Dual impacts of Medicare payment reform and the COVID-19 pandemic on therapy staffing in skilled nursing facilities

Background: Implementation of new skilled nursing facility (SNF) Medicare payment policy, the Patient Driven Payment Model (PDPM), resulted in immediate declines in physical and occupational therapy staffing. This study characterizes continuing impacts of PDPM in conjunction with COVID-19 on SNF therapy staffing and examines variability in staffing changes based on SNF organizational characteristics. Methods: We analyzed Medicare administrative data from a national cohort of SNFs between January 2019 and March 2022. Interrupted time series mixed effects regression examined changes in level and trend of total therapy staffing minutes/patient-day during PDPM and COVID-19 and by type of staff (therapists, assistants, contractors, and in-house staff). Secondary analyses examined the variability in staffing by organizational characteristics. Results: PDPM resulted in a -6.54% level change in total therapy staffing, with larger declines for assistants and contractors. Per-patient staffing fluctuated during COVID-19 as the census changed. PDPM-related staffing declines were larger in SNFs that were: Rural, for-profit, chain-affiliated, provided more intensive therapy, employed more therapy assistants, and admitted more Medicare patients before PDPM. COVID-19 resulted in larger staffing declines in rural SNFs but smaller early declines in SNFs that were hospital-based, for-profit, or received more relief funding. Conclusions: SNFs that historically engaged in profit-maximizing behaviors (e.g., providing more therapy via lower-paid assistants) had larger staffing declines during PDPM compared to other SNFs. Therapy staffing fluctuated during COVID-19, but PDPM-related reductions persisted 2 years into the pandemic, especially in rural SNFs. Results suggest specific organizational characteristics that should be targeted for staffing and quality improvement initiatives.