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Therapy under PDPM: In-house vs. Contract

Updated: Oct 23, 2019

by Rhiannon Hunter, VP of Compliance and Denials

With the onset of the Patient Driven Payment Model (PDPM), many providers are left wondering which therapy structure will work best for their facilities; in-house or contract? There is no doubt that there are tremendous benefits to transitioning therapy services to in-house. Let's look at a couple of examples:

Improved Reimbursement: PDPM reimbursement is based on the unique needs of the individual patient. While there are only finite clinical categories, functional scores, comorbidities, and NTA scores, the combination of these to determine a patient's reimbursement is infinite. Seamless collaboration between the Interdisciplinary Team (IDT) is imperative to improve that patient's functional outcome measures, reduce risk of hospital readmissions, and maximize reimbursement in order to provide excellence in care.

Improved Collaboration: As we just referenced, collaboration is key to the success of a patient's skilled stay. In-house therapy provides continuity and improved communication between departments by reducing the "us vs them" mentality. This improved communication and continuity between the IDT provides improved success with surveys, Quality Measures (QMs), care planning, discharge planning and outcome measures.

Despite the obvious benefits to transitioning therapy in-house, timing plays a significant role in this decision. Maybe YOUR facility isn't ready: So....what should you be doing???

Therapy Vendor Contract Review

PDPM is a great time to renegotiate your therapy vendor contracts! Facilities will definitely want to move away from a billable minute or RUGs therapy contract. Industry leaders report that most therapy vendors are offering bids for a % of the therapy components (PT, OT, SLP), a % of the entire per diem, a flat Medicare rate, and/or a flat rate per actual minute billed for therapy services. In addition to these negotiations, consider the following topics to discuss with your therapy vendors during the renegotiations process:

  • How does the therapy vendor plan to maintain consistent therapy patterns under PDPM? (This is SO important!! CMS will be watching any shifts in therapy trends very closely.)

  • Is there a shared risk between your facility and the therapy vendor in order to facilitate joint motivation for improved QMs, improved patient measures, maximum reimbursement, and denied claims?

  • If your therapy vendor contract charges a flat rate per actual minute billed, how are group and concurrent minutes being reported?

  • If a (%) of the therapy components (PT, OT, and SLP) is contracted, how are SLP comorbidities handled if skilled intervention is not medically necessary? Will those rates be excluded?

This change in our industry is requiring us to make a significant shift in our thinking, as well as our processes. And it can be more than overwhelming. Regardless of your decision for contract therapy or in-house, empower your facility with trusted advisors that will holistically guide you to success in this ever changing industry.

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