PDGM Strategies

The dust still hasn’t settled on the Patient-Driven Groupings Model (PDGM), but this doesn’t mean that you can’t start putting together a strategy today that will protect your bottom line. As a matter of fact, getting an early start is even more important.

Remember that PDGM is a big opportunity for home health agencies that avoid mistakes and prepare. It will help boost reimbursement for all types of patients but also cut back on incentives that promote unnecessary care.

PDGM promises potentially serious impacts to home health coding and home health billing dynamics starting January 1, 2020. That’s why we’ve put together this list of tips to build a strategy that will address your cash flow issues before they even happen.

Watch Your Data
So many things in healthcare depend on data and your success under PDGM is no different. Data will help you figure out where you stand under the new reimbursement model and ideally, provide a guide as we move into 2020 and see how things really play out.

Home health agencies that leverage data to inform operations will be in a better position to make decisions and respond to any future changes as we move down the home health billing road. Any agencies that don’t will be at a disadvantage.

When you’re building out your PDGM data strategy, make sure you’re leveraging it to develop a picture of your patient population, including clinical and referral makeup. According to Home Health Care News, these will be increasingly important under PDGM since reimbursements will be shifting away from being volume-driven and moving into a foundation of patient characteristics [1]. If a big data push feels like too much under your current circumstances, consider partnering with a data and analytics company that is tracking PDGM changes and understands your challenges.

Mind Your Timing
Under your current reimbursement models, timing might not be a priority. Under PDGM, you will need to make some changes. Take the example of patients who have received institutional care. CMS will pay higher reimbursement for anyone who has received care within the 14 days before their home health admission. Beyond that, early episodes will also bring in higher reimbursement.

The change might sound small, but that shift can make a difference of over $600 per patient per payment episode. But it doesn’t stop there — coding and billing will be impacted too, meaning any lags in your operations that seem insignificant today will start to have real impact next year.

Payment episodes will be cut in half, which means that home health billing and home health coding agencies will need to file twice as many Requests for Anticipated Payments (RAPs) and twice as many claims — many of which will need to be more detailed.

You can expect to see a drop in cash flow in the first few months of the transition, but if you plan now, you can rebound faster than if you adopt a “wait and see” position. Now is the perfect time to start building up your billing department and even outsourcing services to adjust for the predicted increase in frequency of claim submissions.

Talk to Your EHR Vendor
We’ve mentioned data and billing and they both point back to your EHR vendor.

Smart vendors are already getting ready for the change by releasing features to address PDGM. Talk to your vendor to find out what changes they’re making and what you can do now in terms of implementing upgrades and training your team to be prepared. Make sure to talk to them about how their system is handling these changes.

  • New payment episode timings: PDGM is breaking 60-day episodes into two 30-day periods.
  • Payment groupings: The number of payment groups and unique case mix potential is jumping for 153 to 432.
  • Low Utilization Payment Adjustments (LUPAs): Each Home Health Resource Group (HHRG) will have its own individual LUPA visit threshold, which resets every 30-day payment period.
  • Diagnoses changes: Around 40% of the diagnoses under PPS will not qualify as primary diagnosis under PDGM.
  • Elimination of therapy thresholds: Therapy thresholds are out as a primary reimbursement determinant.
  • OASIS assessments: The Outcome and Assessment Information Set (OASIS) is going to stay on a 60-day cycle, but now on two payment periods instead of one, which now fall under five subgroups.

Educate Your Staff
If you haven’t started talking with your staff, explaining the nuances of PDGM, and discussing training options as we head into 2020, now is definitely the time to start.
CMS has provided multiple resources including [2]:

  • An Interactive Group Tool
  • National Provider Call Resources
  • Home Health Agency Center Spotlights
  • Email contact for questions from home health agencies

These resources will be useful in building general awareness, but you will need to build alignment of education between billing and operational staff members. Your intake staff will be pushed to gather as much information as possible about a patient’s history, while referral sources and physicians will face new pressures to send and sign orders promptly. In the past, the penalty might have been small, but under PDGM, any delay can impact timing and stall billing.

PDGM will be challenging for all home health coders and home health billers. If you haven’t rethought your stance on outsourcing and technology, now is a wonderful time to take a fresh look at both to help ensure you have as smooth a transition as possible. If you need help in getting that strategy started, it’s time to talk to 3Gen Consulting.

[1] B. Bryant, “Without Data, Home Health Agencies ‘Flying Blind’ into PDGM,” Home Health Care News, 13 August 2019. Available: https://homehealthcarenews.com/2019/08/without-data-home-health-agencies-flying-blind-into-pdgm/.
[2] U.S. Centers for Medicare & Medicaid Services, “Home Health Patient-Driven Groupings Model”. Available: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/HH-PDGM.

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