June 5, 2018 | Net Health

3 Minute Read

Survey Says: PDPM Is an Improvement Over RCS-1


When CMS replaced RCS-1 with the Patient-Driven Payment Model (PDPM) in April, we analyzed the proposed new payment model for skilled nursing facilities (SNFs) and concluded the following: PDPM offers important revisions and advantages over RCS-1, but the essence of the system is very much the same. In fact, PDPM could be aptly named RCS-1.1 (check out our overview of PDPM to learn more).

However, we were curious. What do therapy providers think? We set out to gather initial reactions to the change in a recent survey of 134 therapy professionals. As it turns out, most believe that it is—67% of respondents say that PDPM is an improvement over RCS-1. Given how much concern RCS-1 inspired (with good reason), this change in heart is positive news for the industry.

The following includes other key findings:

Therapy providers believe they’ll be ready for PDPM

PDPM won’t become effective until October 2019, giving providers more time to prepare than what was originally proposed under RCS-1. Most respondents (67%) believe that the delayed implementation date will give them enough time to prepare for the changes.

This is surely good news to many therapy providers who would have been struggling to meet the October 2018 implementation date for RCS-1. According to a survey we conducted on RCS-1 just before PDPM was announced, nearly half of the respondents (48%) said they hadn’t started preparing yet, and the majority (78%) were counting on a delay in the ruling. Fortunately, they were right.

The majority of respondents believe PDPM will tie reimbursement to patient outcomes

Similar to RCS-1, PDPM does not currently tie reimbursement to outcomes data. However, the healthcare industry as a whole has been moving toward value-based payments where providers are reimbursed based on the quality of care, rather than volume of services. With the elimination of therapy minutes as the basis for payment under PDPM, indications are that the proposed payment rule is on a similar path. This is certainly the view of survey respondents; 96% believe that PDPM will eventually tie reimbursement to patient outcomes. When this will happen, however, is a matter of debate.

  • 17% say it will happen in the PDPM Final Rule for FY-2020 (effective October 2019)
  • 61% say will happen within the next two years (for FY-2021 or FY-2022)
  • 18% say it will happen, but not within the next three years

It is expected that Section GG data will be the key to outcomes-based payments

 With the inclusion of Section GG data in PDPM, the majority of respondents (85%) believe that CMS will use Section GG data, not CARE data (12%), to create an outcomes-based model for reimbursement.

These results appear to answer a long-standing question within the therapy community. For years, many thought payments for quality performance would be tied to CARE data. But since the introduction of Section GG in 2016, which is required reporting for SNFs, it became less clear what direction CMS planned to take. This lack of clarity has played out among providers, with some having their therapists report on Section GG data, some using CARE data and others using nothing at all.

With Section GG data being incorporated across SNF, long-term care hospital (LTCH), inpatient rehabilitation facility (IRF) and home health (HH) care settings, CMS is paving the way to greater coordination, visibility and value-based care across the post-acute care continuum.

It remains to be seen how outcomes-based payments will be implemented and when, but change is coming. Therapy providers will need to stay on top of both CMS and Congressional legislation changes that could implement outcomes-based payments in order to plan for a successful transition. In addition to relying on industry sources, such as the Acumen PDPM Technical Report and the CMS PDPM Calculation Worksheet, they should look to their therapy software providers to help them understand how reimbursement will impact their business and strategies they can take to ensure success.

For more information on PDPM and how it will affect your therapy business, be sure to watch our webinar: Goodbye RCS-1, Hello PDPM!


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