If you’re a home health agency, you probably have January 1, 2020, circled on your calendar. Not because it’s the start of a new year, but because that’s the day the Patient-Driven Groupings Model (PDGM), the new Centers for Medicare & Medicaid Services (CMS) payment model, takes effect.
If you haven’t yet drawn up a strategic plan or begun preparing for PDGM, you may be feeling a bit overwhelmed. But you're not alone and it's not too late to get started. Even for those HHAs that are deep into their plans and preparations, PDGM is raising uncertainty and presenting challenges.
Finalized by CMS in October 2018, PDGM is a game changer for HHAs. It’s expected to shake up HHA operations by changing how therapy services are reimbursed, cutting the traditional 60-day unit of payment to 30 days and altering case-mix weight. Low Utilization Payment Adjustments (LUPAs) are set to drastically change under PDGM as well. Although the new payment model was mandated to be budget neutral by the Bipartisan Budget Act of 2018, it could lead to an overall payment reduction of 6.42% based on certain behavioral assumptions.
Despite these seismic shifts that PDGM will bring, a sizable portion of the home health industry hasn’t yet begun to prepare.
The 2019 Home Health Care News Outlook Survey and Report, released in February 2019 and sponsored by Homecare Homebase, found that almost 30% of respondents had not yet begun preparing for all the myriad changes. The survey — conducted between November and December 2018 — collected the views of more than 680 participants who work in or with the in-home care space.
If you haven’t yet begun preparing for PDGM, don’t panic – but do get out of spectator mode. Whether you’re currently making changes to prepare, in the planning stages or still thinking about what needs to be done, you no doubt have questions and concerns. We asked a few industry experts for tips and advice on the challenges presented by PDGM and how to best prepare your organization for the January 1 deadline.
If you’re a home health provider, experts advise you to spend the rest of 2019 preparing for PDGM. Some of the biggest challenges include:
The number of therapy visits will no longer determine reimbursement.
PDGM will bring new payment episode timings: 30-day periods will be implemented as a basis for payment vs. the 60-day periods used now.
About 40% of diagnoses allowed under PPS will not be accepted as primary diagnoses under PDGM.
Episodes will be assigned to one of 12 groupings, categorized as early or late; assigned a functional score of low, medium or high; assigned a comorbidity adjustment; and categorized as an institutional or community referral. This results in 432 different combinations under PDGM, as compared to 153 under PPS.
Many industry insiders are busy getting their organizations ready for the new payment model. Karri L. Wright, Senior Director of Product Management for Homecare Homebase in Dallas, said “PDGM is forcing us to solve the industry challenges it is driving, such as how to succeed in a system that potentially penalizes some for the handful of others that are ‘working the system.’”
Wright listed several hurdles that she believes PDGM presents for the industry, including:
“If the behavioral adjustments stick, a big challenge will be how to operate effectively, efficiently and ethically while remaining profitable. CMS assumes everyone will adopt specific behaviors, so agencies that code and care plan appropriately rather than adopting these presumed behaviors will lose.
“RAPs and final claims will need to be submitted sooner, and twice as often. This means billing and payment activities are effectively doubling for HHAs, but not necessarily the revenue.
“Not only have Home Health Resource Group (HHRG) determinants become more complex with the introduction of comorbidities, but also therapy is being removed and Admission Source added. In effect, CMS is swapping something that agencies can influence to something that they have less opportunity to influence.”
While PDGM certainly will bring many new challenges for HHAs, it also may exacerbate existing ones.
Kelly Curtis, Director of Home Health Revenue Cycle for LHC Group in Lafayette, Louisiana, said staffing is always a challenge for HHAs – and one that will remain challenging under the new payment model.
The aging U.S. Baby Boomer population is expected to increase the demand for home health and personal care aides 41% by 2026 – much faster than the average for all occupations, the U.S. Bureau of Labor Statistics reported.
According to a Home Health Care News report, staffing actually tops PDGM as the home health industry’s biggest challenge. Half of those who participated in the HHCN survey cited “staffing” as the No. 1 challenge to the in-home care industry in 2019. Another 18% of respondents identified “changing payment models” as the top challenge, while 20% reported “regulatory changes” as their main concern.
Curtis said the key staffing challenges lie in operations, intake and billing, especially because claim volumes are likely to increase under PDGM.
“It will impact all areas of clinical, intake and billing. There are so many ways that it can impact an agency,” she said. “First of all, we must get the referral source correct to capture revenue accurately, and to bill compliantly.”
Wright agreed and noted that it will be necessary for staff members to capture more data than they have in the past.
“We expect our customers to want to get more of the details right further upstream in their processes. As such, we expect intake staff to want opportunities to capture things that they haven’t necessarily had to capture in the past, such as additional diagnoses that in the past may have been perceived as not as important to capture,” she explained. “We expect clinical staff to want more visibility to things they haven’t necessarily needed to see in the past. We also expect billing staff to need more support from the upstream clinical staff to help speed up the timing of RAP and final claim submissions.”
Preparing for PDGM
While final PDGM language isn’t expected to be released until late fall, providers should not wait until then to start preparing because PDGM will affect almost every part of a home health organization. This is a test you can’t cram for.
Curtis advises her peers to start early with a plan and to partner with technology. LHC has taken other steps to get ready, as well.
"We have five internal workgroups that have been meeting since January 2019, representing all disciplines and areas of care coordination, including Clinical Modeling & Intervention Planning; Utilization Management; Coding, Revenue Cycle Management, Homecare Homebase, and Dashboard; Education & Training; and Communications & Sales," she said. "We've also partnered with our vendors to assist with developing technology to gain efficiencies."
According to Home Health Care News, in the months after PDGM becomes effective, an upswing in home health audits is expected.
Wright said Homecare Homebase is aligning all its teams and customers to be sure they know what’s coming and when, how they’ll meet challenges and how customers “can help us help them.”
“Our company has regular touch points with internal cross-functional teams to collaborate and stay informed,” she added. “We also provide multiple channels for customers to receive information and provide feedback, including webinars, customer focus groups, and a dedicated customer-only website.”
Wright offered some advice for providers about preparing for PDGM, no matter how far along they are in the process:
Communicate. “Be sure to educate your staff about PDGM and how you expect operations to change in its wake. Focus on coders and billers, in particular, but really do a full assessment. Make sure they know how your expectations of them will differ from today, if at all,” she said. “Don’t forget your referral sources! They’ll need to understand the different things you may be asking of them and why.”
Self-Assess. “Build your plan based on an analysis of your data. This is the only way to truly understand how this change can impact your financial and operational performance, so that you can adjust accordingly.”
Be a Sponge. “There is a lot of information and advice out there for the taking. There are many PDGM webinars, articles and blogs out there. While you certainly want to apply your critical-thinking skills in absorbing such a variety of inputs, there is a lot of good information to be gleaned – take advantage of it!”
Be Aggressive. “The window of opportunity is small. PDGM will be here before you know it. Q2 is already slipping away, so time is running out. If you don’t already have a plan to adapt, you’d better get busy! Make sure you understand how your EMR will support you in adapting, so that its capabilities are part of your plan.”
So how do you begin preparing, if you haven’t already? Experts advise HHA leaders to start by conducting a full gap analysis to determine exactly how their operations will change with PDGM.
Educating your staff about PDGM is also a good idea. According to Home Health Care News, in the months after PDGM becomes effective, an upswing in home health audits is expected.
“We often see an increase in the volume of Medicare audit activity when documentation requirements or payment models change,” Matthew Wolfe, partner at the North Carolina-based healthcare legal firm Parker Poe, told Home Health Care News.
If providers don’t change their operations to meet PDGM’s requirements or neglect to adjust their processes correctly, it will affect their reimbursements as well as potentially prompt an audit into their HHA.
If you want to best protect your HHA against audits in the new PDGM world, make sure your agency has the data and documentation to back up your processes and to justify any operational changes you make to comply with PDGM.
Experts also advise providers to boost their compliance processes, including putting into place a robust compliance program. Such a program consists of conducting internal records reviews quarterly, if possible, as well as checking up on employees and providing ongoing training.
In the new PDGM world, your HHA will need at least one strong, competent coder as well. Coding work will be more important than ever under PDGM, but about 60% of HHAs currently do not have processes in place to double-check their coding work, a DecisionHealth survey revealed.
In addition, HHA leaders must be prepared to invest time and money into all this preparation work.
“While we pursue innovative opportunities, we are definitely dedicating significant resources to solving PDGM-driven challenges,” Wright said.
While challenges definitely exist, PDGM also presents opportunities for HHAs. Wright sees improving patient outcomes as one potential plus.
“The increased scrutiny on coding really reinforces the idea of ensuring that documentation and diagnoses coming from a referral source are accurate, sufficient and support the reason for the referral,” she said. “This also sets the stage for the HHA to ensure early on that the diagnoses and care plan align with the referral source’s documentation and reason for referral. Ultimately, there is a patient depending on everyone to do the right thing. An aligned care team can drive better care coordination and better outcomes for the patient.”
Has your home health organization begun preparing for PDGM? What challenges are you currently struggling with and what opportunities do you see ahead? Let us know!