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On October 1, 2019, the Centers for Medicare & Medicaid Services (CMS) implemented a new Medicare reimbursement system for skilled nursing facilities (SNFs) called the Patient-Driven Payment Model (PDPM).[1] The prior system, called Resource Utilization Groups (RUGs), paid higher rates for residents receiving more therapy – the more minutes of therapy billed to Medicare, the higher the reimbursement to the SNF. CMS intentionally reversed the financial incentives in PDPM and explicitly reported in the final rules that it would pay SNFs more when they provided no therapy and less when they provided any therapy.[2] CMS also authorized SNFs to provide up to 25% of therapy, by discipline, as group or concurrent therapy, rather than as individual therapy.[3] Under RUGs, 99% of therapy was individual[4] and CMS still considers individual therapy the appropriate mode of therapy for most residents.[5] SNFs responded to the financial incentives and immediately began laying off therapists and changing the type of therapy they provided.[6]

Skilled Nursing News, an online newsletter about the nursing home industry, conducted a poll of facilities and vendors. It reports that 43.27% of operators and vendors laid off therapy staff after PDPM was implemented; 56.73% did not.[7]

Although the poll was not a scientific study, the 111 operators and vendors who responded told Skilled Nursing News that:

  • They laid off large percentages of therapy staff:
    • 51% laid off 1-20% of their therapy staff
    • 53% laid off 21-40% of their therapy staff
    • 63% laid off 41-60% of their therapy staff
    • 33% laid off 61-80% of their therapy staff
  • They converted at least some therapy staff from regular hours to “as-needed” status:
    • 08% switched 0-20% of their therapy staff to “as needed”
    • 85% switched 21-40% of their therapy staff to “as needed”
    • 31% switched 41-60% of their therapy staff to “as needed”
    • 77% switched 61-80% of their therapy staff to “as needed
  • They switched large proportions of therapy minutes from individual therapy to group and concurrent therapy:
    • 57% switched 1-10% of their therapy minutes to group or concurrent therapy
    • 29%% switched 11-20% of their therapy minutes to group or concurrent therapy
    • 57% switched 20-25% of their therapy minutes to group or concurrent therapy
    • 57% switched 25% or more of their therapy minutes to group or concurrent therapy

Note: Although PDPM limits group and concurrent therapy to 25% of therapy provided, by discipline, CMS will tell SNFs if they exceed the 25% cap on group or concurrent therapy and provide a “non-fatal warning edit.”[8] In other words, there are currently no actual consequences to a SNF that exceeds the group therapy cap.

What Can Residents Do?

Eligibility and coverage criteria for SNFs did not change with PDPM. Beneficiaries continue to qualify for SNF coverage under Part A if they require skilled nursing services seven days a week or skilled therapy services five days a week or a combination of skilled nursing and therapy services seven days a week.[9] Residents’ actual need for therapy also did not change with PDPM.

Residents facing any change in therapy should work with their therapists and physicians and request a care planning meeting to discuss why and how their therapy is changing and why they need individual therapy.

There are many useful statements by CMS to cite. For example, the preamble to the final rules in August 2018 states:

[W]e believe that individual therapy is usually the best mode of therapy provision as it permits the greatest degree of interaction between the resident and therapist, and should therefore represent, at a minimum, the majority of therapy provided to an SNF resident . . . group and concurrent therapy should not be utilized to satisfy therapist or resident schedules, and . . . all group and concurrent therapy should be well documented in a specific way to demonstrate why they are the most appropriate mode for the resident and reasonable and necessary for his or her individual condition.”[10]

The preamble to the rules in August 2019 reiterates these points: “SNFs should include in the patient’s plan of care an explicit justification for the use of group, rather than individual or concurrent, therapy.”[11] The 2019 preamble also indicates that the description in the care plan should identify “the specific benefits to that particular patient of including the documented type and amount of group therapy; that is, how the prescribed type and amount of group therapy will meet the patient’s needs and assist the patient in reaching the documented goals.”[12] Finally, such documentation “is necessary to demonstrate that the SNF is providing services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident in accordance with section 1819(b)(2) of the Act.”[13]

Residents may also point to CMS’s Frequently Asked Questions for PDPM. Question number 12.1, for example:

12.1 Will Medicare still pay for skilled therapy services under PDPM? Yes, skilled therapy services will still be reimbursed by Medicare under PDPM. While PDPM does change the manner in which patients are classified into payment groups under the SNF PPS, it does not change any of the coverage criteria or documentation requirements associated with the skilled therapy service coverage under PDPM. More importantly, PDPM does not change the care needs of SNF patients, which should be the primary driver of care decisions, including the type, duration, and intensity of skilled therapies, made on behalf of SNF patients.[14]

Residents should not, however, be expected to challenge SNFs’ changing therapy practices solely on their own. Looking for strength and safety in numbers, they may also choose to raise therapy concerns at resident council meetings; file a formal grievance with the facility for failure to provide appropriate therapy;[15] contact the nursing home ombudsman program; file a complaint with the state survey agency; and contact CMS to voice their concerns.

CMS has promised “a robust monitoring program to assess compliance with the 25 percent cap, and based on our findings, we may propose taking additional action in future rulemaking.”[16]  Keeping CMS aware of what is happening to therapy services is important.

What Can Therapists Do?

In addition, individual therapists and the therapy associations need to advocate for residents. The 2018 preamble says, for example, “We agree that therapists are the most appropriate professionals to determine the mode of therapy a patient should receive and that professional judgment must be trusted and used in SNFs.”[17] The 2019 preamble reiterates the expectation that qualified therapists and therapy assistants

should use their own clinical judgment to determine the appropriate frequency, duration, and modality of therapy services and the size of a therapy group based on the individual needs of each patient. Financial motives should not override the clinical judgment of a therapist or therapy assistant or pressure a therapist or therapy assistant to provide less than appropriate therapy, including putting patients in large groups that are not clinically appropriate for those patients.[18]

Therapists can and must be advocates for the residents they work with.

December 20, 2019 – T. Edelman


[1] 83 Fed. Reg. 39162, 39183-39265 (Aug. 8, 2018).
[2] 83 Fed. Reg. 39162. 39257-39259, Table 37 (CMS, PDPM Impact Analysis, Resident-Level).
[3] 83 Fed. Reg. 39162, 39240-39242.
[4] 83 Fed Reg. 39162, 39240.
[5] 83 Fed. Reg. 39162, 39238.
[6] See “Medicare’s New Skilled Nursing Facility Payment System Alters Access to Care” (CMA Alert, Nov. 7, 2019),
[7] Alex Spanko, “SNN Poll: 43% of Operators, Vendors Have Laid Off Therapy Staff Post-PDPM,” Skilled Nursing News (Dec. 8, 2019),
[8] 83 Fed. Reg. 39162, 39239.  See also CMS, Fact Sheet on Concurrent and Group Therapy Limit (Aug. 30, 2019), (click on the Fact Sheet).
[9] 42 U.S.C. §1395f(a)(2)(B).
[10] 83 Fed. Reg. 29162, 39239.
[11] 84 Fed. Reg. 38728, 38746 (Aug. 7, 2019).
[12] Id.
[13] Id.
[14] CMS, Patient Driven Payment Model, Frequently Asked Questions, #12.1 (Aug. 30, 2019), (click on the FAQ link).
[15] 42 C.F.R. §483.10(j).
[16] 84 Fed. Reg. 38728, 38748.
[17] 83 Fed. Reg. 39162, 39240.
[18] 84 Fed. Reg. 38278, 38748.

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