COVID-19 pandemic leaves questions about effects of Medicare reimbursement restructuring in SNFs

Only a few months after CMS massively changed how skilled nursing facilities are reimbursed for therapy services, the pandemic hit and threw long-term care operations into a tailspin.

That makes it difficult to determine exactly how the change affected therapy services and therapists in nursing homes, researchers say.

A report published in Health Affairs on Monday shows that therapist staffing levels were cut in anticipation of and after the change to the patient-driven payment model in October 2019. The new model replaced the long-standing Resource Utilization Group payment system, known as RUG, with general support from the post-acute care industry. But, after the fourth quarter of 2019, there isn’t reliable data to further track the changes, the authors said.

As COVID-19 spread across the U.S., nursing homes were no longer required to report payroll-based data, leaving unknowns on the long-term effects of the PDPM transition on staffing levels.

Compared to July and August, staffing levels of physical therapists fell 5.5%, physical therapist assistants dropped 9.4%, occupational therapists decreased 6.1%, occupational therapy assistants fell 10.2% and speech-language pathologists slipped 4.3% during September through December 2019, according to the report. Those cuts were “almost entirely” to contract staff.

Contract staff represented 100% of the cuts to physical therapists, 92% for physical therapy assistants, 100% for occupational therapists, 93% for occupational therapy assistants and 133% for speech-language pathologists, the report found.

When PDPM was first implemented, Genesis Healthcare, a national chain provider, said 585 of its 10,000 rehabilitation employees were affected by the payment model change.

The American Physical Therapy Association said that “Prior to the pandemic, the implementation of PDPM had an impact on some therapists and therapist assistants’ hours in SNFs. Based upon perceived needs following PDPM implementation, as well as during the pandemic, it is likely that some providers decreased hours of therapists and therapist assistants while other providers did not.”

Despite therapist cuts, there were limited staffing increases across other positions; there weren’t any gains for occupational therapist aides, registered nurses or licensed practical nurses. There was a 3.2% increase in physical therapy aides and 0.4% increase in certified nursing assistants.

The previous Medicare reimbursement model covered up to 720 minutes of therapy for each patient per week, which critics say incentivized excess therapy. The PDPM model bases reimbursement on a patient’s condition and what care is needed. It also relaxed some of the rules around group therapy, allowing up to 25% of a patient’s therapy to be in group sessions. The report found that group therapy sessions increased after the PDPM transition, likely replacing more one-on-one therapy sessions.

“It is unclear, however, whether reductions represent a “right-sizing” of therapy departments that were previously designed to deliver financially motivated therapy of limited clinical benefit or a form of skimping that limits patients’ access to needed rehabilitation services,” the authors wrote.

The American Physical Therapy Association said group and concurrent therapy largely stopped during the pandemic, making it difficult to tell whether the type of therapy being offered has changed, either from PDPM or the pandemic.

“After the public health emergency concludes, we may see the resurgence of group and/or concurrent therapy,” the association said.

Brian McGarry, assistant professor in the division of geriatrics and aging at the University of Rochester’s Department of Medicine and one of the report’s authors, said the report only gives “one snapshot of PDPM around staffing.”

“We know some facilities shed therapy staff in response to PDPM. What we don’t know is what does that mean for patients, how does that change the amount of therapy delivered,” McGarry said.

The American Health Care Association and the National Center for Assisted Living, which represents more than 14,000 long-term care facilities, could not be reached for comment.

McGarry said patient-level data that breaks down how therapy was delivered was just released, which will give researchers some insight into how patient care changed in the first few months of PDPM.

“With COVID, the data on PDPM changes will be hard to determine,” a spokesperson for the American Physical Therapy Association said.

PDPM was meant to be budget neutral but cuts to staff without corresponding increases in other staffing means that nursing homes are “probably coming out a little ahead,” McGarry said, noting that the lack of hiring could be a “yellow flag” worth watching.

“If you’re accruing cost savings, what are you doing with the money you’re not spending on them anymore?” McGarry said.

But given how underfunded nursing homes were found to be during the pandemic, “that may not necessarily be a bad thing,” McGarry said. CMS also plans to readjust payment rates as needed.