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.)

RUG-IV placed patients 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. PDPM now categorizes patients 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, PDPM allows for adjustments for services that do not vary by patient.

As Edwin Frost (founder of Aeris Consulting) 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, nursing facilities receive credit for caring for patients with more complex cases, while in the past this was a cost of doing business. Frost points out in the article that the increased reimbursement potential can be as much as $1,200 to $1,800 per week.

The measure is intended to reduce costly hospital readmissions, which are often a result of unchecked and untreated respiratory conditions. Interventions from a respiratory therapist can prevent trips to the hospital, and a skilled nursing facility’s marketability begins to improve.

Implications of the PDPM Reimbursement Model

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 facility in the future. Aeris Consulting offers a variety of other services to meet your facility’s needs as well, including temporary staffing, as-needed consults, equipment sales and rentals and much more. We’re here to help your nursing care facility be efficient, safe, and profitable.

Want to see more news items and updates that benefit nursing homes and care providers? Be sure to follow Aeris Consulting on Facebook!

Edwin C. Frost, RRT, is the owner of Aeris Consulting & Management. He is a full service respiratory care provider. He has been a Registered Respiratory Therapist since1992. His area of expertise is hospital and health care services. He has served as the National Director of Operations for 23 sleep related breathing disorder clinics throughout the United States. Mr. Frost is an active member of the New Jersey State Board of Respiratory Care.

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