Six Questions to Consider when negotiating new therapy contracts

As we approach the second anniversary of the Patient Driven Payment Model (PDPM) many skilled nursing organizations find themselves once again negotiating new therapy contracts. During the past two years the industry was less focused on reimbursement and contract pricing and more on surviving the challenges of the pandemic. As life begins to return to some sense of normalcy it is time to revisit your therapy contracts under PDPM.

Here are some questions to consider when evaluating new contract therapy service contracts:

  • Do I understand the PDPM pricing methodology being used to calculate therapy costs and how it impacts my therapy bill?
  • How do I determine if the pricing being charged is fair and provides for the proper amount of therapy required by our residents?
  • How have patient outcomes compared since the implementation of PDPM compared to outcomes under RUGS?
  • Has contract pricing led to a change in the volume of therapy being delivered for each of the payer sources?
  • How has therapist staffing changed since the move to PDPM and what is the impact on my residents and their quality of care?
  • How do I compare contract proposals from companies that may be using different pricing methodology?

The answers to these questions will help you to evaluate your current contract therapy provider, the fairness of their latest contract proposal and help you compare proposals from multiple providers. There is no single question or answer that will ultimately determine the most favorable contract terms, but collectively they will provide insight into the value you have received and provide a fair comparison across different company proposals.