A Year into PDPM and Many Months into COVID, Respiratory Therapy Waits for ‘Industrywide Embrace’

When the Patient-Driven Payment Model (PDPM) overhauled the way Medicare reimburses care provided in skilled nursing facilities, the federal government attempted to put the focus on the care needs of patients — and in doing so, incentivized facilities to capture patient conditions more thoroughly and add to their clinical specialties.

At least, that was the theory. But when it comes to respiratory therapy — an area of “massive” opportunity under PDPM according to several experts in the months leading up to the new system — reality hasn’t quite borne up to the expectation.

Some of that is related to the COVID-19 pandemic, which upended the world of health care and uniquely affects virtually all aspects of SNF care.


“I think everybody anticipated being all PDPM, all the time this year, and that quickly dissolved into all COVID, all the time,” Gregory Pino, the co-founder and president of Dynamic Respiratory Services, told Skilled Nursing News on October 27. “What’s interesting about the dynamic here is the opportunity for respiratory therapy under PDPM and because COVID is a respiratory disease, the question is: Has respiratory become something that has been focused on in facilities, and has this bridge been connected to PDPM? And the answer, really globally speaking, is ‘No.’ Which is definitely a shock.”

Under PDPM, reimbursement is driven by resident acuity, and in the months leading up to the transition, respiratory therapy was drawing considerable interest. Melissa Sabo, the chief operating officer at the Cumberland, Md.-based post-acute and long-term care consultancy Gravity Healthcare Consulting, told SNN in July 2019 that almost all her clients made inquiries about how to add respiratory treatments to their programs.

Victoria Florentine, the president of the Orangevale, Calif.-based Select Respiratory Services (SRS), was also witness to this dynamic. Her company provides post-acute cardiopulmonary services — essentially in any venue outside the hospital, including SNFs — with a footprint in primarily northern and central California.


Prior to PDPM, a couple of the larger SNFs in that region had contracted with SRS for services after Medicare began implementing penalties for readmissions to the hospital. But interest in the cardiopulmonary services did not gather momentum until there was a financial incentive in the form of the Medicare reimbursement overhaul.

“When PDPM was looming, then everybody and their brown dog started calling,” she told SNN in a November 2 interview.

This resulted in a hiring spree by SRS, in preparation for six to eight new contracts that were ready to execute — and then the pandemic struck. While Florentine said she is confident SRS will be able to pick up where it left off once facilities are able to reopen their doors, at the time, she was caught by surprise by how little interest there was in respiratory therapy despite the respiratory afflictions caused by COVID-19.

“We [invested in personal protective equipment], we hired a couple extra therapists, and then we got nothing, absolutely nothing,” she said. “We all know the reason for that. It was a few things; it was the SNFs just locking down airtight, so we couldn’t get into any of the SNFs. For a while, we couldn’t get into the ones we already had contracts with.”

The longest contract SRS had, with HCR ManorCare, was of “a couple years'” duration, and so that entity continued to let SRS’s respiratory therapist into the building, Florentine said. But the impact of COVID-19, far from creating an interest in SRS’s services, ended up being a very hard financial hit, she said.

Home health companies, which Florentine said SRS does not actively pursue, have been signing up, but SNFs are still hunkered down.

The focus from COVID-19 has been primarily on infection control, rather than respiratory clinical care or preventive measures for higher-risk patients, Pino told SNN.

“That’s not to say that many providers haven’t focused on that,” he said. “But I’ve yet to see an industrywide embracing of more intensive respiratory programs around that.”

Missed PDPM opportunities

Before the pandemic struck, all eyes were on how SNFs were faring under PDPM, and for the most part, they appeared to be coming out ahead.

The payment system represented the first real alignment of incentives to provide respiratory therapy programs, despite “a huge need amongst the population in nursing facilities,” Pino told SNN.

Dynamic Respiratory Services provides management services for respiratory therapy in more than 200 SNFs in about 15 states. One of its program offerings is a retrospective report to examine how SNFs are capturing respiratory needs, and in Pino’s experience, many facilities are leaving opportunities for both clinical care and reimbursement on the table.

There were some hurdles to capitalizing on PDPM’s reimbursement potential, among them the imperative to successfully document the patient’s need for respiratory care. One challenge is that intravenous feeding for patients — as a qualifier for the “special care high” category — is encompassing more patients than anticipated. Respiratory therapy would also qualify patients for this category, but many of the patients who would be categorized in the latter are being placed in this category anyway because of IV feeding, Pino said.

“I would say there’s a 50% overlap of patients who have IV feeding and also have indications for respiratory therapy,” he said. “So that does leave 50% of the other patients that need it open to qualify for respiratory therapy as their qualifier.”

Two other challenges, however, remain. The first is the need to provide seven consecutive days of respiratory therapy to be able to capture and code for at least 15 minutes a day before day eight of the SNF stay. That necessitates “a very timely assessment for respiratory therapy,” starting it before the second day of the SNF stay, and not missing a day of capture, Pino said.

“That in and of itself is a challenging benchmark to meet for anybody,” he said. “Let alone a facility that is managing it with nursing, and nursing really has to be the way to manage it, because it still does not provide enough revenue to justify having a respiratory department, like we have physical or occupational departments.”

Nursing engagement, naturally enough, is the other challenge, especially as many SNFs are overwhelmed by COVID-19, staffing challenges, and many other issues — and nurses themselves are not necessarily used to providing an additional level of respiratory therapy services.

Mike Harvey, a respiratory therapist and owner of Specialized Respiratory Services, has seen a similar phenomenon. His company provides contract respiratory therapy services to 30 SNFs in 16 states, as well as consulting services and in-house program development.

“Since 1998, the focus usually has been on rehab,” he told SNN in a November 2 interview. “Without that mindset being changed early in the game of PDPM in last October, November, December — a lot of revenue opportunities were missed by skilled nursing providers early on. A lot of them are playing catch-up, and even the competency requirements for nursing provide some of those modalities was not completed.”

When PDPM was implemented, Harvey was expecting a “more stringent approach” from the Centers for Medicare & Medicaid Services (CMS) on how the respiratory component of skilled nursing would be dealt with.

“We’re subject to audits now for that skilled nursing component,” he told SNN. “And I don’t think a lot of skilled nursing is aware of what’s required or what will be required.”

He anticipates CMS to apply scrutiny to respiratory therapy services and the reimbursement provided under PDPM once COVID-19 slows down and the immediate crisis passes. But he also believes that once hospital occupancy recovers, SNFs will start moving into building up their respiratory programs, since hospitals will want to send their patients to the SNFs that have respiratory capabilities — particularly in markets with high portions of patients who would need respiratory services.

Harvey is working with a large nursing home chain to implement an in-house respiratory therapy program in six to eight buildings. He believes the COVID environment gives SNFs the opportunity to re-evaluate their needs, while PDPM has played a role in granting the financial capabilities to set up clinical expertise going forward.

But it requires an investment beyond the equipment that’s required.

“It requires [the chain] to really rethink their entire philosophy of care and their entire marketing component,” Harvey said. “They’re used to marketing for those primary orthopedic patients, rehab patients historically, pre-PDPM. It’s [now] making sure they have the right resources in place, policies, procedures and care protocols — things that typically they didn’t address entirely.”

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