Top 2019 trends for skilled nursing

According to Skilled Nursing News, below are many of the upcoming trends in 2019:

CMS will step up enforcement, look to cut reimbursements

So far, PDPM is the rare massive government regulation with nearly unanimous support from the industry that it’s designed to regulate. Since the new model was rolled out earlier this year, executives from major real estate investment trusts (REITs) and operators have sung its benefits, with a particular focus on the way that it more closely links reimbursement dollars with patient complexity — a key step on the eventual path toward linking cash with outcomes.

Industry leaders have also taken heart in the fact that the Centers for Medicare & Medicaid Services (CMS) decided to increase the Medicare market basket rate by 2.4% for fiscal 2019 — a move that will boost reimbursements across the board — and the budget-neutral nature of the PDPM structure. In theory, at least, CMS will spend no more or less money on skilled therapy reimbursements than it did under the current Resource Utilization Group (RUG) system.

(This, of course, represents a significant walk-back of the industry’s reaction to that 2.4% rate when Congress first floated the market basket increase in February. The consensus had been that the rate would increase by 2.7%, prompting an angry reaction that seemed to temper once the smaller boost went into effect.)

But while providers seem to be focused on the upside of CMS not making any payment cuts under PDPM, the optimism ignores another key truth about a budget-neutral policy change: If the government changes the way providers are reimbursed for key services, but doesn’t adjust the overall faucet of dollars going into the program, there must be winners and losers — and the losers could find themselves out of the industry, given how tight margins already are for providers across the country.

Then there’s the matter of what will happen once CMS officials get their hands on cold, hard data about how providers actually operate under PDPM. Various consultants and operators have identified ways they can boost reimbursements with the new system, either by deliberately taking on more complex patients through the introduction of clinical specialities, or by simply identifying the everyday procedures and services that suddenly have an effect on reimbursements with PDPM.

I could be proven wrong, but it’s highly unlikely that CMS would stand for a scenario in which Medicare spending at skilled nursing facilities actually goes up in fiscal 2020 and beyond as providers learn which strategies can give them an edge. CMS probably won’t be able to adjust rates downward by the end of calendar 2019, with just three months’ worth of data to go on, but I expect Washington to be watching those numbers closely — with an eye toward potential downward adjustments in 2020 and beyond.

Private equity’s influence will grow

The year’s blockbuster deal — Welltower Inc.’s (NYSE: WELL) joint-venture play to snap up the real estate from the bankrupt HCR ManorCare chain, with new operator ProMedica morphing from a regional hospital non-profit to a nationwide powerhouse – came with a lengthy side of private equity bashing.

Read the full list at Skilled Nursing News.

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