Post-Acute Care Providers Worry About Patient-Driven Payment Model

August 07, 2018 - Leading post-acute care associations are expressing concerns with the recently finalized Patient-Driven Payment Model (PDPM), which will tie skilled nursing facility (SNF) reimbursement to value, rather than therapy volume.

CMS issued the finalization of the new skilled nursing facility reimbursement model on July 31, 2018. The rule states that the Patient-Driven Payment Model will reimburse Medicare skilled nursing facilities based on a patient’s needs, which will be determined using ICD-10 diagnoses codes, patient characteristics, and other clinically relevant factors.

Using the patient information, CMS will classify patients depending on their therapy needs and adjust skilled nursing facility reimbursement based on that classification. The federal agency also plans to adjust the SNF per diem payments to address the varying costs throughout a skilled nursing facility stay.

CMS intends for the new skilled nursing facility payment model, which will reportedly save providers $2 billion over the next decade, to provide the facilities with the resources to treat medically complex patients. The model also aims to eliminate the financial incentives that have led to unnecessary therapy.

However, the nation’s largest association of long-term and post-acute care providers took issue with the language of the final rule.

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“While the skilled nursing profession welcomes a new payment model, we are concerned with the language in this rule about the Patient-Driven Payment Model (PDPM). The tone of the rule itself and many of the specific comments related to therapy and the new payment model are cause for concern,” wrote the American Health Care Association’s (AHCA) President and CEO Mark Parkinson.

“The therapy language in the rule criticizes skilled nursing providers for providing therapy when CMS has promulgated rules over the last 20 years that encourage therapy,” he continued. “Providing therapy to residents in our centers has been a good thing and it has resulted in millions of residents getting better and returning home.”

The post-acute care association specifically criticized the rule’s implementation of skilled nursing facility therapy limits under the new payment model. CMS plans to enact a combined limit on group and concurrent therapy of 25 percent.

The therapy limit “best ensures that SNF patients will continue to receive the highest caliber of therapy that is best attuned to their individual needs and goals,” CMS wrote in a fact sheet on the final rule.

But Parkinson contended that the rule and its therapy limit does not focus on patient outcomes related to therapy delivery. Instead, the “rule micromanages patient care and therapy minutes at a time when providers are already overburdened by unnecessary regulation,” he stated.

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“For example, the rule sets an arbitrary 25 percent limit on concurrent and group therapy,” he added. “Decisions about how much therapy is provided should not be made from a government office. Clinicians and patients should make those decisions together.”

While the AHCA voiced their concerns with the upcoming Patient-Driven Payment Model, the association commended CMS for the 2.4 percent market basket update to skilled nursing facility reimbursement rates.

The significant market basket update “is essential for struggling providers as they prepare for the health care needs of an aging population,” Parkinson wrote.

LeadingAge, a non-profit alliance of over 6,000 stakeholders from the field of aging services, was slightly more optimistic about the Patient-Driven Payment Model. However, the former American Association of Homes and Services for the Aging did express some concerns.

“We are supportive of a payment system that accurately reimburses for the needs of residents,” Katie Smith Sloan, President and CEO of LeadingAge, told news sources. “CMS clarified some areas of concern in the final rule, but many questions remain about the implementation and impact of this new model.”

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The organization previously submitted their concerns to CMS when the federal agency proposed the Patient-Driven Payment Model in April 2018.

“[W]e have concerns that the PDPM approach was modeled on only one year (FY 2017) of data,” LeadingAge stated in a June 2018 letter to CMS. “We recommend that CMS consider including either partial FY 2018 or FY 2016 data to ensure that the model is stable when considering the impact of changing resident populations over time. Greater confidence in the model could be instilled in the provider community if more robust data are utilized in the modeling.”

LeadingAge also questioned using resident characteristics as the basis for payment and called on CMS to release additional training and guidance on the new payment model as soon as possible.

In that vein, the organization intends to help post-acute care providers transition to the new Medicare reimbursement model through comprehensive education.

“LeadingAge has joined other stakeholder groups in asking CMS for a PDPM stakeholder workgroup to proactively address transition and implementation challenge issues as well as aiding with education and dissemination of CMS guidance,” the organization stated on its website.

“The Patient Driven Payment Model (PDPM) is a significant change for how Medicare is paying for skilled nursing. The focus on beneficiary clinical characteristics appears to be the clear direction of the future as CMS considers other payment systems, home health as an example, and post-acute care as a Medicare segment. LeadingAge will strive to ensure our members are positioned to transition successfully and in an educated manner.”

The AHCA also plans to help transition post-acute care providers to the Patient-Driven Payment Model by partnering with CMS.

“We have been encouraged by our collaboration with CMS in recent months to create smart regulations that truly aim to improve care,” Parkinson stated. “This final rule and the tone of the language within it seem to indicate a different direction. AHCA hopes to collaborate with CMS on the new payment model to make the transition as smooth as possible.”

CMS plans to implement the new Medicare reimbursement model on Oct. 1, 2019.