Ask any middle school student in a science class how many variables you should change when testing something new and you’ll get a resounding chorus of the right answer—one. In 2020, SNFs and the Centers for Medicare and Medicaid Services (CMS) were collectively excited to follow this guidance with the transition to the Patient Driven Payment Model (PDPM).
However, COVID-19 and the ensuing public health emergency (PHE) had a different plan. And as a result, it’s been a challenge for all of us within the industry to know how to interpret the early PDPM data, where to attribute causation, and, most importantly, how to react.
The truth is, though, rarely does the real world allow for testing in a vacuum to generate perfect data. Therefore, it’s still important we do our best to pull meaningful trends to drive our plans forward into 2021.
Early Assessments of PDPM Rate-Driver Data Show Trends
Recently, PointRight, a Net Health company, conducted and published a data analysis of its userbase looking at the year-over-year changes in rate-driver percentages from FYQ4-2019 (Pre-PDPM) and FYQ4-2020 (Post-PDPM).1
The bottom line up front is sizeable increases in several rate-driver categories:
- Extensive services (which includes isolation, trachs, and vents) increased nearly 5x – (2.2% to 10.2%)
- Depression increased over 2x – (4.9% to 11.3%)
- Cognitive Impairment increased 4x – (13.0% to 52.2%)
- Restorative Nursing increased almost 2x – (1.6% to 2.6%)
- Swallowing Disorders increased almost 4x – (4.7% to 17.4%)
Could This Be Problematic?
On the surface, this probably looks great to a lot of providers. As PDPM reimbursement is based on the medical complexity of patients, this could mean a boost to the balance sheet. For example, CareTrust REIT saw its skilled-mixed occupancy increase by 270 basis points from Q3 to Q4 of 2020.2 Even in the face of the company’s SNF occupancy dropping by 154 basis points during that same time period, the company still saw a fourth-quarter net income increase to $21.1 million, up from $20.6 million year-over-year.
Before SNFs in similar situations begin celebrating, though, there are questions we need to be asking about these trends.
- Should we be concerned that CMS and providers will scrutinize the dramatic increases in patient acuity?
- If (and possibly more correctly—when) will we see adjustments to PDPM payments as a result?
- How many of these financial wins can be attributed to the shorter-term effects of the PHE?
- Will SNFs see the same positive results under PDPM if and when patient acuity returns to pre-pandemic levels?
Two Steps To Consider Taking Today
If you’re looking for a path forward in response to these concerns, there are two things that can help.
First, we’d encourage you and your team to dig deeper into PointRight’s rate-driver data study to better understand the industry as a whole and begin benchmarking where your operation sits in relation.
Second, begin looking at what systems you have in place to track similar data and how you’re documenting your care. A rise in patient acuity and reimbursement isn’t automatically a red flag, as long as you’re aware of the trends and you’re able to back those trends up with the right documentation.
- PointRight, “PDPM Year 1 – Dive into Your Rate Driver Data”, Maria Arellano, MS, RN, RAC-CT.
- PDPM revenue, caring for COVID patients ‘significantly offsetting’ CareTrust’s decline in occupancy, Danielle Brown, February 12, 2021.