The Patient-Driven Payment Model: Thought Leadership for Implementation Success
September 25, 2019

The Patient-Driven Payment Model: Thought Leadership for Implementation Success

The Patient-Driven Payment Model (PDPM) represents the most profound change to skilled nursing facility (SNF) reimbursement in more than two decades. While skilled nursing providers are no strangers to change, the sheer speed and level of complexity required for PDPM implementation will place considerable demands on organizations regardless of readiness level. SNFs across the country should keep in mind the following four strategic imperatives as they prepare to go live with PDPM on October 1, 2019.

Articulate the Vision

Prior to embarking on any significant change, this leadership ethos prevails: start with the end in mind. The ability to articulate your organization’s vision for PDPM will enable crucial staff buy-in. Simply put, PDPM shifts the emphasis away from therapy minutes to a truly patient-centered care model. The goal is to improve care delivery, particularly for patients with the most medically complex needs. Similar language should be incorporated into the vision statement while also catering to your organizational culture and goals.

As your organization makes sense of what exactly PDPM means in the context of big picture thinking, we strongly encourage key leadership within your organization to hold a visioning session. Be intentional in framing responses to the following questions:

  • Why is this new change in payment being mandated?
  • How does PDPM fit within our existing organizational goals?
  • How will PDPM impact staff and what will be the new expectation?
  • What will the impact be on our patients/residents and their families?
  • How will care delivery be different?
  • What major challenges and opportunities can we anticipate during PDPM implementation?

Supporting information from your visioning session should be synthesized into a clearly articulated message that staff across all levels can easily understand, and this message should be disseminated organization-wide. The goal is to establish common ground and a shared understanding of where the organization is headed.

Align Clinical and Operational Strategies Across the Continuum

PDPM seeks to more accurately reimburse providers based on patient complexity and clinical characteristics. Incentives are shifted away from volume to better align with industry movement towards value-based care. With this shift, providers need to ensure both clinical and operational strategies are aligned across the continuum.

With respect to clinical strategies, emphasis should focus on detailed documentation of medical conditions as well as accurate and timely coding of the Minimum Data Set (MDS). Deployment of proactive care management and discharge planning will also be imperative. Strategies that consider the patient’s care trajectory across the entire care continuum will be at a major advantage. Hospitals are seeking high-value clinical partners that will share in risk while demonstrating their ability to deliver quality care and attain cost savings. PDPM also presents an opportunity for skilled nursing providers to further their collaborations with home health providers. The implementation of home health’s new Patient-Driven Groupings Model (PDGM) has similar goals to PDPM and also reduces the focus on therapy-driven payments.

From the operational standpoint, strategies should center around enhancing systems to ensure viable margins given the seismic change in payment methodology. Understanding the relationship and overall impact between acuity level and reimbursement will also be key to ensuring successful operations. More than ever, skilled nursing providers will need to prioritize occupancy through making the pivot to more medically complex care. Aligning these clinical and operational efforts with technology and the development of new care models will position providers with an opportunity to realize even greater efficiencies.

Equip and Empower Employees

Employees serve as the single most important investment of your organization. Successful implementation of PDPM will be tremendously dependent upon the extent to which leaders equip and empower their employees. Significant efforts should be placed on staff education and training. We encourage leaders to conduct a readiness assessment that will help identify your organization’s specific training needs. From the assessment, an action plan can be developed representing all disciplines. A detailed training calendar should be woven into the action plan while highlighting key implementation milestones.

As you embark on the development and implementation of the action plan, employees need to be involved every step of the way. Seize each opportunity available to empower employees by playing to their strengths. By way of example, employees gifted in project management and strategic planning can help with crafting the action plan. Employees known for their educational skills can help with content development and training execution. Identify which employees serve as excellent relationship managers so they can drive communication and engagement across the interdisciplinary teams. Within your clinical team, PDPM represents an opportunity to elevate nurses to work to the top of their license. Enable the clinical staff to leverage their expertise with respect to managing complex and geriatric patients.

Empowered employees report higher levels of job satisfaction, exhibit increased organizational loyalty, and consistently outperform their peers. Moreover, they help organizations accomplish their goals more quickly and provide superior customer service. Be honest with your leadership team about the resources needed to equip and empower employees as this will require a considerable undertaking. Frame your efforts within this context: choosing not to properly invest upstream will cause your organization to suffer more severely downstream.

Foster a Culture That Embraces Change Management

Under PDPM, SNFs must make major changes in how they evaluate, treat, document, and deliver patient care. These changes will impact all departments to varying degrees, including areas such as  the business office, environmental services, and human resources. Facing the reality that conflict is inevitable with change, leaders need to understand how to effectively manage both change and conflict.

Lippitt’s Managing Complex Change Model details five key elements necessary to successfully lead change: vision, skills, motivation, resources, and action plan[1]. The model also details undesirable outcomes that can result when one of the elements is missing. As examples, without vision, the result will be confusion; and without adequate skills, anxiety will occur. When motivation is not addressed, employees will be resistant, while resource shortages will leave employees feeling frustrated. With no action plan in place, employees are faced with false starts. Organizations should develop a change management strategy that encompasses these five elements.

Leaders are challenged to foster a culture that welcomes and embraces change so that employees feel supported throughout the implementation process. The responsibility of leaders is to serve as a positive role model, helping to influence the organizational direction while using their position of influence to empower staff. We all hold a natural tendency to resist change, and ambiguity makes change all the more difficult. Thus, it is paramount for leaders to have a carefully crafted change management strategy. Conflict management should also be incorporated into the strategy. While uncomfortable, conflict is not inherently bad. It offers the opportunity to learn more about each other, to build stronger relationships, and to overcome barriers. When addressed effectively, change and conflict management foster collaboration. Teams can have an honest and open discussion about their concerns, which will pave the way to finding agreement and a solution to work better together.

For More Information

For further information on PDPM implementation, you may view the complimentary recording of our HDG Learn Webinar “PDPM—Guiding Change, Managing Conflict, and Strengthening Culture.” Following, please join Health Dimensions Group for an upcoming webinar, “The Real Truth of PDPM: Early Lessons Learned,” at 2:30 pm CT on October 24.

As a second step, we invite you to have a conversation with a member of the Health Dimensions Group (HDG) consulting team. HDG’s experience in skilled nursing care as both a consulting and management firm uniquely positions us to assist with your organization’s PDPM implementation needs. Please visit our website or contact us at 763.537.5700 or

Authored by:

Erin Shvetzoff Hennessey, MA, NHA, CPG, Chief Executive Officer, Health Dimensions Group

Linda M. Shell, DNP, MA, RN, Co-founder and Chief Learning Officer,


[1] Managing Complex Change Model. M Lippit 1987; T. Knoster 1991.


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