The Patient Driven Payment Model (PDPM) is becoming a common practice for skilled nursing facilities (SNFs) as more providers shift to value-based care. PDPM for SNFs can help incentivize quality care while increasing reimbursement opportunities, especially when compared to older reimbursement models. To make the most of PDPM, it’s helpful to understand how the system works and what techniques you can use to maximize reimbursement rates and improve care outcomes at your SNF.
PDPM is a case-mix classification model developed by the Centers for Medicare and Medicaid Services (CMS). This payment model was designed for skilled nursing centers to improve payment accuracy from the former Resource Utilization Group Version IV (RUG-IV).
RUG-IV categorizes payments into seven categories — rehabilitation, extensive services, special care, impaired cognition, clinically complex, behavior problems, and reduced physical function. These categories are then broken into 44 sub-categories based on Medicare reimbursement rates. The ongoing problem with this structure was using higher RUG-IV groups to maximize reimbursements, often failing to meet patients’ unique needs.
PDPM shifts away from volume-based services to focus on the factors that are clinically relevant to each patient. Rather than reimbursements being calculated based on therapy minutes, they’re determined based on a resident’s classification and the anticipated resources they’ll need during their stay.
PDPM includes five case-mix components:
Each category has a base rate and case-mix index (CMI) for each group housed under it. For example, major joint replacement or spinal surgery can fall under PT and OT. Function scores within these categories then determine how many resources a resident is expected to need.
PDPM is a program designed to improve patient outcomes, and it aligns with a value-based care model as opposed to a fee-for-service model. Since reimbursements are determined by the expected level of care, it’s essential to have an in-depth understanding of residents’ needs and record these needs accurately for appropriate reimbursement.
Shifting to PDPM from RUG-IV requires a few changes in strategy, but doing so can help maximize reimbursements and support the financial health of your SNF.
Accurate documentation is essential for PDPM, which operates differently from its RUG-IV counterpart. When a SNF wants to implement PDPM, the first step is developing clear documentation workflows to ensure all information about a resident is captured. Providers need to establish the therapies a resident has undergone, the level of function they have, and any notes pertaining to improvements and health status over time.
This documentation must clearly define the medical necessity of all actions taken. As a result, nurse and physician notes are critical for every phase of care. It can be helpful to establish checkpoints for keeping these notes during a resident’s care and have a single system for implementing the notes.
Software tools designed for coding and billing under PDPM can be a huge advantage for your documentation workflow. These purpose-built platforms create a unified place for note-taking and reduce confusion surrounding specific codes and CMIs.
In addition to software tools, data analytics can be another excellent strategy for optimizing reimbursements. These tools often come with reporting features for a big-picture view of resident progress and needs. Create quality metrics for your SNF and use these reports to monitor your team’s ability to align with these metrics. Striving for continuous improvement in care outcomes will be the largest driving force behind reimbursement rates.
Skilled nursing facilities encompass a wide range of staff, from physicians and nurses to physical therapists. Your staff, regardless of their role, need to be informed about best practices for aligning with PDPM requirements. Medicare meetings can be an excellent time to connect with the different areas at your center and create training processes for every member of your team. You can also use this time to establish quality metrics and give your staff clear benchmarks to strive for.
With your staff trained to meet shared quality metrics, you can introduce collaborative efforts to ensure new PDPM processes are being used. For example, you might lean on administrative staff to support initial admission documentation, and then count on physicians for initial health assessments. From there, nurses can continually update patient information throughout the course of care. This collaborative process helps make sure all the details are captured for strong reimbursement rates.
The PDPM model offers various benefits for patients and SNFs.
PDPM focuses on individual patient needs, ultimately improving care outcomes. Providers take time to understand each resident’s condition and determine the best course of action. With reimbursements based on patients’ case-mix classifications, providers are incentivized to provide focused, need-driven care.
This individualized approach to patient care also leaves patients and their families more satisfied with your services. Improved outcomes allow patients to leave the center earlier, and delivering care that leads to visible outcomes makes patients feel understood and taken care of. The combination of improved outcomes and increased resident satisfaction can also be valuable for improving your center’s reputation.
The PDPM system encourages an advanced understanding of a resident’s condition, from type of therapy to function level following this therapy. Many SNF patients face comorbidities that can make care more challenging — but PDPM’s documentation requirements make it possible to understand how different conditions affect one another.
A core part of PDPM is regular assessment from admission to determine how care needs shift over time. These assessments can help providers see where comorbidities may lead to hurdles in improvements. Providers equipped with this information can conduct early risk screenings, implement additional support services to prevent readmission, and apply other best practices for these patients. These steps help to improve care outcomes for complex patient populations.
PDPM for SNFs can lead to stronger reimbursement practices to boost the financial health of these facilities. The detailed reimbursement model improves the accuracy of payments to your facility. With these more accurate reimbursements, SNFs can free up resources and allocate budget to other parts of the center, helping it serve patients more readily while keeping the facility successful.
With the improved reputation that comes from better care outcomes and higher resident satisfaction, SNFs may also experience an increase in patients over time.
First Docs is a physician-first group dedicated to delivering patient-centered care at acute hospitals, assisted living communities, and SNFs. PDPM is one of the ways our attending physicians improve the quality of care at your center. With improved leadership and an attending physician with a value-based care focus, your skilled nursing center can better meet the needs of your complex patient population.
Our team consults with the leadership at your facility to learn more about your patient population and design a staffing model that fills the gaps. We help you establish new workflows with your medical director and oversee the launch of this staffing model to prepare your team for this new addition.
Deliver more effective and compassionate care in alignment with PDPM. Contact us today to learn more.