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The Patient Driven Payment Model, Skilled Nursing Facility Coding Intensity, and Medicare Expenditures.

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The Patient Driven Payment Model (PDPM) increased skilled nursing facility (SNF) coding intensity and Medicare spending. However, it did not significantly alter patient rehospitalization or mortality rates.

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Area of Science:

  • Health Economics
  • Health Services Research
  • Gerontology

Background:

  • The Patient Driven Payment Model (PDPM) shifted Medicare reimbursement for skilled nursing facilities (SNFs) from therapy volume to patient characteristics.
  • Understanding PDPM's impact on coding, spending, and outcomes is crucial for policy evaluation.

Purpose of the Study:

  • To evaluate changes in SNF diagnostic coding intensity, Medicare expenditures, and patient outcomes before and after PDPM implementation.
  • Assess the association between PDPM and SNF coding intensity, Medicare spending, and patient outcomes.

Main Methods:

  • Retrospective cohort study using regression discontinuity analysis.
  • Analyzed traditional Medicare beneficiaries aged 65+ admitted to SNFs for postacute care (January 2018-February 2020).
  • Compared outcomes immediately before and after PDPM implementation on October 1, 2019.

Main Results:

  • PDPM implementation significantly increased SNF relative coding intensity (0.54 points; P < .001).
  • SNF episode expenditures increased by $665 (P < .001) post-PDPM.
  • No significant changes in 30-day rehospitalization or mortality rates were observed.

Conclusions:

  • PDPM implementation led to increased coding intensity and Medicare expenditures in SNFs without affecting patient mortality or readmission rates.
  • SNFs appear to have adjusted coding practices in response to PDPM incentives.
  • Continuous monitoring is essential to ensure PDPM's financial incentives support accurate coding, equitable reimbursement, and quality care.