Patient-Centric Care: Adapting to PDGM in Home Healthcare

The Patient-Driven Groupings Model (PDGM) is a new home health payment system implemented on January 1, 2020, by the Centers for Medicare and Medicaid Services (CMS). It has brought about changes in reimbursement methodology that impact clinicians, therapy services, and the overall workflow of home health agencies. In fact, it is a significant change from the previous payment model and is designed to align reimbursement with patient needs better. Let’s adapt to PDGM in home healthcare as an effort towards patient-centric care:

Billing Changes under PDGM

The Patient-Driven Groupings Model (PDGM) has significantly changed the home health billing process. Here are the key billing changes under PDGM

  • 30-Day Payment Periods

PDGM replaces the previous 60-day payment periods with 30-day payment periods. As a result, home healthcare agencies bill for each 30 days, making the billing cycle more frequent.

  • Requests for Anticipated Payment (RAP)

Home healthcare agencies continue to submit Requests for Anticipated Payment (RAP) at the beginning of each 30 days. For agencies certified before January 1, 2019, the split percentage payments for the first 30-day period are 60/40, and subsequent periods are 50/50. Also, agencies certified on or after January 1, 2019, will receive a “no pay” RAP at the beginning of each 30-day payment period.

  • Final Claims Submission

A final claim must be submitted at the end of each 30-day payment period. The final claim includes all relevant information and documentation for services provided during that period.

  • Low Utilization Payment Adjustment (LUPA)

LUPA thresholds have changed under PDGM. Each of the 432 case-mix groups has its own LUPA level, ranging from 2 to 6 visits. Not only this but agencies may receive per-visit payments based on the volume of visits within a 30-day payment period.

  • Comorbidity Adjustments

The Comorbidity Adjustment is based on the comorbid conditions (secondary diagnoses) reported on the home health claim. In fact, ICD-10-CM coding is the only source for establishing this grouping level, impacting reimbursement.

  • Specific Clinical Groupings

Reimbursement is now determined based on specific clinical groupings derived from ICD-10-CM coding. Thereby, agencies must ensure accurate and detailed coding to place patients into the appropriate payment categories.

  • Shift in Focus from Volume to Patient Needs

Did you know? PDGM in home healthcare eliminates therapy service thresholds as a determinant of reimbursement. Home healthcare agencies must focus on delivering care that aligns with the patient’s needs and goals rather than providing a predefined volume of therapy.

Myths and Misconceptions

  • Diminished Need for Therapy: PDGM does not necessarily diminish the need for therapy. The model emphasizes patient needs, and therapy is still a valid and reimbursed care component.
  • Therapy Only for Institutional Discharges: PDGM does not limit therapy to patients discharged from institutional settings. Therapy is determined based on patient needs, not discharge sources.
  • No Support for Maintenance Therapy: PDGM supports maintenance therapy when it is deemed necessary for the patient’s well-being.
  • Services Beyond First 30 Days: Services can be delivered beyond the first 30 days; PDGM does not restrict care to a specific time frame.

Preparation is Key

You can adapt to PDGM in your home healthcare by preparing well in advance with the help of the following practices:

  • Develop a Robust PDGM Strategy

Healthcare providers should have a comprehensive PDGM strategy covering aspects such as documentation, coding, therapy utilization, and ongoing education. In fact, successful agencies are those that have followed a well-prepared strategy and continue to adapt as needed.

  • Patient-Centered Documentation

There is a need to emphasize the importance of patient-centered documentation under PDGM. You should ensure that documentation is specific, addresses all OASIS questions accurately, and coordinates consistently across assessments. Furthermore, timely and thorough documentation is crucial for success under PDGM.

  • Avoiding Unacceptable Diagnosis Codes

You should also educate staff on unacceptable primary diagnosis codes under PDGM, which do not fall into the 12 clinical groupings used for payment determination. In fact, claims with unacceptable codes will be “returned to the provider” (RTP), leading to payment issues. That’s why there is a need to train billing staff to collect more specific information upfront to prevent unacceptable codes.

  • Examining Therapy Strategy

You should acknowledge that therapy volume is no longer a reimbursement determinant under PDGM. There is a need on the part of your home healthcare agencies to carefully review their therapy strategy, avoiding drastic reductions or elimination, which could raise concerns with CMS. While addressing overutilization, you must ensure they follow the plan of care and not decline therapy when it’s necessary.

Outsourcing is the Need!

If internal billing and coding teams are struggling, consider outsourcing billing and coding tasks to the experts of 24/7 Medical Billing Services. As a professional medical coding and billing company, they can provide expertise and knowledge for accurate and timely claim submissions. In fact, their team can help you to alleviate the burden on your in-house staff, ensuring you are paid accurately under PDGM.

See also: Optimizing Hospital Finances Through Outsourcing Medical Billing Services


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