Demystifying Value-Based Care in Skilled Nursing, Senior Living, and Post-Acute Rehab Therapy

From patient physicians and on-site nursing teams to facility owners and administrators, everyone plays a role in the current transition toward post-acute value-based care models. 

Whether managing patient recovery in a skilled nursing facility (SNF) or providing wellness checks and preventative services at an assisted living facility (ALF) or senior living community, offering quality, cost-efficient, and patient-centered care requires extensive collaboration between multiple teams. 

Though challenging, such collaboration can result in far-reaching benefits for SNFs and ALFs/senior living communities. Those excelling in delivering value-based care have stronger reputations, which makes them more attractive to future residents and supports partnerships with other local healthcare providers. 

Post-acute facilities that embrace value-based care and payment models are also better positioned to thrive through the regulatory changes, payment reforms, and emerging healthcare trends that define today’s changing healthcare landscape. 

Rehab therapy programs play a significant role in this collaboration and evolution toward value-based care. Services provided within these settings by physical therapists (PTs), occupational therapists (OTs), and speech-language pathologists (SLPs) are key in enabling facilities to better focus on value-based efforts that deliver high-quality care while optimizing resources and outcomes. 

This section of the e-book, “The Rising Tide of Value-Based Care,” discusses the various ways rehab therapy impacts the successful implementation of value-based care methodology in skilled nursing and assisted living facilities. This includes the critical role therapists play in supporting value-based payment programs that impact today’s post-acute facilities. 

The Role of Rehab Therapy in Post-Acute Settings  

Skilled nursing facilities and assisted living/senior living communities are each vital in caring for older adults and people with disabilities.  

“The way that rehab therapy does this is going to be very similar in all of these programs, meaning we’re going to keep people moving, we’re going to help them go home, and we’re going to keep them out of the hospital,” said Holly Hester, PT, DPT, CHC, CHPC, Senior Director of Client Experience for Net Health. “We’re going to keep them moving around so they can be as independent as possible.” 

“How can rehab therapy be a positive drive for reimbursement and efficiency? The way they do this is going to be very similar in all [post-acute] programs. We’re going to keep people moving, we’re going to help them go home, and we’re going to keep them out of the hospital. We’re going to improve their quality of life. And, we’re going to keep them … moving around so they can be as independent as possible.”

But while SNFs provide 24-hour comprehensive medical care and rehabilitation services for patients in transition, ALFs offer independent living with help, as needed by individual residents, for activities of daily living (ADLs). 

Despite these differences, however, rehab therapy teams typically can (and often do) support value-based care efforts that impact SNF patients and ALF residents in similar ways. These include: 

  • Providing Patient-Centered Care: Studies show that a patient-centered approach to care enhances satisfaction, adherence to treatment plans, and overall outcomes. To achieve this, rehab therapists regularly engage residents in shared decision-making. They do this by considering the personal life circumstances and goals of the patient, and then tailoring interventions accordingly. 
  • Promoting Preventative Strategies: In both settings, rehab therapists play important roles in prioritizing preventative strategies that reduce the risk of falls, functional decline, and other avoidable complications among patients and residents. This may involve conducting regular assessments, implementing fall-prevention programs, promoting mobility and exercise initiatives, and offering generational education and guidance. 
  • Optimizing Functional Abilities: By developing personal rehabilitation plans, using evidence-based treatments and interventions, and collaborating with other healthcare professionals to address barriers to progress, rehab therapists help patients and residents work toward optimizing functional abilities and personal independence. 
  • Utilizing Outcome Measures and Other Data: Both SNF and ALF rehab therapy teams utilize outcome measures, quality indicators, and performance metrics to assess the effectiveness of their treatments and interventions, track patient progress, and drive continuous quality improvement initiatives. In doing so, rehab therapists focus on evidence-based practices, adherence to clinical guidelines, and data-driven decision-making to optimize care delivery. 
  • Collaborating with Multiple Teams: By naturally and effectively collaborating with nurses, physicians, families, social workers, and other team members, rehab therapists ensure coordinated and comprehensive care that addresses the diverse needs of residents and patients. 

The Differences Between SNF and ALF Rehab Therapy 

The primary differences between rehab therapy services provided in skilled nursing facilities versus those offered in assisted/senior living communities lie within the overall scope of care. 

Within SNFs, rehab therapy teams typically offer more intense rehabilitative care to patients recovering from acute illness, injury, or surgery. Within senior living communities, however, rehab therapists mostly offer supportive care and quality-of-life services to residents who, in some cases, may require help with activities for daily living. 

Other important differences between SNFs and ALFs that drive the quality, scope, and value of rehab therapy care provided at post-acute facilities include: 

  • Patient Populations: Rehab therapy teams in SNFs often serve patient populations that include people with complex medical needs, multiple comorbidities, and higher acuity levels requiring intense rehabilitation services. Assisted/senior living rehab therapy teams typically work with residents who are generally more independent but may require assistance with the management of chronic conditions (i.e. arthritis, heart disease, osteoporosis, hypertension, etc.), personal care, mobility, and cognitive stimulation. 
  • Rehab Goals: Skilled nursing rehab teams often play a key role in discharge planning, and post-acute care coordination, ensuring smooth transitions between acute care settings, rehabilitation, and community living. In contrast, assisted/senior living rehab therapists focus more on maintaining residents’ functional abilities, promoting aging in place, and providing ongoing support within the assisted living environment. 
  • Regulatory Requirements: Finally, skilled nursing therapy teams must adhere to specific regulatory requirements, such as Medicare reimbursement guidelines, certification standards, and compliance with skilled nursing facility regulations. Assisted living therapy teams may operate under different regulatory frameworks, with a focus on meeting state licensing requirements and facility-specific policies. 

Aligned with these compliance standards are different value-based payment programs that incentivize the implementation of value-based care models within each type of facility. 

For skilled nursing facilities, 2018 marked the launch of the Centers for Medicare and Medicaid Services’ (CMS) most current value-based payment effort, the SNF Value-Based Purchasing (VBP) program. A program that impacts facility reimbursement levels for Medicare Part A patients, the SNF VBP program was established to improve the overall quality of care—including rehab therapy care—provided to SNF patients. 

Scoring for the program is currently based on a single quality measure: 30-day all-cause readmissions. 

In contrast, rehab teams working in assisted/senior living communities are incentivized through a program that is likely familiar to many outpatient rehab therapists. As most ALFs partner with third-party practices that provide rehab therapy care to their residents under Medicare Part B—through in-home care or an on-site satellite office—clinicians can participate in the Merit-based Incentive Payment System (MIPS). 

SNF Value-Based Payment Programs 

In the late 1990s, Medicare implemented a prospective payment system for skilled nursing facilities that included pay rate adjustments heavily weighted by the volume of rehab therapy services provided to patients—whether they truly needed it or not. This, of course, led to SNFs providing more intensive therapy services which led to higher per-diem payments from Medicare. 

As the healthcare industry began to adopt more value-based care principles, CMS created a new program in 2019 that removed therapy minutes as a driving force for payments. Called the Patient Driven Payment Model (PDPM), the program instead focused on “clinically relevant factors that account for medical complexity and functional status.” 

The result of PDPM’s implementation was a near-immediate drop in therapy minutes for SNF patients. Perhaps surprisingly, this drop ultimately did not lead to a decline in patient outcomes or a surge in readmissions, a clear sign that incentives drove the overuse of rehab therapy under the previous structure. 

The SNF Value-Based Purchasing (VBP) Program  

Around the same time the PDPM program was implemented, in part, to discourage the overuse of rehab therapy in skilled nursing, CSM implemented a value-based payment program to boost patient-centered care efforts and incentivize improvements in the value of services offered to SNF patients.  

The SNF Value-Based Purchasing (VBP) program, launched in the fall of 2018, was established to reward facilities that provided the highest quality of care while penalizing those that performed poorly. And the program was designed to induce mandatory participation by all SNFs. 

It does this by holding back a flat 2% of every SNF’s Medicare Fee-for-Service Part A payment, called a “withhold.” This creates a funding pool for the budget-neutral SNF VBP program, most of which is paid back to high-performing facilities based on a single outcome measure: their 30-day all-cause readmission rate. This rate is determined through the Minimum Data Set (MDS) and claims-based measures already being reported to CMS. 

The Role of Rehab Therapy in the SNF VBP Program  

While the reimbursement incentives determined through the SNF VBP program may not directly impact the rehab therapy services, the rehab team plays a critical role in the care, progress, and successful and safe discharge of skilled nursing facility patients. 

“There’s research out there that shows that patients who go home needing assistance with their activities of daily living (ADLs) are more likely to go back to the hospital,” Hester said. 

One recent study concluded that ADL limitations are the most important predictors of 30-day hospital readmissions

Facilities with high rates of readmission receive “negative incentives,” meaning they pay into the program but get no return. Currently, between 69% and 72% of all SNFs earn negative incentives. 

“If you take grandma home and she can’t get out of a chair by herself, the chance of her going back to the hospital because she’s fallen or she gets weaker is going to be a lot higher,” Hester continued. “Or maybe it’s because she’s not eating because she can’t get around the house by herself, or she develops a [urinary tract infection]. There are so many medical reasons for readmission, and then there are functional reasons. Physical therapy, and specifically occupational therapy, can directly impact those things.” 

 CMS plans to adopt additional outcome measures to the SNF VBP program in the coming years. Some of these new measures relate to nursing staff and turnover, while others focus on fall rates and functional scores—both clearly impacted by rehab therapy interventions. Data for these measures is currently being collected and will impact payments starting in the fiscal year 2026.  

The Impact of Value-Based Care on SNF Rehab Therapists 

As the SNF VBP program expands and rehab therapists play an increasingly vital role in healthcare reimbursements for these facilities, rehab therapy departments will be impacted in meaningful and challenging ways. From improved collaboration to the implementation tools that improve efficiency and tracking, SNF administrators are likely to rely more heavily on the services and expertise rehab therapists provide their patients. 

Enhanced Patient Outcomes 
At the core of value-based care is the commitment to improve patient outcomes. This will require SNF rehab therapy teams to increasingly focus on achieving measurable improvements in patient health, from optimal mobility and reduced pain levels to improved functional capabilities. 

The value-based care model encourages rehab therapists to ensure they always offer patient-centered care tailored to the individual needs and recovery goals of each patient. With this comes an improved understanding of patient stories and outside factors that may affect post-discharge outcomes. This involves learning and considering social determinants of health that play a significant role in the long-term health of patients. 

Financial Incentives 
As the SNF VBP program expands into considering more functional and meaningful measures, administrators could determine that investing more in rehab therapy services will produce a significant return on investment (ROI). This would be great news for rehab therapy departments that may struggle with staffing, retention, and investing in tools and technologies may help them provide more effective and efficient services. 

With a greater investment, though, comes greater scrutiny. As always departments must carefully manage resources to avoid unnecessary expenses while still providing the level of care required to achieve the best outcomes. At the same time, improved tracking and reporting systems must be put in place that enable SNF leaders to better monitor productivity, efficiency, outcomes, and other key performance indicators (KPIs) that align with success. 

Technological Integrations 
To effectively implement value-based care models, SNF rehab therapy departments are increasingly turning to technology. Advanced software solutions, including electronic health records (EHRs) and outcomes management software, are critical for tracking patient progress, outcomes, and therapy efficacy.  

These tools not only facilitate more precise and efficient care planning, but they also help report outcomes to payers (for value-based payment programs) as well as administrators who allocate annual department funding. 

Interdisciplinary Collaboration 
The focus on comprehensive care outcomes under value-based care promotes greater collaboration among healthcare professionals practicing in SNFs. Rehab therapists often work more closely with nursing staff, physicians, and other specialists to ensure a coordinated approach to patient care. 

Interdisciplinary collaboration helps in creating a seamless care continuum where every aspect of the patient’s health is considered when developing treatment plans. This level of collaboration is essential for addressing the complex needs of patients in SNFs, who often present multiple comorbidities that can impact rehabilitation. 

As value-based care continues to evolve, it’s also important that rehab therapists remain informed and educated about the latest evidence-based practices while learning how to use new tools and technologies to support outcome-based care. This applies to all rehab therapists, including those working in skilled nursing. 

Value-Based Payment Programs in Senior Living Rehab Therapy 

As established earlier, the role rehab therapy plays in assisted/senior living communities is much more management- and prevention-oriented when compared with therapy in skilled nursing. And as senior living facilities focus on resident independence, the belief in many smaller communities is that residents can seek out their own rehab therapy services whenever needed. 

However, an increasing number of senior living communities are realizing the benefits of partnering with an outpatient rehab therapy practice to provide on-site rehab services, either via in-home visits or the opening of a satellite clinic on the grounds. The goal is to help residents promote greater mobility, independence, and longevity; manage chronic conditions; and lower the risk of preventable incidents like falls. 

And as the “Silver Tsunami” approaches—the number of people 65 and over in the U.S. is expected to grow 47% by 2050—payers are also beginning to appreciate the value of assisted living. ALFs and senior living communities reduce costs for public health programs like Medicare and Medicaid, making them the most cost-effective model for professional caregiving

Therefore, it’s advantageous for payers to promote the longevity and independence of senior community residents, for which rehab therapists play a critical role. 

The Role of MIPS in Senior Living Communities/ALFs  

Since senior living communities tend to partner with private, independent practices (i.e. contract therapy practices) that provide rehab therapy services to their residents, these providers are likely to participate in Medicare Part B. This makes them eligible, or perhaps makes them required, to participate in the Merit-based Incentive Payment System (MIPS). 

A value-based payment program for private practice rehab therapists and their clinics, MIPS requires that participating rehab therapists report on various quality measures based on quality of care, improvement activities, interoperability, and cost. Based on these performance scores, rehab therapists may receive positive payment adjustments, bonuses, or face negative payment adjustments. 

Learn more about how MIPS reporting works in our last chapter. 

According to Robert Clark, PT, DPT, PSM, PSPO, Senior Product Manager at Net Health, rehab therapy providers working with assisted living communities choose from the same set of MIPS quality measures as they would in their private clinics. The measures may vary, though, depending on the types of services they provide and their focus of care within each setting. 

“Providers in assisted living communities may prioritize measures related to chronic disease management, fall prevention, or care coordination,” Clark said. “While those in private clinics may focus on measures related to specific procedures, screenings, or interventions.” 

However, he added that MIPS scoring thresholds and payment adjustments apply uniformly to all eligible clinicians regardless of where they provide care (i.e. in the clinic, in a resident’s home, or at a satellite site). 

Providers may also opt to report through CMS’ first rehab-specific MIPS Value Pathway (MVP). Titled “Rehabilitative Support for Musculoskeletal Care,” the MVP includes a subset of 10 quality measures—seven that use Focus On Therapeutic Outcomes (FOTO) measures—and 17 improvement activities that are meaningful for physical and occupational therapists. 

Read Chapter 1 for specifics about MVPs. 

The Impact of Value-Based Care on Senior Living Rehab Therapists 

Perhaps one of the more significant impacts value-based care may have on private practice rehab therapists who provide services to senior communities is MIPS. By taking on more Medicare Part B patients, providers may reach the minimum threshold criteria that make participation in MIPS mandatory. 

Once this threshold is met, providers and practices can earn positive, negative, or neutral payment adjustments based on how they perform within the four performance categories of quality, cost, improvement activities, and promoting interoperability. 

MIPS Threshold Criteria 

Rehab therapy providers who meet certain criteria related to billing Medicare Part B, seeing Medicare Part B patients, and providing covered professional services are required to participate in the MIPS program. For MIPS to be mandatory, providers must meet all three of the following criteria

  • Bill more than $90,000 a year in Medicare Part B charges 
  • Provide care to more than 200 Medicare beneficiaries per year 
  • Provide more than 200 covered professional services under the Physician Fee Schedule 

These thresholds are for the mandatory reporting of individual practitioners. However, if a practice collectively exceeds just one of these thresholds, they may opt into MIPS as a group. This makes them eligible for payment adjustments of plus or minus 9%,  depending on the strength of their outcomes. 

Data Reporting 

As within other care settings, participating in a value-based payment program like MIPS requires an investment in outcome management solutions, preferably one that seamlessly integrates within specific EHR systems. Together, these systems collect and track data around patient outcomes and quality care. 

When considering outcome tools for value-based care, look for systems that are Qualified Clinical Data Registries (QCDR). There are CMS-approved vendors that specifically collect clinical data and report this data to CMS for the purpose of MIPS. QCDRs are technology-based, yet they often provide additional support that helps clinicians choose the right measures to report, understand the MIPS scoring system, and make informed decisions to improve scores and quality of care. 

Overall, the impact of value-based care on rehab therapist and rehab therapy departments that provide services in post-acute settings is multifaceted. This model for increasing value while lowering costs affects financial structures, operational strategies, and the way multidisciplinary teams collaborate. 

Yet, transitioning to this model will be challenging, the potential for improved patient outcomes and more sustainable healthcare delivery presents a compelling case for the adoption of value-based care. As the healthcare landscape continues to evolve, embracing this model for care can position rehab therapists to lead the way in delivering efficient, effective, and patient-centered care.