PDGM is Coming!
For almost 20 years, home health providers have operated within and been reimbursed based upon a national standardized 60-day episode called the Home Health Prospective Payment System (PPS). This means Medicare makes payments based on this standardized 60-day episode, which is adjusted for the relevant case-mix weight and wage index. The payment is “bundled” for all covered Home Health services provided during a 60-day episode of care.
The case-mix adjustment accounts for patients with different clinical needs. Information is obtained from the Outcome and Assessment Information Set (OASIS), a comprehensive assessment that providers complete for each patient at admission and every 60 days (recertification). Home Health PPS uses a case-mix classification system (153 different categories) to adjust for case mix and assign patients to a Home Health Resource Group (HHRG).
Responses to selected OASIS items are used to determine three domains: clinical severity level, functional severity level, and service utilization. Episode timing is also a variable in the case-mix adjustment. All of these variables result in the Home Health Resource Group (HHRG) used for payment.
The Patient Driven Groupings Model (PDGM) is a new payment model that relies greatly on patient/clinical and functional characteristics and other patient information to put Home Health services into payment categories that will more accurately articulate the Medicare Home Health benefit. In addition, PDGM eliminates therapy thresholds (service utilization) for adjusting Home Health payments.
Another change with PDGM is that the unit of Home Health payment will change to a 30-day period of care instead of the 60-day episode of care. CMS finalized PDGM this year in the Home Health final rule with an implementation date of January 1, 2020.
There are five case-mix variables involved in PDGM:
1. Admission Source. The patient will be admitted to Home Health services from either an Institutional or Community source. This information will be collected from the Medicare
2. Timing. This means the period of care is early or late. This information will also be collected from the Medicare claim.
3. Clinical Grouping. This is the primary reason the patient is receiving Home Health services. This information will come from the principal diagnosis on Home Health claim.
4. Functional Impairment Level. This reflects the level of functional impairment as identified in certain OASIS items.
5. Comorbidity Adjustment. This takes into consideration whether the patient has certain medical conditions that impact home health resource use. This information
will come from secondary diagnoses on the Medicare claim.
A 30-day period of care will be grouped into one sub-category of these five variables. This payment model results in 432 possible case-mix groups that will determine payment. While this sounds more complex than PPS, PDGM utilizes many of the same components of the current case-mix system, but in a much more clinically relevant way. It truly is patient driven.
With less than six months remaining until PDGM begins, it’s critical for home health clinicians to understand accurate primary diagnoses coding under PDGM. Nearly 40% of the diagnoses allowed for under the current payment system (PPS) will not be accepted as primary diagnoses under PDGM. This is a huge change for our industry.
Education for Advantage Home Health Services’ Operations and Clinical Staff
Advantage Home Health Services has already addressed the need for education of all managers, clinicians, coders, intake, quality improvement and compliance staff on the new payment model and the implications of it.
Surveys conducted recently across the home health industry are showing that most field clinicians are not aware of what PDGM is and what it means for the home health agency. Advantage Home Health Services is taking the information and breaking it into bite-sized chunks for all levels of staff.
In addition, we are outsourcing our coding and OASIS review functions to experts in coding and OASIS review. Who better than a certified coder/reviewer to assign the correct codes and sequencing, and to apply the correct coding conventions/rules to all of the diagnoses listed by the clinician who has assessed the patient?
In the coming months, our RN and Therapy staff will be given additional education on capturing all pertinent clinical findings upon assessment of each patient, as this will largely drive reimbursement. Our Intake Team will be included in our education sessions because – under PDGM – intake is critical to getting all of the required information for the opening clinician.
Stay tuned for more information as these next few months pass. It will be 2020 before we know it!