PDPM (Patient Driven Payment Model) aka RCS v2, aka RCS lite, aka Provider Driven Payment Model (my personal favorite), aka the worst thing ever for therapy, etc.

I remember when PPS (Perspective Payment System) came and many thought this was the worst thing ever for therapy.  Many companies declared bankruptcy. (The one I worked for was one of them.) Others simply quit the business of therapy as they saw no future/profit in it.  PPS did dramatically affect the labor market.  Some good therapists got out of the business at that point, others stayed in the business of caring for others but took significant pay cuts.  Looking back, we all wrung our hands and said “how will we ever manage this?”  After quite a few years, we all managed it pretty well while providing good care to the resident.  I believe PDPM will be like that.  We will have to learn creative ways to get as good or better outcomes for less money (and we will).  Therapy is not going away because it is good for the resident.  Therapy is critical when it comes to getting good patient outcomes and good patient satisfaction. Both will be very important to the provider.

I read one article that said PDPM will decrease Medicare Part A minutes and therapy company revenue by 40% and this may be a conservative number.  I think that is correct. Under PPS therapy is good for the patient and a revenue producer.  Under PDPM therapy is good for the resident and a cost.  I think you can see the issue.  Medicare Part A minutes provided under PDPM will look more like the minutes provided under replacement plans that don’t pay by the RUG in other words, less therapy is provided.  Also, with Group and Concurrent treatment are capped at 25%, the labor needed to do the treatment will also decrease.  You may think this is the worst thing ever for therapy.

I also believe in numbers.  The bad news for therapist is there will be less therapy given per Medicare Part A participant.  The good new for therapist is there will be many, many more participants.  The baby boomers are getting old.  The “silver wave” is upon us.  In skilled nursing, our patients are generally 65 and older.  In 2012 there were slightly over 43 million Americans over 65.  By 2020 the census bureau says there will be 56 million Americans over the age of 65.  By 2030 there will be close to 73 million Americans over 65. And by 2050 there will be close to 84 million Americans over the age of 65.

If we do less therapy per participant, but we have many more participants this may not be quite as bad on therapy and therapists in the long run.  The challenge we face is to think of creative ways to get as good or better outcomes for less money per participant.  I am confident as an industry we can do this. I am also confident that the ones who figure this out the quickest will do the best, just like PPS.