Senate Lawmakers Introduce New Legislation Urging Evidence-Based PDGM Changes

Newly introduced bipartisan legislation in the U.S. Senate is targeting the widely opposed behavioral adjustments set to hit home health agencies next year under the Patient-Driven Groupings Model (PDGM). If passed, the legislation would require the Centers for Medicare & Medicaid Services (CMS) to base Medicare reimbursement rates on observed evidence and data, instead of on assumed changes.

Introduced Monday by Senators Susan Collins (R-Maine), John Kennedy (R-La.), Bill Cassidy (R-La.), Rand Paul (R-Ky.), Debbie Stabenow (D-Mich.), Doug Jones (D-Ala.) and Jeanne Shaheen (D-N.H.), the bill (S. 433) is similar to one of several PDGM opposition bills introduced last year.

However, key updates to this bill include fine-tuned language about “observed evidence” and phasing of payment changes, limiting losses or gains to 2% per year to ensure budget neutrality within 10 years.


PDGM was mandated to be budget neutral by the Bipartisan Budget Act of 2018.

CMS introduced PDGM last summer as a way to supposedly improve reimbursement for all types of patients eligible for home health benefits and remove perceived incentives to over-provide therapy services. Additionally, the model cuts the 60-day episode of care unit of payment to 30 days.

While PDGM is designed to improve common issues that exist under the current home health care Prospective Payment System (PPS), providers have criticized the model’s payment adjustments based on the behavioral assumptions, which could be inaccurate and unfair, they’ve cautioned.


If unchanged by the time PDGM takes effect in 2020, the behavioral assumptions could cost home health agencies a loss of about about $1 billion in reimbursements and threaten the industry, according to National Association for Home Care & Hospice (NAHC) President Bill Dombi and LHC Group (Nasdaq: LHCG) CEO Keith Myers, who also serves as chairman of the Partnership for Quality Home Healthcare (PQHH).

Already, both Dombi and Myers have lauded S. 433 and the lawmakers behind it for working to mitigate the behavioral adjustment threat and have voiced their commitment to helping advance the legislation.

“Refining the PDGM approach is critically important to home health care for America’s growing senior population,” Myers said. “We strongly support this legislation, which ensures CMS uses actual data and observed evidence when making payment adjustments to properly align payment with patient characteristics and quality.”

Represenatives Scott DesJarlais (R-Tenn.), Rep. Vern Buchanan (R-Fla.), Rep. Terri Sewell (D-Ala.) and Rep. Garret Graves (R-La.) are among the House lawmakers who have sponsored legislation targeting PDGM.

CMS officials have consistently stood by all facets of PDGM, including the behvioral adjustments aspect.

“The transition to the new PDGM payment model promises to be disruptive for home health agencies that have operated under the current model since 2000,” Dombi said. “It is not prudent to magnify that disruptive impact by reducing payment rates based on pure assumptions on how agencies will react. The legislation will provide protection from such disruption and ensure continued access to care for nearly [3.5 million] Medicare beneficiaries who rely on home health services every year.”

S. 433 also includes provisions that would allow waivers of the homebound requirement for Medicare beneficiaries in certain instances, making home health care accessible to more people.

After being introduced, S. 433 was read twice and referred to the Senate Committee on Finance.

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