‘Unreasonable’ to Think Therapy Patterns Won’t Change Under PDPM

Though experts and federal authorities alike stress that the coming change to Medicare reimbursement shouldn’t affect the levels of rehabilitation provided to skilled nursing patients, the reality is that therapy is likely to evolve.

That makes it all the more important for operator to clearly tie any changes in therapy provision to clinical needs and patient outcomes, according to a webinar hosted late last month by the Minneapolis-based consulting and management firm Health Dimensions Group.

“We believe that there will be an evolution in practice for therapy,” Michelle Kastenholz, director of therapy reimbursement and consulting at HDG, said on the webinar. “It happened under RUGs. With [the prospective payment system], we were incentivized to adapt to the payment structure.”


The Centers for Medicare & Medicaid Services (CMS) will be monitoring therapy and rehabilitation levels under the new Patient-Driven Payment Model (PDPM), which will replace the existing Resource Utilization Group (RUG) system on October 1.

During a December presentation from CMS officials, the agency emphasized that they would be closely watching therapy levels — as well as changes in the patient population — even before PDPM is officially launched. Unlike in the past, when CMS was primarily concerned with over-provision of therapy, the danger now lies in providing too little, as rehab shifts from a revenue generator to a potential cost center.

“We do plan on monitoring that and seeing how much of a change occurs, along with changes in the patient population,” a CMS spokesman said at the time.


But because minutes will no longer drive reimbursement under PDPM, therapy will become part of the bigger picture of a patient’s condition, Kastenholz explained — and naturally lead to potential changes in care.

“In the last several years for sure, CMS, MedPAC and [the Office of Inspector General] have really repeatedly said that therapy minutes tend to cluster around those payment thresholds … and they feel like that is indicative of delivery based on reimbursement rather than patient needs,” she said on the webinar. “So PDPM is really going to change that.”

Therapy still vital

But that doesn’t mean SNFs can slack off on providing therapy. For one, the SNF post-acute market is based on therapy needs, Kastenholz said, and the acute market will not provide enough therapy for patients to reach successful discharge home.

One interesting wrinkle under PDPM is that there are generally higher payment levels in the physical and occupational therapy components for patients who are more independent, Kastenholz noted. And while that makes sense from the standpoint of patient care, it’s “the opposite of where RUGs are,” she said on the webinar.

Capturing patient conditions for PT, OT, and speech and language pathology (SLP) is going to be essential because of the impact they can have on rates — and for the speech/language rate, the impact will be particularly drastic. After a hypothetical 72-hour meeting in which an additional comorbidity and mechanically altered diet were identified, the case-mix index (CMI) rate jumped from $15.06 a day to $63.13 a day, according to an HDG case study.

“This case really reinforces the necessity of capturing all of the comorbidities and patient characteristics,” Brian Ellsworth, HDG’s vice president of public policy and payment transformation, said.

Kastenholz agreed, noting that under the RUG system, it’s just not as necessary to focus on those components.

“We’re just taking credit for the work we’re doing,” she said. “This is not changing anything, this is not putting something in that doesn’t exist … we are not asking for something that we don’t deserve, but we really need to make sure that we’re capturing everything possible.”

Precedent for change

Amid the many questions about how much therapy is going to change with the coming of PDPM, both Kastenholz and Ellsworth emphasized that there have been shifts in therapy patterns in the past when payment structures evolved.

“We believe that it is unreasonable to expect no change under PDPM,” Kastenholz said. “But a key takeaway is that all this evolution needs to be tied to clinically appropriate interventions and outcomes that come from all therapy treatment provided.”

In particular, Ellsworth noted the growth of therapy under RUGs earlier in the decade: Utilization in the “Rehab Ultra” category grew by more than 30% in three years as policies regarding payment changed.

“It’s a fairly significant change in a three-year period of time,” Ellsworth said. “What can grow that fast can ungrow.”