Patient-Driven Payment Linked to a Decrease in SNF Therapy Utilization

January 13, 2022 - The implementation of the Patient-Driven Payment Model (PDPM) was associated with a decrease in the volume of rehabilitation therapy utilization, according to a study published in JAMA Health Forum.

However, the study findings showed that the PDPM had no significant impact on patient outcomes.

In October 2019, Medicare adjusted its skilled nursing facility (SNF) reimbursement model to PDPM. The adjustment modified financial incentives for SNF to ensure therapy provided was based on the clinical needs of patients instead of at levels to amplify Medicare reimbursement.

Brown University researchers conducted the cross-sectional study of more than 200,000 patients admitted to SNF following a hip fracture between January 2018 and March 2020. Researchers then compared therapy utilization and patient outcomes pre-PDPM and post-PDPM. 

Researchers discovered a decrease in individual therapy averages. During the five-day assessment, individual therapy declined from 97 minutes per patient per day pre-PDPM to 78 minutes per patient per day post-PDPM implementation.

In addition, total therapy used in the first week following admission was nearly 12 minutes less (13 percent) for patients admitted post-PDPM than those admitted pre-PDPM.

However, nonindividual therapy minutes increased to an average of 3 minutes per day for patients admitted post-PDPM.

In March 2020, nonindividual therapy minutes dropped with the onset of the COVID-19 pandemic. SNFs attempted to reduce virus transmissions by severely limiting or eliminating communal activities.

“These changes, however, did not appear to be accompanied by consistent changes in key patient outcomes, including rehospitalization, SNF length of stay, or functional scores at time of discharge. We did observe a modest increase in the reporting of certain chronic conditions,” the researchers stated in the report. 

The study found that 19.7 percent ofpatients were discharged directly to the hospital from SNFs within 40 days of admission pre-PDPM compared to 18.3 percent post-PDPM. The declining trend continued throughout the study period.

Patients that stayed in a SNF for over 40 days d also eclined from 42.4 percent pre-PDPM to 39.9 percent post-PDPM.

Researchers noticed a decline of 2.7 percent in the share of individuals with a length of stay greater than 40 days post-PDPM implementation.

There were no consistent trends in different types of SNFs regarding ownership status, chain affiliation, or the share of Medicare-paid residents.

“The ultimate question is whether the reduction in the therapy volume is associated with worse patient outcomes,” the researchers explained.

“This did not appear to be the case with regard to 3 key outcomes as no significant changes were found. This suggests that the PDPM resulted in a ’right-sizing’ of therapy provision in SNFs and reversed prior incentives under the RUG system to provide therapy when there was minimal clinical benefit.”