PDGM’s Lead Author Gets Candid About Pros, Cons of Revolutionary Model

Set to take effect on Jan. 1, the Patient-Driven Groupings Model (PDGM) is as controversial as it is revolutionary.

The model’s therapy changes and behavioral assumptions are two reasons why. Home health operators worry their operations and patients will suffer as a result of those modifications, among others.

Even PDGM’s lead author, Lisa Grabert, acknowledges that possibility. The House Ways and Means Committee alumna shared her thoughts on the model and its backstory last month at the 2019 Home Health Care News Summit in Chicago. Overall, Grabert believes PDGM is well intentioned but may come with some unintended negative consequences.

Take therapy, for example.

“It may go a little far on the therapy side,” Grabert, who is currently a research professor at Marquette and Georgetown universities, said. “I don’t think we know what the full effect of that is going to be.”

Under the current Prospective Payment System (PPS), home health agencies are automatically reimbursed for therapy services based on the number of visits they provide. When PDGM takes effect, that will no longer be the case.

Many home health providers have expressed concerns that the 0-to-100 therapy change will lead to inappropriate cuts to therapy, ultimately resulting in worse care for patients who need those services. In fact, about 25% of providers say they plan to reduce therapy utilization by more than 10% in 2020, according to a National Association for Home Care & Hospice (NAHC) survey.

With the Patient-Driven Payment Model (PDPM) implemented on Oct. 1, it’s a trend already taking place in the skilled nursing world.

In general, PDGM’s therapy changes were born out of a desire to cut back on fraud and abuse — not from an urge to punish agencies operating within the law. However, providers in the latter camp will likely also feel the effects of the changes, at least in the short term, Grambert acknowledged.

“We had total therapy reimbursement to no therapy reimbursement,” Grabert said. “The right spot might be somewhere in the middle. We’re not going to know that until we actually monitor and study the system, so there may be a big swing afterwards to try to correct for that.”

When it comes to referral reimbursement changes, Grambert was more optimistic. Under PDGM, institutional referrals will be met with higher reimbursement than community referrals because data shows institutional patients cost more to care for.

“That was one of the things I was really attracted to as a policy maker in the model and one of the things I recognized CMS had put on the table and that resonated with members of congress,” she said. “The old payment system felt like it was not recognizing enough nuance. That aspect … moving forward, I think plays a bit more characteristically with what we see the Medicare population needing in the next 20 years.”

Grambert didn’t touch on arguably the most controversial aspect of PDGM: it’s behavioral assumptions.

PDGM assumes providers will always choose the coding option associated with the highest reimbursement and do everything possible to avoid LUPAs. Industry insiders argue that’s not the case.

Instead, they believe such assumptions are unfounded and will lead to an 8.1% cut for providers come 2020.

Advocates and operators continue to advocate against such assumptions, and bipartisan legislation to eliminate them has been introduced in the House and Senate.

Still, Joanne Cunningham, executive director of the Partnership for Quality Home Healthcare (PQHH), who sat on a panel with Grambert at the summit, urged providers to continue speaking out.

“Lawmakers care what their constituents think,” Cunningham said. “If you want to help build support for this piece of legislation, it’s not just making the case to your hometown lawmaker. It’s being the squeaky wheel that continues and is very repetitive in your communications to those offices.”