Thousands of physical, occupational and speech therapists have been laid off as skilled-nursing facilities transition to a new payment model that kicked in Tuesday.
Dozens of these therapists have emailed Modern Healthcare saying they have been laid off or had their wages cut as a result of the new patient-driven payment model, which is akin to bundled payments and based on patient assessments and acuity rather than the volume of therapy services. Industry observers expect more fallout as certain providers gamed the system to maximize therapy hours, which are now likely going to be a fraction of what they were under the resource-utilization group model.
One national chain, Genesis HealthCare, said that 585 of approximately 10,000 rehabilitation employees were affected by the payment changes. The company’s federal securities filings and its website show that the approximate total number of rehabilitation employees dropped from 14,000 to 10,000 between Dec. 31, 2018 and Oct. 1, 2019. A Genesis spokesperson said that other than the 585 affected employees, the reduction was unrelated to the new PDPM model.
The company said in a statement that it continues to focus on "clinically appropriate interventions while striving for the best outcomes at the lowest cost."
"With recent changes in our industry, we have reorganized our therapy gyms, impacting on average less than one person per facility nationally," Genesis said.
The CMS has said that the patient-driven payment model implementation does not alter patients' therapy needs, noting that should be the "primary driver of care decisions."
But several therapists who work in SNFs have alleged that's not the case.
"Reliant and a few other companies have obviously decided to approach this new payment system financially in a way that does not take into account the patients or their employees. It breaks my heart!" wrote Summer Branch, a speech language pathologist who was laid off by Reliant Rehabilitation on Monday and offered to transition to a per-diem employee.
She said Reliant also expected 95% productivity during her working hours, meaning that time would need to be spent in therapy sessions rather than discussing treatment with patients' families or completing paperwork.
But Branch is heartened by the stories of many other companies that have approached the new model in the way it was likely meant to be, with a patient-centered approach, she said.
Noblesville, Ind.-based Vertis Therapy has not changed its productivity expectations or laid off any employees, said Jessica Beaudry, vice president of operations.
"What we had as an industry was companies who were overutilizing therapy to get higher reimbursement," she said. "In the new system, that does not do them any good."
People should be upset with the companies that are taking advantage of the patient-driven payment model, rather than the model itself, Beaudry added.
"If you are doing the right thing by the patient, everything should be fine," she said.
Reliant said in a statement that it could not share any details about changes to its day-to-day operations but that its mission remains unchanged—providing the best care to its patients.
Calls and emails to Encore Healthcare regarding its total layoffs were not returned.
The former reimbursement model encouraged potentially unnecessary therapy services, the CMS said, adding that it aims to eliminate that motivation while reducing providers' administrative burdens. What was intended to be a "budget-neutral" change includes a provision that group and concurrent therapy minutes can account for no more than 25% of the total services provided to the patient.
"There is no question in my mind that therapy hours are going to be a fraction of what they are today," Gerald Stoll, a vice president with the healthcare division of Hub International Northeast, a global insurance brokerage, told Modern Healthcare last month. "SNFs might not be going after those hip- and knee-replacements anymore. It's probably not a good time to own a therapy company now. But if you do, you need to adapt and change the business model tremendously."
In a memo obtained by Modern Healthcare to the therapy staff at a Florida-based SNF, executives said that concurrent and group therapies are "not an option, they are a must."
The CMS said that the model's 25% limit on group and concurrent therapy is meant to ensure SNF patients receive quality therapy services and that one-on-one sessions remain the "significant majority."
The memo went on to say if employees have decreased hours during the week, they may be asked to work on the weekend. Staff may lose their full-time eligibility and benefits if they do not reach 30 hours a week for three consecutive pay periods.
This mandate is similar to memos to therapists at other facilities, according to a Change.org petition to HHS lobbying for patients and therapists to decide the appropriate care plan, rather than follow corporate directives. It has more than 16,000 signatures.
"No one knows or could even understand the depth of the devastation of this," said Jill Sadler, a physical therapist assistant who was laid off on Oct. 1 by Genesis' Oak Grove Center, a skilled-nursing home in Waterville, Maine, where she worked 14 years. "It affects way more than the therapists. Our elderly deserve the best at the end of life but are always last for all services."
The wave of unemployed therapists will likely outweigh the demand for their services, Vertis Therapy's Beaudry said.
"They will likely struggle for a while," she said. "It is definitely a very scary thing right now for our industry."
UPDATE: This story has been updated to reflect the official number of Genesis HealthCare employees affected by the new PDPM model.
