Cost to Capital: Turn Your Rehab Therapy Department into a SNF Revenue Center

It’s been a tough few years for skilled nursing facility (SNF) rehab departments.

Once substantial sources of revenue for organizations, rehab departments found themselves on the receiving end of rapid regulatory shifts that turned these consistent capital generators into cost centers seemingly overnight.

But it’s not all bad news. With the right approach, SNFs can get their rehab departments back in the black.

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The New Rehab Reality

In 2019, Medicare Part A adopted the Patient Driven Payment Model (PDPM). Under PDPM, payments to facilities were made based on overall care rather than specific treatments.

As a result, the steady revenue stream of specific rehab treatments suddenly ran dry.¹ The minutes patients spent in rehab therapy no longer drove reimbursement, causing a shift in the way operators viewed the department from a revenue standpoint.

With less focus on minute calculations, PDPM did allow for greater flexibility with rehab therapy delivery models. This allowed for more group and concurrent treatments, a shift that the Centers for Medicare and Medicaid Services interpreted as a decline in rehab therapy focus.²

(We should note this interpretation has been widely refuted within the profession.)

The challenges, unfortunately, don’t stop there.

CMS recently published its SNF Prospective Payment System (PPS) rule for the 2023 fiscal year, which includes a  $320 million decrease in Medicare Part A payments to skilled nursing facilities.²

While the days of rehab departments operating as their own payment drivers are largely gone, SNFs can still take action to convert these cost centers into value-added services that help organizations optimize PDPM revenues.

Leverage Overall Expertise

Rehabilitation departments are full of skilled professionals delivering high-quality care to patients. As a result, they have a significant, positive impact on the overall quality of care and, in turn, the total revenue earned by SNFs. 

In fact, rehab departments boast some of the highest treatment satisfaction rates. Research found that the average satisfaction rating for patients undergoing musculoskeletal physical therapy was 4.44 out of 5.

By incorporating the expertise of rehab staff as part of overall SNF offerings, it’s possible for providers to create reliable revenue streams under PDPM.³

Provide Outpatient/Part B Care

Many patients develop such a strong rapport with rehab therapists that they want to continue care after they are discharged from SNFs into their own homes.

Since many SNF organizations have Medicare provider numbers that allow them to offer both Part A and Part B services, it’s possible for providers to leverage both inpatient and outpatient Part B rehab care as a secondary revenue stream.

Worth noting? The addition of outpatient services may trigger a Medicare review. As a result, it’s critical for SNFs to ensure treatment plan documents and patient care histories are up to date and available in the event of an audit.

Improve Direct Patient Engagement

Given the high satisfaction rate of patients in rehab therapy, it’s no surprise that this department can improve direct patient engagement.

This is critical both as a way to connect with patients who may be facing a frustrating combination of testing, bed rest, and general waiting during their stay in skilled nursing facilities and as the foundation for positive online reviews, which can both boost SNF reputation and encourage new patients to seek out care. 

Looking for ways to attract new SNF clients and keep them coming back? Start with the Net Health Patient Engagement Suite. 

REFERENCES:
¹ Centers for Medicare and Medicaid Services (CMS), “Patient Driven Payment Model,” December 1, 2021
² Center for Medicare Advocacy, “CMS Confirms Steep Decline in Therapy at Nursing Facilities,” May 6, 2021
³ CMS, “Fiscal Year (FY) 2023 Skilled Nursing Facility Prospective Payment System Proposed Rule (CMS 1765-P),” April 11, 2022
⁴ Physical Therapy Journal, “Patient Satisfaction With Musculoskeletal Physical Therapy Care: A Systematic Review,” January 2011