Staffing Tops PDGM as Home Health Industry’s No. 1 Challenge

While the Patient-Driven Groupings Model (PDGM) presents several hurdles and ample uncertainty for providers, many still view staffing as the in-home care industry’s No. 1 challenge. Additionally, despite PDGM’s magnitude, a substantial portion of the industry has not yet started to prepare for the overhaul.

Those are two of the main takeaways from the 2019 Home Health Care News Outlook Survey and Report, released earlier in February and sponsored by Homecare Homebase. The survey — conducted from November to December of last year — reflects the views of more than 680 participants who work within or alongside the in-home care space.

Finalized by the Centers for Medicare & Medicaid Services (CMS) at the end of October, PDGM is expected to transform home health agency operations by altering how therapy services are reimbursed, halving the traditional 60-day unit of payment to 30 days and shaking up case-mix weight calculations.

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Low Utilization Payment Adjustments (LUPAs) will undergo drastic reforms under PDGM as well. CMS estimates LUPA rates will drop from 8% to 7.1% once PDGM is officially implemented on Jan. 1, 2020, though industry experts believe they’ll go up.

While the payment overhaul 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.

Of those who participated in the HHCN survey, about half 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.

Although the in-home care industry has experienced a wave of consolidation and disruption by technology-driven companies, just 9% of respondents cited increased competition as 2019’s No. 1 challenge.

With unemployment levels at a historic low and minimum wage increases in many states — including Illinois, which on Feb. 15 officially moved forward with a plan to raise its minimum wage to $15 an hour by 20205 — it’s not a surprise that staffing remains a trouble spot.

Largely because of the aging baby boomer population, demand for home health aides and personal care aides is projected to grow 41% from 2016 to 2026, much faster than the average for all occupations, according to the U.S. Bureau of Labor Statistics.

With sky-high industry turnover rates, many home health and home care agencies have stepped up their retention efforts. Developing strong onboarding programs and making sure new hires feel supported and appreciated on their very first day are keys to keeping workers, according to experts.

Slightly less than 30% of HHCN outlook survey respondents reported that they have yet to begin for PDGM’s many changes. National Association for Home Care & Hospice (NAHC) President Bill Dombi recently addressed the lack of across-the-board PDGM preparation during a recent Disrupt podcast conversation.

“I think home health agencies are a diverse lot. They’re diverse in terms of size and diverse in terms of patient mix,” Dombi said. “That’s also true when it comes to being prepared for change. Home health agencies have been remarkably capable with dealing with change. But when I look at PDGM, I don’t see the industry across the board as prepared as they should be at this point, though PDGM isn’t going to start tomorrow.”

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