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Cambridge College of Healthcare & Technology’s Bachelor of Science in Healthcare Administration (BHA) program educates the student in the ever-evolving world of post-acute care and how the Patient-Driven Payment Model (PDPM) has reshaped how skilled nursing facilities (SNFs) are reimbursed for Medicare Part A patients. As a Nursing Home Administrator or Long-Term Care leader, understanding PDPM isn’t just a billing concern, it’s an operational imperative.
What Is PDPM?
PDPM, is the new Medicare payment approach for skilled nursing facilities physicians as of October 1, 2019, from the Centers for Medicare & Medicaid Services (CMS). It will replace the Resource Utilization Group (RUG-IV) system and is intended to move the focus from volume of services to the complexity of the patient.
In other words: The question is not how much therapy is provided; it is what is necessary for the patient.
Key Components of PDPM
Reimbursement under PDPM is calculated using five case-mix adjusted components:
- Physical Therapy (PT)
- Occupational Therapy (OT)
- Speech-Language Pathology (SLP)
- Nursing
- Non-Therapy Ancillary (NTA)
Every part of the tool is rated according to the patient’s clinical profile, diagnosis, functional status, and comorbidities. The sixth part, non-case-mix, is a per diem payment for room and board type services.
Cambridge College: Why PDPM Matters to Administrators
1. Operational Strategy
- PDPM rewards accurate documentation, timely assessments, and interdisciplinary collaboration.
- Therapy staffing models and delivery must now align with individual patient needs rather than fixed therapy minutes.
2. Revenue Optimization
- Proper ICD-10 coding at admission is critical, the primary diagnosis drives the clinical category.
- Overlooking secondary diagnoses or comorbidities can lower the NTA score and result in under-reimbursement.
3. Staffing and Workforce Implications
- With less pressure on therapy minutes, administrators can reallocate resources to bolster nursing assessments, MDS coordination, and clinical compliance.
- PDPM puts pressure on nursing documentation accuracy and clinical training.
Real-World Impact
A patient with multiple comorbidities (e.g., diabetes, COPD, recent joint replacement) will generate more reimbursement under PDPM than one with fewer clinical complexities, even if they receive less therapy. Administrators must ensure their teams capture all relevant conditions at admission to avoid missed revenue opportunities.
Common Challenges Under PDPM
- Incomplete or inaccurate ICD-10 coding
- Missed NTAs due to rushed admission assessments
- Insufficient training for nursing and MDS coordinators
- Delayed or disjointed care team communication
Strategic Solutions for Administrators
- Invest in cross-functional team training (clinical, MDS, billing)
- Strengthen pre-admission processes to gather full diagnostic profiles
- Leverage your electronic health record (EHR) for documentation prompts and coding accuracy
- Monitor PDPM metrics monthly and compare to regional benchmarks
Why Education in Healthcare Administration Matters
Cambridge College of Healthcare & Technology’s Bachelor of Science in Healthcare Administration (BHA) program provides the strategic, clinical, and regulatory foundation needed to manage payment models like PDPM. Through coursework in healthcare finance, compliance, leadership, and long-term care operations, students are equipped to:
- Lead interdisciplinary teams
- Monitor reimbursement and case mix trends
- Align staffing models to care delivery
- Navigate CMS regulations with confidence
Whether you’re looking to enter the field or expand your leadership role in long-term care, Cambridge College of Healthcare & Technology’s online Bachelor of Science in Healthcare Administration (BHA) program gives you the flexibility to grow your career, without pausing your mission.
The Cambridge College of Healthcare & Technology’s Bachelor of Science in Healthcare Administration (BHA) program teaches the student that PDPM isn’t just a payment system. It’s a reflection of how well your facility captures and responds to clinical need. For forward-thinking administrators, it’s a chance to align patient-centered care with financial integrity, and that’s the kind of leadership Cambridge College of Healthcare & Technology’s Bachelor of Science in Healthcare Administration (BHA) program helps develop.