3 min read

Not So Fast: The Truth About Those Initial PDPM Payment Boosts

By Prime Care Tech Marketing on Thu, Feb 13, 2020 @ 04:17 PM

Traditionally, additional revenue is a good thing. However, things aren’t always what they seem. Shortly after the Patient Driven Payment Model was implemented, skilled nursing facilities and nursing homes started reporting boosts in reimbursement. But many analysts are urging providers not to get used to the increased payments.

“The illusion of PDPM budget-neutrality is already over,” writes Michael Zimmet, President and CEO of Zimmet Healthcare Services Group. Zimmet contributed his thoughts on the future of skilled nursing for a January 2020 article in Skilled Nursing News. “We should enjoy the largesse while it lasts,” he continues, “but [we should] prepare for the inevitable correction long before 2020’s back-to-school sales are over.”

But why is PDPM leading to payment boosts in the first place? And what does that mean for future reimbursements?

When New Patients Aren’t New Patients

When the Patient Driven Payment Model was rolled out, most skilled nursing facilities and nursing homes saw an immediate boost in reimbursements. This was due to CMS counting all residents of a care community as new admissions, regardless of how long they had been already been there. Understandably, this rate boost won’t be replicated in the future.

Be Prepared for Inevitable Rate Adjustments

It seems that 9 is a magic number. According to Zimmet Healthcare Services Group, nine out of ten skilled nursing facilities saw a reimbursement boost after PDPM went into effect. On average, SNFs saw an increase of 9 percent or more in Medicare reimbursement. Because the model was designed to be revenue-neutral, industry experts expect that reimbursement rates will be recalculated soon.

The failed attempt at revenue-neutrality has many concerned that CMS could claw back reimbursements or adjust future payments to recoup losses. After all, the goal of model was to cut back on what it saw as inappropriate spending on therapy services that may not be needed.

Length of Stay Issues: When More Can Still Be Less

While per-diem rates are on the rise, the average length of stay is on the decline. This effectively erases any potential boost from per-day payment increases. In fact, CMS data shows that fee-for-service days have decreased by over 17 percent since 2010. Covered days per skilled nursing admission have also dropped by just over 7 percent.

As patient care and outcomes improve, lengths of stay are going to naturally decrease. Unfortunately, this also means that reimbursement will, as well.

What You Can Do to Protect Your Community

The best way to optimize your Medicare reimbursements is to check and double-check your data. Make sure that every diagnosis is captured and reported accurately so you don’t leave money on the table. Inaccurate recording can lead to missed Medicare payment opportunities.

PDPM was designed to be revenue-neutral. CMS didn’t plan to spend any more under this model than it did before. But that’s exactly what is happening, and we don’t expect it to keep happening for long.


Topics: Skilled Nursing Facility Medicare PDPM length of stay reimbursements
2 min read

Back to the Billing Basics in 2016 - Deductibles, Co-insurances, etc.

By Prime Care Tech Marketing on Thu, Jan 14, 2016 @ 06:26 PM

iStock_000036121056_Small.jpgIn the spirit of to our January 7, 2016 blog, we want to continue with the New Years’ resolution theme by concentrating on other important tasks every Post-acute Long Term Care AR manager should address. The following checklist can be helpful in steering your accounts receivables in a cash-positive direction for 2016:

  • Contract Management – Perhaps this is a good time to blow the dust off those payer contract file folders. Get to know the details and the impact they will have on cash flow for the next year. Do they include changes for 2016, such as reimbursement rates and contractual write-offs? Being familiar with and responding to such details can help AR managers more reliably predict payment requirements, amounts, and timing.
  • Co-insurance and deductibles – The ruleof thumb is if insurance is going to change, it will be at the beginning of the year. Specifically, check each payer’s copayments and deductibles. They typically seem to parallel Medicare guidelines which went into effect January 1st. The following table highlights some of these changes:

2016 Medicare rates at a glance

Part A Skilled Nursing Facility Coinsurance

$161 per day for days 21- 100 of Part A coverage

Part B Deductible and Coinsurance

Deductible - $166

Coinsurance – no change

Part C Rates

The rates and other billing terms are stipulated in the Medicare Advantage contracts

  • Patient liability – Not many states have fiscal years beginning on January 1, but in the event the states your facilities operate in do, then knowing what the patient liability rates will be and communicating them to Medicaid residents’ responsible parties will be helpful to collections. Even if the Medicaid fiscal year end is later, now may be a good time to review anticipated changes.
  • Contract folder and tickler file - If you haven’t already, we highly recommend that you set up a tickler file to effectively manage and track your payer contracts. Whether the tickler file is a traditional binder with physical folders or an electronic version, this is a good time to bring them up to date and to calendar critical changes and negotiation/renewal dates.

This list is small, but important. It will help you address not only these important revenue cycle management tasks, but also other tasks tied to your 2016 billing and collection goals.

Business Intelligence

Topics: contract folder Skilled Nursing Facility contract management co-insurance deductibles patient liability billing basics


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