Pulse Check on the Patient Driven Payment Model

The Patient Driven Payment Model went into effect October of last year. Unlike the previous model, which was based on minutes of services and may have encouraged unnecessary services, the new model is based on acuity and anticipated resources needed during a patient’s stay. Part of the intention is to ensure that facilities approach residents’ care more holistically.

After the first two billing cycles passed, KLAS did a quick pulse check on what happened for providers during this change. We reached out to long-term care (LTC) providers to find out how smooth the transition has been and how provider organizations have been financially impacted. This “check-in” data was compiled into our recently published PDPM Flash Insights report. 

So Far So Good

We were happy to hear that vendors overall did a pretty good job of preparing their providers for the shift. Small organizations did have more bumps and more road rash. Large organizations experienced fewer bumps likely due to their experience with payment model shifts and having more resources. There were definitely some hiccups, but overall, providers seemed ready to gowith the new model.

We were a little surprised that the financial impact was so positive. I would hypothesize that the payment model is going to slowly get “corrected.” From working as a provider, I’ve seen Medicare set a payment amount and then cut away at it, so I would expect something similar with PDPM in which Medicare starts somewhere but eventually gets to a place that is good for them (eventually creating smaller margins for providers). Though the transition to PDPM went smoothly, providers should do everything they can to be efficient and prepare for possible changes.

 Keep a lookout for KLAS’ next Flash Insights report, which will focus on how home health vendors and providers have been affected by CMS’ Patient Driven Groupings Model, which took effect January 1 of this year.




     Photo credit: Adobe Stock, Tyler Olson