Understanding the PDPM for Occupational Therapy in Skilled Nursing Facilities

Under the Patient-Driven Payment Model (PDPM), the Occupational Therapy (OT) component represents a critical aspect of patient care and reimbursement in skilled nursing facilities. PDPM, introduced by the Centers for Medicare & Medicaid Services (CMS), shifts the focus from the volume of services provided to the patient's clinical characteristics and needs. This model encourages a more patient-centered approach to care, ensuring that therapy and services are tailored to individual patient outcomes rather than the quantity of therapy minutes provided. Here's a comprehensive overview of the OT component within PDPM:

1. Objective of the OT Component in PDPM

The OT component under PDPM aims to accurately reflect the therapy needs of patients based on their clinical condition and functional status. By doing so, it ensures that patients receive appropriate, efficient, and effective occupational therapy services that are crucial for their rehabilitation and quality of life.

2. Determining the Case-Mix Group (CMG)

Patients are classified into one of 16 OT Case-Mix Groups (CMGs) under PDPM. This classification is based on a combination of the patient's primary diagnosis and functional abilities, which are assessed through specific items in the Minimum Data Set (MDS), including Section I (Diagnoses) and Section GG (Functional Abilities and Goals).

3. Calculating the Payment  

The payment for the OT component is determined by multiplying a base rate by the case-mix index (CMI) associated with the patient’s OT CMG. The CMI reflects the relative resource utilization associated with the CMG, ensuring that reimbursement aligns with patient needs.

4. Variable Per Diem Adjustment

PDPM introduces a variable per diem (VPD) rate adjustment, which adjusts the payment rate over the course of the stay. For the OT and PT components, the adjustment factor decreases over time, reflecting CMS's analysis that resource use for these services tends to decrease as the patient progresses through their stay.

5. Clinical Categories           

Patients are assigned to clinical categories based on their primary diagnosis, which then influences their CMG classification. The clinical categories relevant to the OT component include conditions such as major joint replacement, stroke, and non-surgical orthopedic/musculoskeletal conditions.

6. Functional Scoring

Functional scoring, derived from Section GG of the MDS, is a crucial factor in determining the patient's CMG. It assesses the patient’s ability to perform activities of daily living (ADLs) and mobility tasks. Higher levels of independence are associated with different CMGs than lower levels of independence, affecting the CMI and, consequently, the reimbursement rate.

7. Impact on Therapy Delivery

PDPM encourages facilities to provide therapy based on the patient’s individual needs, potentially changing how therapy services are delivered. Facilities might use more group and concurrent therapy sessions as part of their care models, as long as these approaches meet the patient's needs effectively.

8. Documentation and Accuracy

Under PDPM, accurate documentation and coding in the MDS are paramount. Facilities must ensure that diagnoses are correctly coded and that functional scores accurately reflect the patient's status to ensure appropriate reimbursement.

9. Professional Development and Training

Occupational therapists and other healthcare professionals need to be familiar with PDPM's requirements, including understanding the importance of accurate ICD-10 coding and functional assessment. Ongoing education and training on PDPM are crucial for ensuring compliance and optimizing patient outcomes.

PDPM represents a significant change in how skilled nursing facilities approach patient care and reimbursement. The OT component underscores the importance of individualized care planning and delivery, emphasizing the need for a detailed understanding of each patient's unique clinical and functional profile. This patient-centered approach aims to improve outcomes while ensuring efficient use of resources.