We are now one week into the new PDPM reimbursement system, and already therapist layoffs have begun.
Well, we are just one week into the new Patient-Driven Payment Model (PDPM) for Medicare reimbursement for skilled nursing facilities, and already the therapist layoffs have begun. Why? Because providers are no longer paid for the amount of therapy they provide patients. The new payments will be based on patient needs, especially for higher acuity patients.
So, here is my question. If the patient profile has not changed from September to October, why were patients provided with a certain number of therapy hours in September if they actually did not need that much therapy, or if the extra therapy had little material benefit? And if the therapy was cut back in October, have outcomes for any patients suffered? I doubt it.
Therapy was one area where nursing facilities could actually make money. But that has been partially removed under the new PDPM protocols. Were some providers gaming the old system? Don’t quote me, but sure, and in their defense, with other reimbursement levels so low in many states, they had to do what they had to do to cover rising costs.
But what will the backlash be? Will there be a lookback into past billing practices for therapy services? Perhaps, and if some providers start to make more money under PDPM than before, you know CMS will look into how they are doing that and make payment adjustments. So, in this context, how do you value a skilled nursing facility? Very carefully. And it may be just one reason why average SNF prices have remained more than 20% below their 2016 peak for three years now.