Respiratory care: PDPM implications for post-acute providers

Recent regulatory changes could lead to greater reimbursement for post-acute-care operators that provide respiratory care to their residents – and, consequentially, a greater demand for respiratory therapy equipment and supplies.

Under the Patient Driven Payment Model (PDPM), implemented Oct. 1, providers that treat people with greater clinical complexity – and whose care is especially resource-intensive — will be compensated for that care.

PDPM replaces the prior reimbursement system, RUG-IV, which calculated reimbursement for post-acute-care providers based largely upon the number of hours they spent providing physical therapy, occupational therapy or speech/language pathology therapy.

An uphill battle
The need for respiratory care in the post-acute-care setting was high prior to PDPM, said Michael Hess, president of the Michigan Society for Respiratory Care, an affiliate of the American Association for Respiratory Care, in an email to JHC.

“Unfortunately, the U.S. healthcare system doesn’t seem to be making much progress with these conditions, particularly in the post-acute setting,” said Hess, referring to respiratory illness. A recent study published in “JAMDA: The Journal of the Society of Post-Acute and Long-Term Care Medicine” found approximately 20% of people in long-term care had a diagnosis of chronic obstructive pulmonary disease, or COPD, he said.

“Data from the National Heart, Lung, and Blood Institute’s ‘Learn More, Breathe Better’ program suggests that roughly half of those people with symptoms go undiagnosed, so the number of people dealing with breathing problems in the post-acute setting is likely to be much higher,” especially factoring in other respiratory conditions, such as asthma, pulmonary fibrosis, pneumonia and lung cancer.

“The JAMDA article also supports other research that tells us that people with respiratory issues tend to have a variety of comorbid conditions, adding to the complexity of their care and markedly increasing their risk of readmissions and complications, and the overall cost of their care.

“Finally, the JAMDA article highlights an issue that plagues chronic disease management in many other outpatient settings, i.e., the fact that many clinicians are unfamiliar with best practice recommendations and/or don’t have the time or resources needed to implement them,” said Hess.

Reimbursement changes
“Ventilator and tracheostomy care automatically put residents in the highest reimbursement case-mix groups for the Nursing component of PDPM,” explains Melissa Sabo, chief operating officer, Gravity Healthcare Consulting, Cumberland, Maryland. In the “Special Care High” nursing case-mix group, either one of the following would qualify a resident for the second-highest nursing reimbursement under PDPM, she says:

  • COPD with shortness of breath while laying flat.
  • Respiratory treatment seven days per week, with a minimum of 15 minutes of face-to-face time provided each day by a respiratory therapist or an RN with respiratory training.

“If an operator can offer ventilator and tracheostomy services, it has a much greater chance of capturing all 100 days of Medicare eligibility for skilled nursing coverage, as not all operators in a given market typically can accept such patients,” she says.

Moreover, other respiratory modalities also boost a resident’s overall payment score in the nontherapy ancillaries (NTA) category. (Per CMS, “nontherapy ancillary services” refers to any ancillaries a provider uses other than therapy services, such as drugs, supplies and equipment — but not labor.) According to Sabo, residents with respiratory conditions and services could see increased NTA points for:

  • Ventilator or respirator post-admit care.
  • Asthma, COPD, chronic lung disease.
  • Cystic fibrosis.
  • Tracheostomy care post-admit.
  • Respiratory arrest.
  • Pulmonary fibrosis and other chronic lung disorders.
  • Suctioning post-admit.

“More and more providers are showing interest in pursuing a variety of ancillary services under PDPM to help drive appropriate and accurate reimbursement, improve the quality of services being provided to residents, promote outcomes, and help reduce liability and risk through improved documentation completed by the experts from the ancillary service vendors,” says Sabo. “Respiratory therapy is a key ancillary service that many providers are pursuing under PDPM with a renewed focus.”

Some providers rely on third-party respiratory vendors to help.

“Often, [respiratory vendors] are onsite for four to eight hours per day, unless ventilators are being used, in which case the facility must have a respiratory therapist onsite at all times,” says Sabo.

Quality first
“However, in either case, the nursing team must also be educated and equipped to handle the treatments and interventions that need to be provided outside of the time that the respiratory therapists are onsite or available.” Many respiratory vendors provide inservicing to staff to improve the clinical acuity and capability of the onsite nursing teams, she adds.

It’s true that caring for residents with a higher clinical acuity, including respiratory conditions, can result in increased reimbursement, says Sabo. “However, quality continues to be at the forefront of successful organizations. So communities must be able to treat efficiently, prevent rehospitalizations during and after the skilled stay, and facilitate a safe and effective transition to the next level of care for these higher acuity residents.

“One of the best things about PDPM is that it does a great job of fairly reimbursing the ‘good ones’ in our industry,” she says. “Putting the resident first has always been the right choice, and under PDPM, this approach usually leads to increased reimbursement as well.”

Respiratory care: A technology-centric practice

“Respiratory therapy continues to advance at the speed of technology across the healthcare continuum, and the SNF setting is no exception,” says Michael Hess, president of the Michigan Society for Respiratory Care, an affiliate of the American Association for Respiratory Care.

“Clinicians in this setting are called upon to manage ventilators (both invasive and non-invasive) to improve quality of life and assist breathing; monitor high-flow oxygen systems to facilitate respiration; administer a variety of nebulized medications; perform chest physiotherapy with high-frequency chest wall oscillation vests and cough-assist devices; and a variety of other highly specialized modalities using advanced technologies. This will absolutely continue into the next decade, as healthcare research continues to push the boundaries of what is possible outside the hospital, and as established technologies become even more portable.”

The need for skilled respiratory therapists in post-acute-care settings will increase, Hess predicted.

“By recognizing respiratory therapy as resource-intensive and requiring a unique, specialized skill set (and enhancing reimbursement accordingly), PDPM will empower SNFs to bring in dedicated respiratory therapists, rather than asking other clinicians to work outside their normal scopes of practice,” he said. “This is a win-win that will improve patient outcomes, enhance satisfaction (both patient and employee), and create vast new opportunities for interprofessional collaboration, all while reducing the cost burden on the SNF.”

How PDPM works

In the patient-driven payment model (PDPM), each patient is classified into one group for each of five case-mix-adjusted components: physical therapy (PT), occupational therapy (OT), speech/language pathology (SLP), non-therapy ancillaries (NTA) and Nursing. In other words, each patient is classified into a PT group, an OT group, an SLP group, an NTA group, and a Nursing group.

For each of the case-mix adjusted components, patients are assigned to one group, based on the relevant MDS 3.0 data for that component. There are 16 PT groups, 16 OT groups, 12 SLP groups, six NTA groups, and 25 nursing groups. PDPM classifies patients into a separate group for each of the case-mix adjusted components, each of which have their own associated case-mix indexes and base rates.

Additionally, PDPM applies variable per diem payment adjustments to three components — PT, OT, and NTA — to account for changes in resource use over a stay. The adjusted PT, OT, and NTA per diem rates are then added together with the unadjusted SLP and Nursing component rates and the non-case-mix component to determine the full per diem rate for a given patient.

Source: PDPM Calculation Worksheet for SNFs, Centers for Medicare & Medicaid Services,

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