Spillover effect of the Patient Drive Payment Model on skilled nursing facility therapy delivery among Medicare Advantage enrollees

Abstract

AbstractIn a multi‐payer health care system, economic theory suggests that different payers can impose spillover effects on one another. This study aimed to evaluate the spillover effect of the Patient Driven Payment Model (PDPM) on Medicare Advantage (MA) enrollees, despite it being designed for Traditional Medicare (TM) beneficiaries. We applied a regression discontinuity approach by comparing therapy utilization before and after the implementation of PDPM in October 2019 focusing on patients newly admitted to skilled nursing facilities. The results showed that both TM and MA enrollees experienced a decrease in individual therapy minutes and an increase in non‐individual therapy minutes. The estimated reduction in total therapy use was 9 min per day for TM enrollees and 3 min per day for MA enrollees. The effect of PDPM on MA beneficiaries varied depending on the level of MA penetration, with the smallest effect in facilities with the highest MA penetration quartile. In summary, the PDPM had directionally similar effects on therapy utilization for both TM and MA enrollees, but the magnitudes were smaller for MA beneficiaries. These results suggest that policy changes intended for TM beneficiaries may spillover to MA enrollees and should be assessed accordingly.