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As skilled nursing providers prepare for PDPM (which will take effect 10/1/19), what key initiatives should they undertake now to ensure an efficient transition?




Don’t just rely on CMS projections. Do your own calculations.


How much money is your SNF making now, and how will that revenue vary based on services provided under PDPM? While CMS has provided tools to show SNFs how they’ll do under the new payment model, it’s important that providers run their own projections as well. The information from CMS can certainly provide guidance, but it is based on a single point in time. As your population changes between now and October 1, 2019, your organization will have different outcomes and the financial implications will vary.

Here’s an informative exercise: Examine your recent referrals. Categorize them based on those you welcomed; those you were cautious about; and those you declined. Then compare those referrals to all of the conditions contained in PDPM’s non-ancillary services list. What have been the barriers to taking certain individuals, and what could you change, improve, or implement in order to take higher acuity patients?




ICD-10 codes will now set the reimbursement rate.

Under PDPM, proper ICD-10 coding will be vital because ICD-10 (along with other patient characteristics) will be used as the basis for patient classification under the new case-mix model. ICD-10 was previously important to doctors and hospitals. It will now determine how SNFs get paid.

Does your SNF already employ knowledgeable, collaborative personnel with strong coding capabilities? Savvy SNFs are making sure their team members are trained on Minimum Data Set (MDS) coding accuracy and clinical capabilities. They are also implementing extensive ICD-10 training and employing audits to check the effectiveness of that training.




Until now, rehab providers have been the revenue driver. Under PDPM, they will be a cost center.


With PDPM, the rehabilitation business model will change substantially, as therapy minutes will no longer be the driver of reimbursement. Be ready to negotiate your therapy contract after you’ve done your homework. Expect that your rehab provider will be armed with data and ready to negotiate a new contract in their best interest. Therapy providers may want you to sign new contracts with them as soon as possible, but there is no need to jump the gun.


Before these negotiations, you must understand exactly how the rehab provided affects your bottom line. Take a sample of 20 patients. How many therapy minutes were they given? What was the therapy component of reimbursement, and how much did you pay the therapy provider? When you’re armed with the right ammunition, you’ll be prepared to negotiate!


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