Primary Diagnosis Changes Among PDGM’s Most Overlooked Aspects

The Patient-Driven Groupings Model (PDGM) is just nine months from taking the home health care industry by storm. By now, operators should have started preparing for the sweeping adjustments on tap for 2020 — but taking the right steps at the right time is crucial to ensuring success.

Among its high-level changes, PDGM removes perceived incentives to over-provide therapy services and cuts the 60-day episode of care unit in half. On a granular level, PDGM is much more complex, experts caution.

“I don’t want you to think everyone is going down in a blazing flame because that’s not the case, but you do need to look [at how PDGM will impact you],” said Melinda Gaboury, co-founder and CEO of Healthcare Provider Solutions Inc., a consulting firm serving the home health and hospice industries.


Since PDGM was introduced last summer, Gaboury’s firm has been evaluating the new regulations and how they will impact providers.

Gaboury shared her insights at the 2019 Illinois HomeCare & Hospice Council (IHHC) leadership conference in Itasca, Illinois earlier this month, highlighting a number of PDGM action items she urged agencies’ to prioritize today — or regret come PDGM’s Jan. 1, 2020, implementation.

Here are four of her biggest recommendations.


1. Ensure your software vendor is not pulling diagnosis codes from OASIS.

PDGM is mandated to be budget neutral under the Bipartisan Budget Act of 2018 — but that doesn’t mean every provider will get its usual piece of the pie when the new model takes effect.

Instead, determining payments will become more complicated.

One key component in determining reimbursements under PDGM will be patients’ clinical group assignments. As such, it’s extremely important to ensure software vendors understand from where to pull diagnosis codes, Gaboury said.

“Clinical groupings will be based solely and completely on the primary diagnosis of the patient that is reported on the claim — not the OASIS,” Gaboury said. “Yes, they should match, but they should pull from the claim.”

One reason for that has to do with specificity. OASIS can only fit six diagnosis codes, while claims can contain up to 25 and paint a much more comprehensive picture of each patient, which is essential to maximizing payment under PDGM.

“You need to ask your software vendor today where the diagnosis codes are going to be pulled from that go on your claim,” Gaboury emphasized to IHHC conference attendees. “Today, I guarantee you they’re being pulled from the OASIS.”

2. Require your coders to stop using primary diagnoses that can’t be grouped under PDGM.

About 40% of the diagnoses allowed for under the current Prospective Payment System (PPS) will not be accepted as primary diagnoses under PDGM — a change some industry leaders have called potentially disastrous.

However, agencies can get ahead of potential problems by educating coders sooner rather than later, Gaboury said, pointing attendees to the Centers for Medicare & Medicaid Services (CMS) online Home Health Agency (HHA) Center.

There, operators can find a list of all 43,278 primary diagnoses acceptable under PDGM. Operators will find the comprehensive list in the “ICD-10 DXs” tab of the Excel spreadsheet in the PDGM Grouper Tool CY 2019 file listed on the page.

“Take that Excel spreadsheet to whoever is doing your coding and tell them, ‘Do not, as of today, send me one more plan of care or one more OASIS or one more claim that has a primary diagnosis that is not on this list,’” Gaboury said.

In conducting PDGM analysis for a number of agencies nationwide, Healthcare Provider Solutions has yet to evaluate a single agency who would be unaffected by the changes if they continued current practices.

“There has not been a single agency in any state in this country we’ve done evaluations for that have had 100% of diagnoses in use today that would group under PDGM,” Gaboury said.

Again, the problem is specificity.

“If you have a patient that has a code that requires you say it’s their left side, their right side … and your nurses don’t know which side it is, you’ve got a problem,” Gaboury said. “[Under PDGM,] the codes are going to have to be reflective of that, or you’re not getting paid.”

The most common diagnosis she’s seen that will not be accepted under PDGM is generalized muscle weakness, followed by generic hypertension diagnoses.

3. Educate your staff about OASIS questions on grooming and hospitalization risk.

In addition to clinical groupings, functional groupings will play an important role in patient groupings, and thus, reimbursement.

PDGM designates functional impairment — low, medium or high — based a number of OASIS items, including grooming and risk for hospitalization.

Neither factor is tied to payment calculation under PPS, so it’s important to educate clinical staff members who complete OASIS on how to properly answer questions related to grooming and risk for hospitalization.

“Most of them are probably flippantly getting through [those questions] just to get through them because we’ve never had any emphasis to either one of those items before,” Gaboury said.

4. Talk to your software vendor about the changes to LUPA levels.

Under PDGM, Low Utilization Payment Adjustment claims will also change drastically.

Currently, agencies receive LUPA claims — which are standardized, per-visit payments — if they provide four or fewer visits during a 60-day episode of care.

But under PDGM, that universal rule is broken down into hundreds of different scenarios.

When PDGM takes effect, LUPA threshold will vary from two to six days, depending on clinical category, for the newly shortened 30-day payment period.

In general, CMS assumes that agencies will add one to two extra visits per billing period to receive the full payment rate and avoid a LUPA.

But because LUPA level is different for each of PDGM’s 432 possible case-mix adjusted payment groups, it’s important agencies get on the same page with software vendors as soon as possible, Gaboury said.

“[Ask them]: ‘When you calculate our HIPS code in the new model, you are going to tell us what the LUPA level is for that case mix weight, right?’” she said.

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