that about themselves. We do know about Medicare Advantage plans and managed care [are] not bound by that PDPM rate, and the high probability that those rates might continue to be based on a percentage of that Medicare standard amount. So there’s a chance of eroding revenues to cost.

When we think about the strategic planning that has to happen from an operational and clinical perspective: really understanding your current state, knowing the cost of care, all levels of care provisions. That’s where we’ve seen people really starting [to say] “What’s going to happen to us? This is what we currently look like in this RUG-based environment. If we were to convert this picture into a PDPM environment, what does that do to the bottom line?”

That then starts to drive the strategic planning steps, in terms of: “Well, what is our desired state? What market are we working in? What is our niche? How are we going to manage it all?” So right-sizing, mix of portfolio, and then really developing plans around that.

Those plans have to take into consideration that Medicare is one piece of the puzzle. But they need to think about managed care and [accountable care organizations], and work with bundled payment providers and even some of that managed Medicaid and join with some partnerships.

A change in thinking is really on that resource allocation that’s based on risk stratification, on that clinical picture and how we’re implementing pathways. So the strategies really have to be driven not only around the business model and operational outcomes from a revenue and income perspective, but how do we achieve that by implementing really sound, solid, evidence-based clinical practices.

When we really think about that decline in Medicare as that cash source, we’re already seeing 50% or less discharge coming from our referral sources or hospitals to SNFs. When we layer on top of that managed Medicaid, providers are really going to need to understand their market and how they’re going to capture these alternative sources, and be able to be successful in that, with the narrowing margins.

In terms of process and operational improvements, what are some common pain points for SNFs? How much are they determined by external factors such as state and managed care reimbursement?

From the clinical-operational perspective, almost exclusively the biggest pain point is that under PDPM, our processes are not therapy-driven. That means we now have this high need for education among clinicians around truly managing the care of persons from a population health perspective, and for nursing clinical leaders to understand this leadership role and how to pursue care management — and then finding these leaders.

Breaking that all down, every patient may need something different based on whether they’re in a high-risk population group, a moderate-risk population group, or a low-risk population group. That’s driven by their clinical needs, that primary diagnosis for ICD-10, and understanding how to weed out that clinical need and then implement and follow clinical pathways.

That, in many ways, is one of the biggest pain points, because it’s a shift in thinking. It’s a shift in persons coming into a skilled nursing environment needing therapy and therapy driving the plan of care — versus clinicians or nurses driving the plan of care through pathways based on diagnosis.

When it comes to the clinical side of PDPM, what do facilities have to do to set themselves up for success? The patient coming into SNF isn’t changing, but it sounds like what’s changing is the way you capture the condition of the patient.

SNFs need to really have coders or MDS [Minimum Data Set] coordinators. Oftentimes, they have to be adept at reading out the most appropriate ICD-10 and those comorbidities, and getting it coded on the MDS right the first time. And that ICD-10 and the primary comorbidities really need to drive the clinical pathways.

What they need to do is: They need to look at their standards of care, they need to work with their therapy leaders and say: “What does this mean in terms of when we approach certain care levels with each client that comes in?”

Often that’s based — again — on the risk. So you’re right in that the characteristics of the persons coming into our doors may not change a lot, but the care provision and what drives the processes does change, from the perspective of who’s driving the bus.

It’s very different when it’s a case manager driving it and saying: “This is an evidence-based pathway that tells us this is the best way to care for a person with these conditions and this is where therapy fits in,” versus a therapy-driven model that says: “This is what we’re doing from a therapy perspective and the other disciplines follow along with that.”

It’s basically ensuring care management oversight and really looking at their current practices and saying, “How does this impact?” We know what’s going to come out the other end of this is a very close scrutiny to changes in therapy utilization. [SNFs] really need to start preparing for those now and really need to be looking at running their processes through their quality assurance and process improvement committees to say, “We are doing an overview and a review of our pathways to make sure they align with evidence-based practice.”

And that will help them when those questions about why there was a change in practice come up. Because inevitably they will.

When it comes to therapy scrutiny and pathways, what should SNFs be monitoring so that they can translate what they’re doing now for PDPM — and ensure they aren’t hit with questions about a change in practice?

We need to be understanding our variances now. So we need to understand what we’re doing now. The provider needs to ask themselves: Can they track the residents where they are based on their primary clinical condition, their comorbidities? Do they know what the average length of stay is for someone with heart failure or respiratory and those major diagnostic categories? Do they know the demographics of that population? Do they know their mortality rate? Do they know the utilization of care at the SNF? Are they using home health agencies? Are [patients] going back to the ED? Are they getting observation stays? Is there connectivity with the primary care physician? They need to understand — by clinical category — how they’re doing now, and how these conditions are driving the care now.

So there’s twofold documentation. There’s the clinical record documentation that starts to clearly document based on built-in workflows by patient condition — so that it drives through the evidence-based practice and then allows for documentation on variances to the normal course of care, if you will.

And then there’s the documentation the organization needs to do within their quality assurance and process improvement committee, to show what they’re looking at, why they’re looking at it, and why they’re making changes to it.

How much of a shift would you say this is from the way SNFs tend to operate and gather data now?

If a SNF has not been heavily engaged with managed care contracts or the ACOs, or even in some of the bundled payment care initiatives, if they have not been strongly or acutely involved in those at a high level or at a granular level actually, then this would be a pretty significant shift. Traditionally, SNFs are much more therapy care path-driven, and not holistically care-path driven.

And what I mean by that is not that they don’t provide holistic care. What I mean by that is that case management, or care management, is seen as an approach that has the nurse leader that looks at all of the disciplines of care and says, “Based on this diagnostic condition or this clinical condition, the evidence shows the person is going to need heavy therapy.”

So take, for example, somebody in an orthopedic clinical condition: heavy therapy. But this person who has an exacerbation of their congestive heart failure and has complicating factors of the respiratory conditions and diabetes, is going to need heavier nursing as well as perhaps social services because of their social determinants of care. So it’s looking at driving the care through a different lens.

Not that each of the departments or care providers do anything drastically different in terms of the approach, but the approach is that it’s driven through a different lens: What does this person need based on this clinical condition and what the evidence shows?

More broadly, what other considerations do SNFs have on the clinical side, besides PDPM? Is there anything that’s being overlooked or missed?

Providers need to be asking their electronic medical records vendors for demos, questioning them about programming changes so we’re sure documentation is being captured — maybe what artificial intelligence drivers they have to be able to help the nurses at the bedside, to be able to point the care into the appropriate pathway based on the risk on day one. So risk assessment, and then driving through workflow based on key data triggers.

It can be a cumbersome and big piece of the puzzle, but these vendors are working very hard to make some differences, and I think providers need to be aware of that, because it could make their job easier.

I [also] think understanding the admission process — knowing your process from referral to admission to course of stay to discharge, and then really that 30-day post-hospital discharge period of time. So each provider is identifying what their pain points are, each provider is looking for opportunities for rapid improvement. And then they can start to prioritize the elements that need to be changed or improved.

The final thing I think we really need to be considering, that I don’t see a lot of conversation around is: What is the impact to the patient experience? So get ahead of the curve and measure the patient experience.

This interview has been condensed and edited for clarity.

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