The Patient-Driven Payment Model



Long-term care professionals have been diligently cramming to prepare for a new skilled nursing reimbursement system in October, but a data expert had a sobering observation.

The Patient-Driven Payment Model is the biggest overhaul of nursing home reimbursement in at least a generation. But it is only a temporary fix, said Steven Littlehale.

“PDPM is indeed a stepping stone to something else,” he explained. Ultimately, it “will morph into” a unified post-acute care payment system (U-PAC) called for in the IMPACT Act. That final evolution could come as soon as the prescribed 2023.

Littlehale,  a gerontological clinical nurse specialist, and executive vice president and chief clinical officer at PointRight Inc., delivered extensive tips for what successful providers should be doing — and avoiding — regarding PDPM preparations.

First, however, he made clear that PDPM is still a system based on volume.

“PDPM is not value-based purchasing. Please don’t confuse that,” he said. “It’s really all about volume.”

He also explained that the system should not be too surprising to stakeholders because it was unveiled about a year after RCS-1 was floated as a replacement possibility for the RUG system. The resulting deluge of comments from providers and others, however, forced a change from RCS-1 to PDPM — and delivered a new outlook, Littlehale happily pointed out.

“With PDPM, it went from the idea of ‘resident’ to ‘patient.’ I’m fascinated with that,” he said. “It’s the first time CMS has acknowledged the patient. Hallelujah!”

Clearly, the new system is focused more on nursing and clinical aspects of care, including non-therapy ancillaries. As a result, certain competencies that aren’t therapy-related must be better developed and polished. Among Littlehale’s noted observations:

• While ICD-10 coding becomes a critical tool, the “hospital ICD-10 code is almost irrelevant. The SNF one is important.”

• No extra hiring is required. A facility simply needs someone with ICD-10 expertise — from the SNF’s viewpoint, of course. “‘Good enough’ is just fine with PDPM.” There is no need for super-precise sub-categorization within ICD-10, he added.

• The notions of cutting back on MDS staff or therapy offerings are bad ideas. The latter, for example, could cause CMS to perform a retroactive examination of current therapy prescribing practices, which could lead to penalties. “CMS gave people enough rope to hang themselves,” he said. Because there will be fewer assessments, each one’s accuracy becomes all the more important.

“Don’t do anything with MDS staff, except give them more education, clinical education,” he added.

Although CMS has not issued final PDPM details yet, Littlehale says there are certain ways already known on how to fail at it, including:

• Delaying getting prepared for the new system. Now is not the time to bury one’s head in the sand. PDPM should not stand for “Please Don’t Pester Me,” Littlehale cautioned.

• Not reconsidering relationships with therapy providers. Roles are changing, so other parameters also should as well.

• Relying too much on CMS’s PDPM conversion calculator. It doesn’t, and can’t, take into effect how operators will change their behavior, thus spurring more changes. Vendors and various other accounting groups may be overstating their hands, too, since CMS has not finalized its expectations or details yet. It is the same reason he believes that providers should not use current MDS items to project PDPM rates..

MDS nurses will be critical, however, and they should learn to think more clinically. “Today’s MDS coordinator s are traffic cops,” Littelhale said. “Tomorrow’s must be astute clinically minded care managers.

Some tips for success:

• Patience. “It’s ‘rinse-and-repeat’ during training,” he explained.

• Thoughtful renewal of therapy contracts, and therapists.

• Find an ICD-10 champion for the building.

• Get high-quality PDPM -related education for staff.

• Check key financial drivers periodically and evaluate them relative to benchmarks to make sure you’re staying on track.

Littlehale said some of his biggest concerns about PDPM are compliance-related. Provider treatment and diagnosing habits will come under greater scrutiny with the emphasis shifting more toward nursing. Among the conditions regulators will be keeping a close eye on are percentage of residents with depression (4.9% national average), mechanically altered diet (24%) and a swallowing disorders (3.7%). Significant changes in benchmarks like these, or their coding, would bring “certain scrutiny.”

Ultimately, when the unified post-acute payment system comes, Littlehale thinks SNFs have a good chance of being winners. That’s because they will be viewed as a relatively inexpensive care setting and reimbursement will be doled out based on condition, not type of service provider.