Health Care

Understanding PDPM - Patient Driven Payment Model

Lawrence TillsonAugust 16, 2019

There are several companies in United States that “provides cloud-based clinical, operational and billing solutions for contract therapy companies, skilled nursing facilities, assisted living facilities, outpatient therapy practices and hospice organizations. They are in the process of switching their Medicare payment rule for skilled nursing facilities from the RUG-IV system to the new Patient Driven Payment Model. This new model offers a brand-new method for evaluating reimbursement. PDPM also strikes therapy minutes as the basis for payment and in turn offers resident classifications and resource needs over the course of a patient’s stay. Every resident receives a case-mix classification which is the basis for their individual reimbursement rate.

The new PDPM system will change thier client’s therapy business in three major ways. The first is care management, this change will now incentivize incredibly high volumes of therapy “to capture the maximized payment”. In order to do that the client company must carefully monitor the services they render because, over delivery of services will not result in payment. Under delivery will be just as hazardous, potentially, resulting in unhappy patients and possible Medicare audits or take-backs. The second area is staffing. The cutback in therapy minutes will result in a smaller demand for therapists which could possibly lessen the burden linked with recruitment and permitting their clients to retain their therapy resources. The last change is financial, PDPM is intended to be budget neutral, since some therapy dollars can now be allocated to nursing, their clients can offset the loss in therapy reimbursement with higher reimbursement for the nursing care that’s already underway.

These changes will be implemented October 2019, and there will need to be some preparation. The first is that their clients must lower costs, generally through enabling the therapists to provide more treatment to more patients, which can be achieved through group or concurrent modes of treatment. The second is to improve patient outcomes. This can be achieved by instituting data-driven protocols which are clinical evidenced based to then offer a care plan that considers the appropriate reimbursement level on a per patient basis. The third is to change revenue sources. Their clients should scour their facilities and find residents who are not covered by Medicare Part A but would benefit from therapy services. Lastly, their clients must optimize the past due reimbursement. This step comes down to ensuring that their patients are correctly classified and that their facility and therapy provider are correctly reimbursed for each resident.

The PDPM system contains an electronic medical records software with advanced business intelligence and data analysis tools. This system or systems like it can support your business by predicting future needs, help manage costs, and assist in customizing treatment protocols. If this sort of system seems beneficial to your business, give Mindtrades a call and we can implement a similar system at your business.

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