The long wait is over: The new Medicare payment system for nursing homes has arrived.
October 1 marks the official start of the Patient-Driven Payment Model (PDPM), just about 18 months after the federal government first announced the change in April 2018. Since then, the skilled nursing industry has trained a laser focus on preparations for the new model, which rewards operators for accurately and completely meeting patient needs — while discouraging the use of sheer therapy volume to drive payments.
A wide variety of potential strategies has emerged, with some preaching the importance of attracting generally higher-acuity residents, and others pointing to the perceived benefits of specialties such as speech therapy, depression treatment, and dialysis.
But no matter what strategies leaders have employed in the run-up to PDPM, the program is officially here. To take the temperature of the marketplace, Skilled Nursing News last week reached out to a diverse group of operators, investors, and consultants for their views on the industry’s readiness — and what lies ahead.
It’s also important to remember that the PDPM transition has just begun: Over the coming weeks and months, both the Centers for Medicare & Medicaid Services (CMS) and the marketplace will see just how the new model plays out in practice, with the potential for adjustments looming over the results.
Owen Hammond, CEO, Cascadia Healthcare
Our approach to preparing for PDPM has been very team-oriented. By collaborating within our organization and giving voice to the teams in each of our facilities, we have built a proprietary system that allows for both an initial assimilation of PDPM and the flexibility for future adaptation.
Overall, we feel that our field-driven organizational model has a breadth and depth of talent that gives us a solid foundation and the tools necessary to work with. In addition, we have canvassed our peers and utilized the American Health Care Association’s research and seminars to gain industry-wide perspective. We realize that we are not all-knowing and in such a supportive industry, the sharing of perspective that is occurring is vital.
One of the largest immediate opportunities we see is the positive aspect of creating a reimbursement system that incentivizes a much more granular approach to the care of each individual. Other opportunities exist within our own clinical teams. Encouraging a constant dialogue and providing time for trainings has allowed for a more cohesive and interdisciplinary team dynamic in each of our facilities. In return, this new and consistent focus strengthens our culture and delivers on everyone’s desire for a higher level of care given.
The challenges we face will be framed by the continuous changes that will inevitably follow. An initial potential challenge will be how quickly CMS pivots with results that may fall outside of its perceived modeling — for example, if it causes reimbursements to increase as a whole. For us, resisting the temptation to go all-in on a singular approach and maintaining a nimble mindset for changes is paramount. Operators will need to be adaptable in their approach.
Now is the time for providers in the industry to be open and collaborative rather than reclusive in our own organizations. Though providers in our industry have long shown themselves motivated and resilient in facing the many headwinds, those already in a distressed state or with other current difficulties will likely find that the addition of PDPM exacerbates that distressed position.
We continue to be optimistic about our industry regardless of the challenges that we face. It is our hope that through key partnerships, industry collaboration, and fluid dialogues, we will all find new ways to continuously deliver post-acute care at the highest levels into the future.
Anne Tumlinson, CEO, Anne Tumlinson Innovations
As hospitals are increasingly sending patients home, PDPM actually rewards them for serving the patients who can’t go home, who really need skilled nursing facility care.
The real challenge, in my mind, is not so much whether SNFs can code and care for their current patient mix well enough — it’s whether they can take full advantage of this new payment system. To do that, they have to change the culture and confidence of their teams; they need to invest in clinical capabilities and skills.
That’s really hard. What we’re working on now is sifting through Medicare data to see where these high reimbursement patients come from and go today so we can figure out the best place for them in the future.
Ben Kurland, CEO, Allaire Health Services
We’ve all been fortunate to have plenty of head time to educate ourselves about the new payment model, and to think about how to position our facilities for success during and after this transition.
From a process standpoint, tighter-than-ever interdisciplinary communication will be the most critical element to success. That communication has to be bi-directional — from care providers to the clinical reimbursement team to ensure all conditions are captured, and from the clinical reimbursement team to care providers to ensure that all conditions are consistently documented.
If communication is strong, I believe the greatest challenge for facilities will be less about data collection and capture, and more about effectively evaluating performance. Facilities will need to develop strategic, targeted auditing methods in order to assess their performance under PDPM.
With so many possible scores, and so many potential data points for capture, performance evaluation could easily become cumbersome and inefficient. Those facilities that can develop methods for efficiently identifying inaccuracies or missteps in data collection — within the first few critical months — will be able to attack the challenges early and succeed in 2020.
Philip Krispin, Health Practice Leader, Eastern Union
When it comes to the preparedness of skilled nursing organizations, I’m seeing a healthy mix. Some are ahead of the curve. They’re ramped up and ready — while some others have been more laggardly and are playing it more on a “wait and see” basis.
I expect the industry to come out ahead overall. The change is intended to have a net-neutral budget impact. That means that the best operators now have one more way to shine and stand out. At the same time, the switch will weed out some of the bad actors.
If they haven’t already, teams need to get moving on acclimating themselves to the new reimbursement system. For example, they’ve got to think through the best ways to implement their therapy and pharmacy contracts. Teams also have to make sure that their relationships with referring hospital networks are as strong as possible.
Martha Schram, President and CEO of Aegis Therapies
Aegis has been planning for the implementation of PDPM for well over a year. This shift impacts every level of our business, and we have dedicated our efforts to ensure we are as prepared as possible for this shift.
Our training and preparation has covered care delivery, documentation, IT systems, training, business processes, and much more. While we certainly anticipate Oct. 1 may present unforeseen issues, we feel confident that we have addressed all known items, and as part of our preparation we now have tested systems in place to address anything that comes up.
This industry is comprised of resilient and mission-driven leaders. Just as we have seen in past reimbursement and regulation changes, some are more prepared than others. This is a big shift, and those who have not prepared are at risk, but as an industry, I believe we will continue to do what we all have committed to do: Deliver patient-centered, cost-effective care to our patients.
PDPM presents a fantastic opportunity to continue to revolutionize how we deliver care across the continuum and focus on care that drives positive patient outcomes. We see a lot of opportunity in wellness, restorative, and home health; the challenge is to ensure we are communicating this vision, and the clinical basis behind it, to all stakeholders — in particular, patients, clinicians and SNF providers.
Susan Krall, Vice President of Strategic Partnerships at Quality Rehab Management
We’ve been working hand-in-hand with our clients from New York to Wyoming, via Georgia and Texas, and many states in between. We began with the basic model overview months ago and have taken teams through a remodeling of their first eight days with a “script” designed to accurately capture everything actively requiring skilled care — from the primary reason for the SNF stay to functional abilities and co-morbidities, to renewed competencies in BIMS and PHQ9s. We’ve also provided tools for use throughout the process. from pre-admission through accuracy in HIPPS capturing and reporting.
What we are finding is a level of excitement and eagerness to return to clinically focused discussions about our patients needs, a dramatic increase in collaborative communication. and a desire to get this right.
I’ll provide the top four stumbling blocks we’re seeing and hearing:
- The lack of clear information upon admission, delayed DC summaries from the referring hospital, diagnosis codes that don’t map to clinical categories for SLP co-morbidities, or NTA items that require entry into I8000 and use of the CMS crosswalk.
- Difficulty in capturing the true first three days of “usual performance” as intended. These are totally new concepts for CNAs and nurses who are used to communicating towards “G” — most help needed in seven-day look-back — versus “GG” — amount of assistance needed by helper throughout completion of a task in the first three days from the minute of arrival, prior to the benefit of therapeutic intervention. We must capture information from all frontline caregivers to accurately report usual performance — not just rehab.
- Capturing true discharge GG information, which is where functional improvement will be taken from to look at our outcomes and QRPs.
- Ensuring that documentation in the medical record supports all 161 items behind PDPM items, checked and entered into the MDS.
Mike Cheek, Senior Vice President of Reimbursement Policy, American Health Care Association
The American Health Care Association has worked extensively with our members to ensure they are prepared for implementation of the Patient-Driven Payment Model.
The association delivered training in 48 states using a one-day workshop format where approximately 10,000 people attended. Since these workshops, AHCA has held monthly PDPM webinars that take a deep dive into PDPM topics and offers PDPM-specific ICD-10 training — with an estimated 10,000-plus taking advantage of those. AHCA also provides quick turnaround updates for our members as the Centers for Medicare and Medicaid Services releases information. We continue to provide heavy member education and work closely with our state affiliates in the final days leading up to PDPM implementation.
CMS’s provider-specific revenue simulation shows that generally — although there are exceptions — non-profits, hospital-based SNFs, and those that have traditionally furnished care for medically complex patients perform very well. Facilities that were predominately furnishing short-term rehabilitation, and those with historically less medically complex patients, may see reduced payments. However, because the payment system was not tested in real-world pilots or demonstrations and did not use the same data sources as will be used under PDPM, we really will not know how SNFs will perform until we move past the October transition month and into full operations in November and December.
In addition, we are closely monitoring how the PDPM transition will impact other payers that have been traditionally linked to the SNF Prospective Payment System (PPS) payment model, including state Medicaid programs, Medicare Advantage plans, and Veterans Administration and Tricare benefit programs.
Maggie Flynn contributed reporting to this story.