PDPM’s effect on reimbursement: First quarter results
The Patient Driven Payment Model (PDPM) has taken the world of long-term care by storm. You may have noticed changes in your skilled nursing wing with regard to documentation, timing of assessments, and maybe even staffing. PDPM was intended to be “budget-neutral” and not have a huge impact on any facility’s bottom line. But data from the first quarter have been released, and you might be surprised what we found.
As of October 1, 2019, skilled nursing residents receiving Medicare fall under the PDPM standards. PDPM strives to be a more accurate payment structure, since it incorporates and accounts for care provided by multiple disciplines, rather than relying on therapy hours alone to drive reimbursement. Now, there are nutrition-related comorbidities (i.e., malnutrition, morbid obesity, tube feeding, and parenteral nutrition) that can “bump” a resident into a higher reimbursement bracket. All of these changes relate back to value-based care, which you can learn more about here.
According to data from Zimmet Healthcare Services Group, most skilled nursing facilities have seen a modest increase in their reimbursement since the implementation of PDPM. How modest is modest? Before PDPM, the average per diem reimbursement rate for skilled nursing facilities was $562.89. After PDPM, that number jumped to $614.96, an increase of just over $52 per patient per day.¹
Although $52 may seem insignificant, think of it in terms of an entire length of stay. According to the Centers for Medicare & Medicaid Services (CMS), the average skilled nursing length of stay is between 25 and 30 days.² ³
$52 x 25 days = $1,300 per patient
$52 x 30 days = $1,560 per patient
And if your facility has a 30-bed skilled nursing wing, well, that’s a revenue increase somewhere between $39,000 and $46,800 each month.
What this means
As we mentioned, CMS did not intend for PDPM to increase skilled nursing facilities’ revenue, but it seems as though that’s exactly what has happened. It’s anyone’s guess how long CMS will allow this to continue before they issue an adjustment to payment rates. Experts at Zimmet Healthcare Services Group estimate that, unchecked and uncorrected, reimbursement rates could reach $635 per patient per day by April 2020.¹
What does this mean for dietitians? With the implementation of PDPM, the MDS schedule was streamlined to only a 5-day MDS assessment, on which the reimbursement rate is based. This means timely nutrition assessments are more important than ever. In addition, a dietitian’s documentation can help to bolster a malnutrition diagnosis, helping to earn additional non-therapy ancillary comorbidity points. For more information on PDPM and malnutrition, check out our on-demand CPEU webinar, “Malnutrition and the Patient Driven Payment Model.”
Only time will reveal how CMS will respond to the reimbursement changes brought by PDPM. Embrace the changes and continue to provide top-notch nutritional care to your skilled nursing residents.
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Spanko A. Early PDPM claims data reveal far more winners than losers, ‘impossible combinations’ of conditions. Skilled Nursing News website. https://skillednursingnews.com/2019/11/early-pdpm-claims-data-reveals-far-more-winners-than-losers-impossible-combinations-of-conditions/. Published November 20, 2019. Accessed February 11, 2020.
Medicare Skilled Nursing Facility (SNF) Transparency Data (CY2013). CMS.gov website. https://www.cms.gov/newsroom/fact-sheets/medicare-skilled-nursing-facility-snf-transparency-data-cy2013. Published March 9, 2016. Accessed February 11, 2020.
MEDPAC. Report to the Congress: Medicare Payment Policy. http://www.medpac.gov/docs/default-source/reports/mar19_medpac_ch8_sec.pdf. Published March 2019. Accessed February 11, 2020.
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