Nursing homes brace for new Medicare payment system

Nursing homes across the country are rethinking their operational strategy as they prepare for a drastically new payment model that goes into effect in less than five months.

The Patient Driven Payment Model, or PDPM, which takes effect Oct. 1, significantly changes how skilled-nursing facilities have traditionally been paid under Medicare by moving away from a system that determines reimbursement based primarily on the volume of therapy services a patient receives to one that takes into account a patient’s unique health characteristics.

The new model is an attempt by the CMS to transition the long-term care sector to value-based payment, and it’s forcing nursing homes to reevaluate how they assess patients.