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PDPM Analysis – 2 Years Later

It’s been almost two years since the implementation of PDPM. However, since 2020 was so fraught with challenges from the COVID pandemic, almost no one had the opportunity to take stock of how they had fared last October, at the one-year mark. As we approach the second anniversary of the greatest change in Medicare reimbursement in more than 20 years, the industry is pausing to see how things have gone.


Finance gurus tell us the vast majority of short-term rehab providers have seen improvements in their average daily rates since October 2019. But financial analysis tells only part of the story. Both nursing and rehab services have weathered a dramatic shift in their responsibilities under PDPM, with a virtual role reversal from the days when nursing provided supportive documentation to justify therapy interventions, to the current situation in which rehab must provide evidence-based tests and measures to reinforce the validity of nursing assessments to achieve correct PDPM CMI.

The rise of average daily reimbursement has been beneficial for short-term care providers but indicates this transition did not go as CMS had intended- that PDPM has not proven to be budget-neutral. But, what of clinical outcomes under the new payment model? Our industry has seen a consistent erosion of service delivery in an environment devoid of specific minute guidance for rehab services, and a slow deterioration of short-stay QMs. 

What Should Be Done About It?

Short-term rehab providers may want to dig a bit deeper if their rehab clinicians are care planning in a way that suggests greater concern for the cost than patient outcomes. A precious few rehab providers have responded to the implementation of PDPM by developing clinically-driven assessment processes which directly correlate to patient need and acuity to provide care plan guidance, to include clinical and utilization pathways for rehab professionals.

As CMS once again proposed changes to the prospective payment system in an attempt to gain the budget neutrality promised but not achieved, patient outcomes have never been more important. It is incumbent on short-term rehab facility operators to be able to justify the care their teams are providing, and the reimbursement they receive for these services. 

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