Creative PDGM Therapy Strategies for Home Health Agencies

When the Patient-Driven Groupings Model (PDGM) takes effect on Jan. 1, 2020, therapy-heavy home health agencies will have to get creative to ensure the new model doesn’t hurt their bottom line.

PDGM eliminates therapy-visit volume as a determining factor in calculating reimbursements, meaning therapy will no longer be a guaranteed revenue-driver for home health agencies. Rather than blindly cut back on services, providers should coordinate with therapists and capitalize on underutilized resources to ensure a smooth transition, experts say.

“There are so many ways to look at this and really try to dig down into those process and clinical approaches to make sure you’re making the right changes,” Ellen Strunk — president of Rehab Resources and Consulting Inc., which provides consulting, training and audit services to post‐acute care providers — told Home Health Care News.


Additionally, if home health providers abruptly shy away from therapy services, that may raise oversight alarms — a potentially unwelcome outcome, as the industry is already facing increased scrutiny from federal watchdogs.

“If you suddenly stop providing therapy or decrease significantly the amount of therapy you’re providing, that’s going to be a big red flag to Medicare,” Strunk said.

Creative approaches

Before making any therapy changes because of PDGM, Strunk advises home health agencies to consult with the people who provide the services in question — therapists themselves.


“It’s important to involve therapists in discussions to ensure that patients continue to receive the services that they need, rather than just assuming therapy is one of those services that can be easily cut,” she said.

While PDGM will change providers’ revenue streams, it won’t change the conditions and illnesses of their patients. On top of that, the need to improve outcomes becomes even more important, as the reimbursement model is more value-based than volume-based.

As such, working with therapists can help providers come up with creative solutions to deliver quality outcomes for patients, Strunk said.

One solution experts have suggested is supplementing therapy services with telehealth and telemonitoring when appropriate.

Telemonitoring is a type of telehealth tool in which caregivers and doctors can use technology to monitor patients remotely.

“If the patient has gotten to the point that they can do their own home exercise program, what better way to make sure that’s happening than a therapist watching them via remote monitoring?” Melinda Gaboury, co-founder and CEO of Healthcare Provider Solutions Inc., said during a March conference. “I’m not saying you’re going to replace therapy with remote monitoring. I’m saying it is a possibility of supplementing having a registered therapist in the house.”

Additionally, others have suggested agencies maximize their use of physical therapy assistants (PTAs).

Because they are paid less than therapists and can provide some of the same services, PTAs can help some providers gain efficiencies, Kenneth Miller, chair of the practice committee for the home health section of the American Physical Therapy Association, told HHCN.

“Agencies that don’t use PTAs should look into what the state’s scope of practice and supervision rules are and explore it if they haven’t before,” Miller advised.

Although worth investigating, the solution isn’t foolproof, as many states have strict regulations about the use of PTAs, he noted.

“In New York where I’ve been practicing, the PTA supervision requirements are more strict, so there are ways of increasing the PTA utilization, but it may not come at a savings to the organization,” Miller said. “Though their salaries are less, there are non-billable visits of the oversight of the PTA by the therapist making non-billable co-visits.”

In other cases, agencies are already using as many PTAs as possible.

One mechanism guaranteed to help all home health agencies prepare for PDGM is CMS’s interactive grouper tool, which calculates agencies’ expected payments under the new model, Miller said.

Though some experts have doubted the grouper tool’s accuracy, at the very least, it provides agencies a place to start.

“My recommendation is don’t change utilization patterns,” Miller said. “Continue to provide the care that’s necessary. If you notice with the PDGM grouper [tool] you’re losing money, see where you’re losing money, whether it’s an over-utilization of care [or] do you have too many recertifications? LUPAs?”  

Strunk agrees, stressing the importance of coding and best practices.

“There could be a lot of improvements and enhancements made just by ensuring that the coding is done properly, just by improving a process that exists,” She said. “If you find you’ve got outliers, do you have therapists who aren’t following best practice guidelines? Is there a better way to continue to treat these patients and remain revenue positive?”

Apart from the grouper tool, BlackTree Healthcare Consulting has released reimbursement estimates of its own, giving agencies further guidance on how they’ll be financially impacted by PDGM.

The firm estimates the most therapy-heavy agencies (in the top quartile in terms of nursing-to-therapy ratio) will see an average reimbursement cut of 9.6%. Meanwhile, agencies that are nursing-heavy (in the lowest quartile in terms of nursing-to-therapy ratio) are expected to see a reimbursement spike of 17.3%, according to BlackTree.

History repeats itself

While PDGM shouldn’t drastically change the amount of therapy agencies offer, history suggests it will.

“Every time Medicare has made a change, agencies have adapted,” Miller said. “When we went to a 10-visit threshold back in 2000, agencies raised utilization to hit that threshold, but it was a very narrow standard deviation because once you hit the maximum of 10 visits, you got the maximum payment for the episode, so any visit above 10 took money away from the maximum reimbursement. Some agencies were very particular with visit counting.”

As the visit threshold continued to rise over the years, the same phenomenon occurred, Miller said.

“History shows us many administrators and agency leadership will change how they’re providing care, not based on patient characteristics … but really based on where they’re getting their payment,” he said. “If they see they’re getting the same amount of money without providing therapy, then some agencies unfortunately will work in that way.”

As a result, both Miller and Strunk worry patient satisfaction and agency performance for those providers will suffer.

“Research shows that therapy can improve long-term functional outcomes and that therapy contributes to patient satisfaction,” Strunk said. “If an agency decides arbitrarily [cutting therapy] is going to be where my cost savings is coming from, then they will see the negative outcomes on their publicly reported measures, their quality reporting and their patient-satisfaction numbers.”

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