What is the PDPM Reimbursement Model?

What is the PDPM Reimbursement Model

As of October 1, 2019, the Patient Driven Payment Model for Skilled Nursing Facilities went into effect, as approved by the Center for Medicare and Medicaid Services. What is the PDPM reimbursement model? It is a new method of classifying patients with specific respiratory needs in a Part A stay, which replaces the Resource Utilization Group, Version IV (RUG-IV) case-mix classification system. (See more about PDPM from the CMS with this link.)

With RUG-IV, patients had been placed into a therapy payment group, which determined payment classification based on volume of therapy services. As a result, skilled nursing facilities (SNFs) had an incentive to provide therapy regardless of a patient’s individual characteristics or needs. With PDPM, patients will now be categorized into much more specific, data-driven characteristics, which in turn reduces administrative costs for providers.

The PDPM reimbursement model provides payments through six different components, five of which are case-mix adjusted for varying patient characteristics. In addition, adjustments can be made for services that do not vary by patient.

As Edwin Frost has pointed out in this article in the Skilled Nursing News, skilled nursing facilities have been taking on sicker patients with more complex needs, and as a result, there is an increased opportunity for profitability with PDPM. With the new model, credit is given to nursing facilities for caring for patients with more complex cases, while in the past this was a cost of doing business.

The PDPM reimbursement model requires at least 15 minutes of face time between therapists and patients each day, and a skilled nursing facility must document the patient’s condition during a look back period. Through PDPM, outsourced respiratory therapy becomes much more attractive and profitable for nursing facilities.

Find out more detailed answers to the question: What is the PDPM reimbursement model? Reach out to Aeris Consulting today to learn more about what this means for your skilled nursing facility in the future.