Changes in Therapy Utilization at Skilled Nursing Facilities Under Medicare's Patient Driven Payment Model



      The Patient Driven Payment Model (PDPM) was implemented in October 2019 to reimburse skilled nursing facilities (SNFs) based on Medicare patients’ clinical and functional characteristics rather than the volume of services provided. This study aimed to examine the changes in therapy utilization and quality of care under PDPM.


      Quasi-experimental design.

      Setting and Participants

      In total, 35,540 short stays by 27,967 unique patients in 121 Oregon SNFs.


      Using Minimum Data Set data from January 2019 to February 2020, we compared therapy utilization and quality of care for Medicare short stays before and after PDPM implementation to non-Medicare short stays.


      The number of minutes of individual occupational therapy (OT) and physical therapy (PT) per week for Medicare stays decreased by 19.3% (P < .001) and 19.0% (P < .001), respectively, in the first 5 months of PDPM implementation (before the COVID-19 pandemic). The number of group OT and PT minutes increased by 1.67 (P < .001) and 1.77 (P < .001) minutes, respectively. The magnitude of PDPM effects varied widely across stays with different diagnoses. PDPM implementation was not associated with statistically significant changes in length of SNF stay (P = .549), discharge to the community (P = .208), or readmission to the SNF within 30 days (P = .684).

      Conclusions and Implications

      SNFs responded to PDPM with a significant reduction in individual OT and PT utilization and a smaller increase in group OT and PT utilization. No changes were observed in length of SNF stay, rates of discharge to the community, or readmission to the SNF in the first 5 months of PDPM implementation. Further research should examine the relative effects of individual and group therapy and their impact on the quality of SNF care.


      To read this article in full you will need to make a payment

      Purchase one-time access:

      Academic & Personal: 24 hour online accessCorporate R&D Professionals: 24 hour online access
      One-time access price info
      • For academic or personal research use, select 'Academic and Personal'
      • For corporate R&D use, select 'Corporate R&D Professionals'


      Subscribe to Journal of the American Medical Directors Association
      Already a print subscriber? Claim online access
      Already an online subscriber? Sign in
      Institutional Access: Sign in to ScienceDirect


        • Chandra A.
        • Dalton M.A.
        • Holmes J.
        Large increases in spending on postacute care in medicare point to the potential for cost savings in these settings.
        Health Aff. 2013; 32: 864-872
        • Sood N.
        • Alpert A.
        • Barnes K.
        • Huckfeldt P.
        • Escarce J.J.
        Effects of payment reform in more versus less competitive markets.
        J Health Econ. 2017; 51: 66-83
        • Krug E.
        • Cieza A.
        Renforcer les systèmes de santé pour fournir les services de réadaptation.
        Can J Occup Ther. 2017; 84: 72-75
        • Office of the Inspector General
        Inappropriate Payments to Skilled Nursing Facilities Cost Medicare More than a Billion Dollars in 2009.
        Date: 2012
        Date accessed: September 28, 2021
        • Newhouse J.P.
        • Garber A.M.
        Geographic Variation in Medicare Services.
        N Engl J Med. 2013; 368: 1465-1468
        • Bowblis J.R.
        • Brunt C.S.
        Medicare skilled nursing facility reimbursement and upcoding.
        Heal Econ (United Kingdom). 2014; 23: 821-840
        • Grabowski D.C.
        • Afendulis C.C.
        • McGuire T.G.
        Medicare prospective payment and the volume and intensity of skilled nursing facility services.
        J Health Econ. 2011; 30: 675-684
        • McGarry B.E.
        • White E.M.
        • Resnik L.J.
        • Rahman M.
        • Grabowski D.C.
        Medicare’s new patient driven payment model resulted in reductions in therapy staffing in skilled nursing facilities.
        Health Aff. 2021; 40: 392-399
        • Prusynski R.A.
        • Leland N.E.
        • Frogner B.K.
        • Leibbrand C.
        • Mroz T.M.
        Therapy staffing in skilled nursing facilities declined after implementation of the patient-driven payment model.
        J Am Med Dir Assoc. 2021; 22: 2201-2206
        • Unruh M.A.
        • Khullar D.
        • Jung H.Y.
        The patient-driven payment model: addressing perverse incentives, creating new ones.
        Am J Manag Care. 2020; 26: 150-152
        • Centers for Medicare and Medicaid Services
        Nursing homes including rehab services data archive | Provider Data Catalog.
        • Centers for Medicare & Medicaid Services
        Five-Star Quality Rating System. Five-Star Quality Reporting System.
        • Centers for Medicare and Medicaid Services (CMS)
        Minimum Data Set (MDS) 3.0 Resident Assessment Instrument (RAI) Manual.
        • Mendez-Luck C.A.
        • Luck J.
        • Larson A.E.
        • Dyer G.B.
        The State of Nursing Facilities in Oregon, 2017.
        • Fredriksson A.
        • Oliveira GM de
        Impact evaluation using difference-in-differences.
        RAUSP Manag J. 2019; 54: 519-532
        • Karges J.
        • Smallfield S.
        A description of the outcomes, frequency, duration, and intensity of occupational, physical, and speech therapy in inpatient stroke rehabilitation.
        J Allied Health. 2009; 38: E1-E10
        • Centers for Medicare and Medicaid Services
        Patient Driven Payment Model Fact Sheet: Concurrent and Group Therapy Limit Background.
        • Warren S.
        • Sampson M.
        ASHA Members Report Their PDPM Experiences.
        ASHA Lead. 2020; 25: 40-42
        • Lenze E.J.
        • Lenard E.
        • Bland M.
        • et al.
        Effect of Enhanced Medical Rehabilitation on Functional Recovery in Older Adults Receiving Skilled Nursing Care After Acute Rehabilitation: A Randomized Clinical Trial.
        JAMA Netw Open. 2019; 2: e198-e199
        • O’Brien S.R.
        • Zhang N.
        Association between therapy intensity and discharge outcomes in aged medicare skilled nursing facilities admissions.
        Arch Phys Med Rehabil. 2018; 99: 107-115
        • Prusynski R.A.
        • Gustavson A.M.
        • Shrivastav S.R.
        • Mroz T.M.
        Rehabilitation intensity and patient outcomes in skilled nursing facilities in the united states: a systematic review.
        Phys Ther. 2021; 101: 1-10
        • Baldwin P.
        Patient-Driven Payment Model Checkup.
        Sr Care Pharm. 2020; 35: 187
        • Navathe A.S.
        • Grabowski D.C.
        Will Medicare’s New Patient-Driven Postacute Care Payment System Be a Step Forward?.
        JAMA Heal Forum. 2020; 1: e200718
        • Britton M.C.
        • Ouellet G.M.
        • Minges K.E.
        • Gawel M.
        • Hodshon B.
        • Chaudhry S.I.
        Care transitions between hospitals and skilled nursing facilities: perspectives of sending and receiving providers.
        Joint Comm J Qual Patient Saf. 2017; 43: 565-572
        • Reinhard S.
        • Accius J.
        • Houser A.
        • Ujvari K.
        • Alexis J.
        • Fox-Grage W.
        A State Scorecard on Long-Term Services and Supports for Older Adults, People with Physical Disabilities, and Family Caregivers.
        Date: 2017
        Date accessed: March 28, 2022
        • (U.S.) NC for HS
        Long-Term Care Providers and Services Users in the United States, 2015–2016.
        Date: 2015
        Date accessed: March 28, 2022