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PDGM for Home Health Care

The moment PDGM (The Patient-Driven Groupings Model) takes effect in the year 2020, the Centers for Medicare & Medicaid Services (CMS) looks to see their new edict change the landscape of home health care operations, specifically with regard to double billing. With PDGM representing the largest wholesale revamp in many years, agencies and providers will need to dedicate significant attention to using this year to ensure proper preparation. With the number of changes in store, inevitably some agencies will contest specific aspects of PDGM’s new requirements.



PDGMHomecare industry leaders, private business representatives, alongside established advocacy organizations like the National Association for Home Care & Hospice (The NAHC) have been vocally citing the difficulties vs the benefits of PDGM’s impending arrival in an effort to weigh alternatives for smooth adoption when the time comes. Originally a requirement of the Bipartisan Budget Act of 2018, PDGM was first conceived as a reasonable methodology to improve reimbursement for the scores of patients who are eligible to receive home health care benefits, further providing added incentive to discourage the over-providing of therapy and other services. PDGM also reduces the 60-day episode of care payment unit to thirty days.

An unintended consequence of the drastic changes involved with PDGM could be agencies over-reacting by levelling out their therapy offerings. Concern levied by various offices within the federal government asserting that the current system reimbursement model actually encourages unnecessarily high levels of therapy services since reimbursements rise with those levels, served as the inspiration for the overhauls contained within PDGM. Understanding that the intent of the new PDGM system is to quell or eliminate existing problems within the home health care PPS (Prospective Payment System), there is ubiquitous fear among agencies and industry figures that items like case-mix changes and adjustments in behavior will end up burdening homecare agencies.

PDGM presents one widely recognized challenge for home health agencies involving diagnoses. Estimates suggest that nearly 50% of the diagnoses permitted under the PPS will likely be rejected as ineligible to be classified as primary. With the new policies PDGM presents, case mix will be partially determined by a patient’s functional inabilities. Utilizing the corresponding OASIS assessment, episodes will be attributed to a singular grouping (of 12 possible groupings), with categories ranging from early and late, to a scoring system of low/medium/high, comorbidity adjustment, and designations of institutional or community referral. Subsequently this presents a scenario where over 430 combinations can occur under PDGM, while PPS presents only 153. Low Utilization Payment Adjustments (LUPAs) will also be analyzed with a far more scrutinized level of analysis.

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Within the current system, home health providers receive a LUPA claim for providing 4 or less visits over 60-day care episodes within any category of patient delivered care. Providers then in turn only get a standardized per-visit payment, no matter the cause for fewer recorded visits. The new PDGM rules will effectively transform that universal four-or-fewer rule and morphs it into 216 differing scenarios. In consequence, estimated LUPA rates are expected to fall from 8% to 7.1% once PDGM takes effect, with scattered predictions that they may increase.

CMS has weighed in with estimations that PDGM will create both winners and losers, with around 50% of homecare agencies experiencing an increase in reimbursements and the other 50% weathering lowered reimbursement rates.

PDGM will undoubtedly have different effects on different agencies. Across the board, the best thing providers can do to prepare for this new horizon is to educate their staffs on what is coming, change some of their behavioral practices, and give attention to rebalancing their patient populations. Seeking partnerships within the industry in areas such as telehealth and coding could yield important gains for agencies struggling with adjustment. Referral sources will also play an important role particularly with regard to making sure coders are prepared for the new rules. CMS will be carefully watching the implementation of PDGM, with a special eye on how money is flowing to agencies. Home health agency billing departments should be evaluating and assessing their performance and understanding of the rules throughout this implementation.

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On Jan 1st 2020 PDGM will go into effect, and in spite of the concerns, the new system does have the potential to open new doors of opportunity for some agencies. The system still has room for improvement, and many lawmakers consider it still a work in progress. Like many new rules and policies, it is expected that additional legislation will be introduced after PDGM takes hold, which will improve and update the system. The NAHC has already begun efforts to advocate for legislation that would stop Congress from enacting any new changes based solely on predictions of agency and patient behavior as opposed to actual events. A number of bills which involve areas of PDGM have already been floating around the Senate and the House of Representatives from members of both major political parties.

During this process, the voices of home health agencies and industry players will play a crucial role in how PDGM takes shape and reaches its final version.

For more information on this topic, home health care industry news, or on Home Health Software technology, email us at Info@Alorahealth.com

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