As NAHC puts it, the “Patient-Driven Groupings Model (PDGM) was created by the Centers for Medicare and Medicaid Services and is slated to debut on January 1, 2020. PDGM will revolutionize the payment methodology for all Medicare Home Health Agencies (HHAs) in the United States.” We attended the PDGM summit in Chicago organized by NAHC and are here to give you the scoop.

NAHC President Bill Dombi

Mr. Dombi kicked off the conference giving some background into the home health payment systems history leading into PDGM. The message was clear. This is not a perfect payment system (nor could such system exist) but it is what CMS has come up with to address the payment reforms mandated in the Bipartisan Budget Act of 2018. He pointed out that NAHC is working with senators to address some of the weaknesses in the proposed plan and referenced bills S.3458, S.3545, HR.6932 and S.433 as examples. For example, S.433 works to address the behavioral assumptions that lead to a decreased base rate for PDGM. It proposes no initial adjustment based on anticipated behavior but adjustments put in place if evidence of adjusted billing behavior is found in agency data.

He cautioned agencies to avoid dramatically changing service trends to try to bolster the bottom line. CMS will be looking at billing metrics from PPS versus PDGM and if they see a shift in service utilization for patients with similar clinical profiles, agencies will face consequences. A shift in service provision will indicate to CMS that either an agency over utilized services under PPS or is under utilizing services in PDGM.

Financial Model

Jhonna DeMarcky from CliftonLarsenAllen and Nick Seabrook from Blacktree were next to the podium. Financial report revenue projections will shift from 60-days to 30-days to reflect the new billing periods. Agencies need to make sure that their billing departments will be ready for the PDGM change as it will double the billing workload with 2 RAPS and 2 claims for each 60-day episode. They also cautioned that the decision not to pay RAPs to newly certified agencies may lead to a phase-out of the RAP for all agencies in the next few years.

Recommendations included ensuring that agencies have adequate cash flow to survive the transition to the new payment model. As all staff adjust, processes will slow which will impact billing turnaround. It is important to review claims now and project how your agency will perform under the new model. A cash flow example scenario was presented using an average PPS claim rate and assuming about 57.5% of that would be reimbursed in period 1 and 42.5% in period 2 under PDGM.

Ensure that your claims do not include “questionable encounter” diagnoses which are diagnoses that do not have a clinical grouping under PDGM. Analyze your distribution of primary diagnosis clinical groupings to determine where your patient population will be categorized. Identify your LUPA risk by reviewing frequencies for each 30-day period within your PPS episodes.

Clinical Aspects of PDGM

Cindy Campbell from Fazzi and Joe Osentoski from QIRT tackled the subject of how to clinically manage patients under PDGM. Both emphasized the importance of ensuring the best clinical outcomes for the patient and safeguarding best practices. Their recommendations included ensuring your staff have a thorough understanding of the OASIS and diagnosis coding. They also discussed managing expenses by reviewing visit and supply utilization.

For diagnosis coding, agencies should be reviewing diagnosis codes from referral sources and trying to get more detailed information on general or unspecified codes now. Certain codes have already been confirmed to not be included in clinical groupings such as M62.81 Muscle Weakness. Use of this code as a primary diagnosis will cause your claim to return to provider for recoding. Also, ensure your system will also allow diagnosis updates in the episode as new clinically relevant codes may increase subsequent period reimbursement.

OASIS M1800-M1860 and M1033 will drive your functional level under PDGM. Ensure your clinicians understand how to address these items. Collaborate with therapists to assess patients since nursing staff tends to underscore them. Speaking of OASIS, get back into the habit of using the Other Follow-Up (M0100=05) for unanticipated changes in patient condition. If such a change occurs during their first 30-day billing period, completing this OASIS will capture the patient’s decline in function which may lead to additional reimbursement in the next 30-day period.

Most importantly, clinical operations must be streamlined. In the world of PDGM interdisciplinary care coordination is essential. Primary Case Managers are in the driver’s seat, navigating the way to achieving patient care plan goals. The Primary Case Manager must be able to communicate well with patients and other members of the clinical team to keep everyone motivated and accountable from admission to discharge.

The clinical team needs to collaborate and communicate to ensure the most accurate information is being documented. Patient’s function can vary depending on many factors such as the time of day. Clinicians who are encouraged to share information with each other will have a much clearer picture of the patient’s overall medical condition and will be able to create more effective treatment plans. This will eliminate duplicative treatments and help all clinicians to achieve their planned goals. Use periodic case conferencing and geographic units (or pods) to promote teamwork. With clear goals and directed interventions, consider using LPNs, PTAs and COTAs for patient care to help control costs.

Clinical Managers are responsible for assigning and overseeing team assignments as well as reviewing plans of care, understanding and monitoring quality metric achievement, keeping staff educated and accountable, assessing staff competence and controlling visit and supply utilization.

PDGM Operations

Cindy Campbell from Fazzi was joined by Maria Warren from McBee in this next session that tackled PDGM Operations including intake and referrals, claims, orders and supplies.

Information obtained at intake is vital. The clinical grouping and comorbidity dimensions of PDGM reimbursement are driven by the relevant diagnoses for the patient. Episode timing (early or late) and source of admission (institutional or community) can be identified at time of referral as well. An example was given showing a 45% reduction in payment for a late community patient from an early institutional patient with identical clinical attributes.

Recommendations included development of a PDGM steering committee now to identify issues and modify processes. Review the intake process to identify ways to make it easier. Create an intake checklist to ensure all vital information is captured. Develop scripts for staff to use when requesting more information. Inservice intake personnel on identifying questionable encounter codes and obtaining more specific information from the referral source.

The 30-day payment period revenue cycle was presented with estimated timelines for RAPs and claims. RAPs and claims would still be subject to the same conditions as under the PPS system except RAP subsequent 30 day periods may require updated diagnosis codes and OASIS if applicable. Final claims will not be paid until RAPs are submitted and paid and RAPs will still be subject to auto-cancellation with untimely claim submission. The updated auto-cancellation policy will be the greater of 60 days from the end of the 30-day period or 60 days from the RAP paid date. Claims will not have to be billed by date since an unsigned order in one 30-day period may not affect the subsequent period. CMS will recode claims with incorrect early or late timing and community or institutional admission source. All final claim adjustments will continue under PDGM but PEPs and outliers will be adjusted for 30-day periods.

Keep in mind the home health episode will still remain a 60-day period and plans of care should cover 60-days where appropriate. Agencies also need to prepare for billing and payment posting staff to have an increased workload due to the increase of RAP and final claim billings and payments that will occur under PDGM.

Order tracking is another area agencies should ensure is being managed appropriately. Audit your current order return rates to ensure that the time between an order being sent and received averages less than 7 days. Review and reinforce agency policy on frequency of sending out and following up on orders (at least every 7 days). Reach out to physicians to figure out the best way to ensure timely cooperation. Agency supervisors must get involved in the process as early as 21 days from the date the order was sent out.

Supply utilization must be monitored with trunk and closet supplies secured and tracing back to the proper patient. Ensure that supply costs are included on patient claims so that future CMS episode cost analytics include those expenses. Periodically review your supply formulary to ensure it is still relevant to your practice. Consider implementing quantity or dollar limits to orders to better control ongoing costs. Review supply utilization reports by patient, by clinician and by diagnosis.

And we finished this section off with more LUPA information where it was recommended that the LUPA analysis include reasons for the LUPA including frequency of patient refusal of service. They also suggested that if the analysis showed the incidence of LUPAs were greater than 10% of all 30-day periods that this should be a performance improvement project focus.

PDGM Data Analytics

Sharon Harder of Excel Health presented this section which included using the PDGM Grouper Tool CY 2019 on the CMS Home Health Agency Center page to calculate your estimated case mix weight under PDGM. Using an episode with a value of $3,298 under the current PPS system, several scenarios were examined with care episodes less than or greater than 30 days and different function and comorbidity levels. Different scenarios resulted in up to a 49% increase in reimbursement to a 29% decrease in reimbursement depending on the conditions.

CMS published the Home Health PPS Limited Data Set which costs $1200, is too large to examine in an Excel spreadsheet and has some primary diagnosis recategorization which may not be accurate. It shows 2017 data split from the 60-day PPS episode into the PDGM 30-day periods. CMS also published the PDGM Agency Level Impacts file which will demonstrate by agency CCN the projected financial impact for your agency under the PDGM model. Unfortunately, this file also reclassifies episodes whose primary diagnosis is not included in any of the clinical groupings and looks for another diagnosis that can be classified.

The top five diagnoses presently used by home health which will be considered questionable encounters under PDGM and will result in a return to provider on your claim if submitted as a primary diagnosis were M62.81 Muscle Weakness-General, R26.89 Abnormality of Gait, M54.5 Low Back Pain, R26.81 Unsteadiness on Feet and R53.1 Weakness among others. Make sure that your agency is looking for more specific coding now for any of these existing codes to ease the transition into PDGM.

Another thing to keep in mind going into PDGM is that CMS removed total knee replacements (TKR) from the Medicare inpatient-only list. This means that TKRs can be classified as outpatient procedures and therefore will be considered community patients under PDGM since they will not have a qualifying inpatient stay. In fact, 59.5% of American Association of Hip and Knee Surgeon members have been instructed by their hospitals to schedule TKRs as outpatient procedures according to an article on Health Leaders. This is important for home health agencies to know to identify the correct admission source.

To wrap up her session, she pointed out that there is some opportunity for agencies to increase and diversify their admissions. A study of hospital discharges showed that 40% of patients coded for home health (with a discharge status of 06) did not end up receiving home health care. This could be an opportunity to reach out to hospital discharge planners and educate on the benefits of home health care.

Two items are affecting skilled nursing facilities (SNFs) which may provide home health referral opportunities. First, they are experiencing a shift in their payment model that will eliminate therapy thresholds which may cause them to seek to discharge patients sooner. Second, value based purchasing for SNFs only have one measure – the 30-Day All-Cause Readmission Measure. If agencies can demonstrate a low incidence of patient readmission to inpatient facilities, this would prove very valuable to the SNF looking to improve their performance under this measure.

Technology Considerations

Keith Crownover of Delta wrapped up the presentations at the conference by talking about what agencies should expect from EMR vendors. Communication is key. Agencies should work to keep their vendor informed of any new information for PDGM and EMR vendors should already have an understanding of PDGM and at least a loose plan of how to address these changes. EMR vendors must be able to communicate what tools will be ready and the timeframe for that readiness so that agencies can plan staff education and policy and procedure revisions accordingly.

Agencies will need to ensure their system can track and monitor 30-day periods of care, recertifications, LUPAs, visit utilization, documentation timeliness, orders, billing, revenue and coding.

The Wrap-Up

It is important that agencies begin to examine their operations now to minimize the impact the transition to PDGM will have. For more information on PDGM, see our 2019 Home Health Final Rule article as well as our Potential Impact to Agencies Under PDGM article. Monitor the CMS Home Health Patient-Driven Groupings Model webpage to keep up to date. Make sure you are subscribed with CMS and your MAC to receive e-mail updates for home health. We will continue to keep you updated on any pressing information as it is released.