What Drives PDPM

February 11, 2020

Rajeev Kumar, MD

Like most people, there are days when it is tempting to kick back and reminisce about all the fun during long lost childhood days. Fond memories of long, and fun-filled, driving vacations—each and every summer—are still gleefully etched in memory. Those trips took weeks of planning and incorporated a variety of opinions from the entire family. However, when the dust settled, there was just one driver—the author’s father. 

After nearly two years of planning, the long term and post-acute care profession has embarked on its Patient-Driven Payment Model (PDPM) journey. Now that therapy is not the primary driver of reimbursement for skilled nursing facilities (SNFs) anymore, before one could say Interim Payment Assessment (IPA), thousands of therapists have job uncertainty. To come to grips with this somewhat expected, yet sobering reality, the burning question—what drives PDPM—needs to be answered first. 

The Right Amount

When introducing RCS-1, and then PDPM, the Centers for Medicare & Medicaid Services (CMS) realized that the therapy-centric, resource utilization groups (RUGs) based prospective payment system (PPS) was flawed and obsolete. Now, the main goal of PDPM has been to reimburse SNFs based on patient characteristics and complexity of care.

Since therapy would cease to be the prime driver of SNF reimbursement under PDPM, most expected the therapy utilization to drop. However, CMS has declared that it reserves the option to audit providers when therapy is underutilized. So, what does all of this mean? How much therapy is the right amount? And who decides what is right?

Firstly, PDPM means just that. It is a payment model driven by patient characteristics and complexity of care. It goes without saying that the care of patients in SNFs, in general, ought to include therapy. The goal for patient stays in SNFs is to optimize their functional status while providing all the necessary clinical and nursing care, so that they may transition to their homes or to other care settings at an opportune time.

Granted, there will be patients who do not benefit from therapy as they may be too weak or too sick, but even they need to be reevaluated periodically to assess their candidacy for therapy.