A.G. Rhodes Health & Rehab

Recent Medicare Payment Model Changes Take Effect This Year


The Medicare Program currently assists many patients paying for senior therapy and rehabilitation services in care facilities in Georgia. This year, a significant rule change takes effect for the first time. The federal government recently adopted a new “Patient-Driven Payment Model” for the provision of therapy to Medicare patients. This change impacts both patients and care providers furnishing occupational, physical, and other rehabilitative therapies covered by the Medicare program.

Departing From a Resource Utilization Group Model

The new payment model modifies the basis for reimbursing therapists for their services. In the past, the federal government quantified the resources expended in caring for each patient. It used a “Resource Utilization Group” approach.

In calculating payments, this previous system focused upon the length of time each patient spent undergoing rehabilitative therapy. Therapists received higher reimbursements when they spent a maximum period of allowable time per case (up to 12 hours per patient per week). The Resource Utilization Group model prevailed for nearly two decades. Critics contended this system tended to drive health care costs upwards by providing financial incentives for supplying therapy, regardless of the results.

A New Patient Driven Payment Model

The new Patient Driven Payment Model will offer incentives for achieving desired outcomes instead. It permits therapists to enjoy greater latitude in developing individualized patient treatment plans. Rehabilitation teams won’t need to meet specified time thresholds in order to receive compensation.

Therapists will use their best judgment to tailor services to meet the customized treatment needs of each patient. Proponents hope this new approach will ultimately result in Medicare cost savings and enhanced care. Critics worry some facilities may not continue to offer extensive rehabilitation therapy programs.

Impacts of The Medicare Payment Change

Last year, some health care providers cut the number of therapists on staff in anticipation of the Medicare payment rule change. Other companies re-wrote job descriptions, to utilize in-house therapists only on an as-needed basis. Some providers plan to limit their use of contract therapists. However, other care facilities have not made any personnel cuts or position changes.

The full impacts of the new payment model remain unclear at this time. A movement away from requiring specific therapy time thresholds per patient may (or may not) ultimately reduce total therapy hours delivered nationwide. Certainly, health care experts will evaluate the results of the Medicare rule change with interest!

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