SNN Poll: Skilled Nursing Therapy Layoffs, Hour Cuts Could Slow Down into 2020

More than 40% of skilled nursing facility operators and vendors have laid off therapy staff amid the shift to a new Medicare payment model, a recent Skilled Nursing News poll found, but more staff cuts may not be part of their plans for the new year.

When asked if they planned on laying off therapy employees over the next six months, only about 16% said yes, while an overwhelming 84% said no more headcount reductions were coming into 2020.

That’s compared to the 43% of operators and vendors who indicated that they had made some kind of staff reductions related to the new Patient-Driven Payment Model (PDPM), which took effect on October 1.


Under this new Medicare reimbursement system, skilled nursing facilities and their third-party therapy partners no longer receive payments based on the volume of services provided; instead, the federal government intends to tailor reimbursements more closely to resident conditions, with payments generally increasing along with the acuity of a given patient’s needs.

In theory, this shift was designed to curb the unnecessary provision of therapy services for purely financial reasons, a prospect that drove countless Department of Justice investigations into nursing homes and their therapy partners under the now-defunct Resource Utilization Group (RUG) payment system.

But in practice, at least in the early going, PDPM has turned therapy into something of a cost center for operators, which have responded with layoffs and strategy changes. Industry leader Genesis HealthCare (NYSE: GEN), for instance, laid off just under 6% of its therapy workforce in early October, a move that — combined with an increase in group and concurrent modalities — will bring $30 million in savings to the company.


In addition to group and concurrent services, which under the new model can account for up to 25% of each individual resident’s total therapy plan, operators have also looked to reduce expenses by cutting therapist hours and shifting staff to PRN, or as-needed, status.

More than half of respondents, or 53%, reported that they had shifted at least a portion of employees to PRN; a plurality, or about 48%, said the PRN changes affected 20% or less of their therapist workforces. But as with layoffs, those shifts may be coming to a close: Only about 2% of respondents said they planned to implement PRN shifts in the future.

In fact, the only area where a majority of respondents saw future changes was around the proportion of group and concurrent services, which 58% said would increase over the next six months.

That answer comes even after 75% reported already having boosted group and concurrent services in the immediate wake of the PDPM shift, with the majority of respondents indicating current proportions of 20% or less.

SNN conducted the poll from October 29 to November 24, inviting operators of nursing homes or third-party therapy companies to provide voluntary answers to questions hosted on SurveyMonkey; we provided a link to the survey on our website, as well as in multiple editions of our daily and weekly subscriber newsletters.

In all, we collected responses from 111 users, though individual questions had lower engagement — ranging from 104 to 24 respondents. SNN acknowledges that the poll was not scientific; we instead intend to provide a snapshot of early sentiment and strategy at a critical time in the skilled nursing industry.

We welcome all reactions to the poll and its results; please contact editor Alex Spanko at [email protected] to weigh in with your opinions, constructive criticisms, and general comments.