The brand new Medicare cost mannequin for nursing houses was designed to remove the temptation to make key care selections primarily based solely on reimbursements, and never on particular person residents’ wants.
Although the early outcomes from the Affected person-Pushed Fee Mannequin (PDPM) have largely been optimistic for the business, a bunch of researchers this week raised issues concerning the potential for equally problematic incentives below the brand new system.
“The PDPM brings welcome modifications to SNF reimbursement by prioritizing affected person wants over service quantity, nevertheless it additionally carries the danger of recent unintended penalties,” the group wrote of their evaluation, revealed Monday within the April version of the American Journal of Managed Care. “These potential issues, that are options of different value-based cost programs, must be carefully monitored and rigorously studied.”
The commentary — titled “The Affected person-Pushed Fee Mannequin: Addressing Perverse Incentives, Creating New Ones” — does comprise some reward for PDPM’s enchancment over the previous Medicare cost system for nursing houses, whereas additionally taking difficulty with among the levers that operators can pull to probably elevate complete reimbursements.
“The PDPM has launched new incentives that could be problematic, probably resulting in unintended penalties,” the researchers wrote.
Specifically, the evaluation highlights the unequal weighting of sure resident circumstances when calculating cost charges below the non-therapy ancillary (NTA) class.
“Sure co-morbidities and companies on this cost part can drastically enhance reimbursements, and so they thus carry the danger of being over-reported and over-utilized,” the workforce famous. “An SNF situated in an city space, for example, receives per-diem funds which can be $175 greater in the course of the first three days for a affected person with diabetes and continual obstructive pulmonary illness in contrast with funds for a affected person with out these two circumstances.”
The workforce additionally identified the vastly elevated funds that expert nursing services obtain for the primary three days of a resident keep, when their wants — and, by extension, operator prices — are probably highest.
Based mostly on these incentives, the researchers argue, expert nursing services may start selectively admitting residents with extra acute wants than different sufferers, whereas additionally discharging folks dwelling quicker as a result of gradual decline in reimbursement charges over time. As a result of remedy not generates direct funds, the group additionally identified the potential for under-provision of remedy.
“Whereas the RUG system incentivized longer SNF stays and extra remedy, the PDPM incentivizes shorter stays with much less remedy by an adjustment issue for bodily remedy, occupational remedy, and non-therapy ancillary circumstances and companies,” they wrote.
Issues over unsafe reductions in remedy below PDPM made it to the mainstream media shortly after the mannequin’s October 1 introduction, with the New York Occasions publishing a bit highlighting the potential for remedy cuts in late November.
However as business leaders — and the researchers themselves — have identified, the brand new mannequin was largely a response to controversies concerning the improper over-provision of remedy below the previous Useful resource Utilization Group (RUG) mannequin, which offered direct incentives for operators to achieve sure remedy quantity thresholds.
“Between 2002 and 2016, the usage of the ultra-high class elevated from 7% to 63% of all SNF days reimbursed by Medicare — a nine-fold enhance,” the researchers famous, referring to the extent of remedy that offered the best reimbursements to operators below the RUG system. “There was no corresponding change in case combine throughout this era.”
Shifting ahead, the group beneficial that the federal government carefully monitor supplier habits for any proof of improper care primarily based on PDPM cost incentives.
“Policymakers ought to keep shut oversight of SNF billing practices and affected person outcomes because the PDPM takes impact to mitigate potential unintended penalties,” the workforce concluded.