Treating Depression Could Emerge as a PDPM ‘Linchpin’ — Both for Payments and Better Outcomes

Accurately diagnosing and treating depression could bring significant rewards for operators under the new Medicare payment model for nursing homes — both financially and clinically.

Training frontline caregivers to notice the signs of depression among residents of skilled nursing facilities will be vital to success under the coming Patient-Driven Payment Model (PDPM), according to Zimmet Healthcare Services Group chief innovation officer Steven Littlehale.

“Depression is a linchpin to PDPM success,” Littlehale said during a Wednesday presentation at the consulting firm’s annual conference in Atlantic City, N.J.


The new payment model, set to take effect when the federal government’s fiscal calendar resets on October 1, will reward operators for treating each resident’s specific needs, with payments generally increasing based on patient acuity. The seismic shift marks an attempt by the Centers for Medicare & Medicaid (CMS) to move financial incentives away from therapy minutes and toward patient-centered care, and has created a whole host of diagnoses and treatments that are suddenly drivers of payment dollars.

Depression represents one of these newly reimbursement-sensitive conditions. Under PDPM, providers can see a payment boost of about $43 per day for treating depression as part of a resident’s overall care plan, bringing a total of around $870 in additional income over a 20-day stay, Littlehale said.

But for a variety of reasons, skilled nursing providers haven’t necessarily been proactive about identifying depression in residents up until this point — making the upcoming financial benefit a potential trigger to improve both diagnosis and care.


“Frankly, the stigma of accepting the fact that you’re depressed and talking about it in our society — it’s not something that we readily do,” Littlehale said.

Currently, only about 4.9% of nursing home residents have a diagnosis of depression on the Minimum Data Set, compared to academic studies that have pegged its prevalence among elders in the post-acute setting at up to 42%, according to Littlehale.

Part of that disconnect has to do with the gap in training between the typical nursing home frontline caregiver and the highly educated nurse teams that conduct on-the-ground studies: Nurses who work in academia generally have more experience and insight when diagnosing depression than a certified nursing assistant or other employees. As a result, Littlehale suggested that providers would be wise to send nurse leaders to conferences and educational sessions about identifying depression, while also contracting with mental and behavioral health experts.

“It’s important to invest,” he said.

In addition to the specific PDPM reimbursement gains, the proper treatment of depression can bring positive trickle-down effects to other high-visibility nursing home metrics. Residents with depression typically have longer lengths of stay, as they require more attention and recuperation time before they can return home. Treating this mental health issue thus becomes a potential bulwark against declining lengths of stay, driven both by Medicare Advantage plans and other alternative payment models.

What’s more, improperly treated depression has been linked to a higher risk of rehospitalizations, a metric that CMS has sought to tamp down under the SNF Value-Based Purchasing program, as well as an increase in opportunistic infections. These butterfly effects can also reach into the new Non-Therapy Ancillary (NTA) reimbursement category for PDPM, Littlehale said, resulting in another opportunity to receive proper reimbursements for the care that operators provide.

“Think about your NTAs, and look at what you’re identifying, and ask yourself: In those NTAs, what is the association between those conditions and diseases and depression?” he said.

All that said, Littlehale emphasized that operators shouldn’t just look at depression or other reimbursement-sensitive diagnoses as an ATM. CMS increased payments for a clear reason: Caring for patients with multiple complex conditions costs money.

“If you’re hearing: ‘Capture depression, you’re going to get reimbursed more’ — it is to pay for the care that will cost you more to deliver,” he said. “Make no mistake that this is a well-thought-out system.”

The same theory applies to cognitive impairments, another widely underreported condition on the MDS. Operators could lose up to $21 per day if their staffs fail to identify cognitive impairments, while also missing out on the potential to boost lengths of stay and avoid costly rehospitalizations. But again, that extra cash needs to be dedicated to direct resident care needs — and CMS will be watching to ensure that these conditions don’t simply become pure reimbursement drivers.

“All of these things are not just funky insights that we discovered when we popped the hood on PDPM and looked into it,” Littlehale said. “It’s actually well-substantiated on how much it costs to care for elders in our long-term care facilities.”

As a result, any efforts to change diagnosis patterns and treatment should be considered a benefit to both resident outcomes and a facility’s bottom line.

“Capture, identify, and treat depression — it’s now a reimbursable value, and it’s a clinical imperative,” he said.

Companies featured in this article: