The findings in a new study published by Sage Journals examining the impact of PDPM are in line with what SNF stakeholders have witnessed since the reimbursement reform went into practice in October 2019, a skilled nursing sector expert said.

Titled, “How the Patient Driven Payment Model Shifted Admissions Strategies and Understanding of Care Needs According to Skilled Nursing Facility Administrators,” the work is qualitative in nature, according to Jay Gormley, chief investment officer, COO, Advisory, Zimmet Healthcare Services Group.

Even so, “it reinforces a trend that many operators, lenders, consultants, and healthcare systems have experienced firsthand, which is PDPM has generally been a positive development for the sector, creating reimbursement incentives that are more closely aligned with the increasingly complex clinical needs of today's post-acute patient population.”

The report divides the findings and commentary into three themes:

Theme 1: Structure – the PDPM Reimbursement Structure Prioritized Patient Clinical Characteristics Rather Than Therapy Minutes

Theme 2: Process – Care Coordination and Communication Processes Between SNFs and Hospitals as well as Among the Interdisciplinary SNF Team Increase with Focus on Patient Documentation Review

Theme 3: Outcomes – SNF Care Teams Reported Having a Better Understanding of Patients’ Care Goals and Needs

Financial Feasibility

Gormley said by shifting Medicare reimbursement away from therapy volume and toward nursing acuity, ancillary services, and clinical complexity, PDPM has made it more financially feasible for facilities to care for residents requiring extensive nursing services, wound care, respiratory support, IV medications, complex medication management, and other resource-intensive interventions.

“One of the study's most compelling findings is that many facilities reported becoming more willing to accept medically complex patients because reimbursement more accurately reflected the resources necessary to care for them,” he noted.

Administrators described investing in additional clinical capabilities, expanding specialty programs, enhancing respiratory services, and strengthening interdisciplinary care processes to support higher-acuity admissions.

“These observations closely mirror broader industry trends. Over the last several years, hospitals have increasingly relied upon skilled nursing facilities to manage patients who, a decade ago, may have remained in the acute care setting for longer periods,” Gormley said.

By putting an emphasis appropriately recognizing clinical complexity rather than simply rewarding therapy volume “represents a meaningful improvement over the prior RUG-IV system,” he added.

Communications Boost

In line with the report’s theme on processes, the study puts a bright light on the improvements in documentation practices, care planning, and interdisciplinary coordination for facilities since PDPM came to be.

“Administrators repeatedly described more robust communication between nursing, therapy, MDS, dietary, respiratory, and admissions teams, as well as more detailed review of hospital records and discharge documentation,” Gormley said.

In practice, PDPM has encouraged SNFs to pay closer attention to clinical details that may previously have been overlooked in a reimbursement environment focused primarily on therapy utilization.

Caution Ahead

But, he said, the study should be interpreted with appropriate caution since the findings are based on interviews with administrators from only 40 facilities nationwide and rely heavily on participant perceptions rather than measurable outcomes. The report also relies on interviews executed during the pandemic period in 2020 and 2021, “making it extraordinarily difficult to isolate the effects of PDPM from the effects of the most disruptive event in modern nursing home history,” Gormley said.

Questions or comments? Contact Patrick Connole at pconnole@parkplacelive.com.