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SNF PROFITABILITY UNDER PDPM

Updated: Apr 26, 2019


Denoted as budget-neutral, will SNF providers be able to realize positive margins under PDPM? We won’t be able to glean the actual implications of PDPM on profitability until we have sufficient data that can be analyzed following the October 1st go live date.  But one thing can be certain, inevitably there will be winners and losers.


PDPM is initially designed to be budget neutral for CMS but not necessarily for individual providers. It is important to realize there will be winners and losers predicated on historical referral and practice patterns. The types of patient acuities, care protocols, and therapy/nursing utilization are primary determinates for an individual facility’s PDPM financial impact. Assuring you have systems in place to identify, capture and code items that previously didn’t impact reimbursement will be key.

It’s essential to understand the financial implications of PDPM prior to October 1. There are tools available currently to crosswalk historical service delivery from a RUG IV rate to a projected PDPM rate to assess and analyze your specific financial implications. However, caution should be applied, as assumptions of input data are used to pivot from one reimbursement system to another.

Operational strategies will likely need to shift. Of particular importance will be accurately capturing reimbursement for the services we are providing. The amount of therapy services, quality of rehab care, state-of-the-art techniques and rehab equipment will remain primary census drivers for patients, families, physicians and case managers. Therapy is a key success component for assuring quality outcomes and guaranteeing patient satisfaction which significantly impact a SNF’s census and therefore margins.

As a therapy provider, we and others in the industry look forward to being part of this change and evolving towards value and away from volume.

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