Why Functional Status Matters More Under PDGM

The Patient-Driven Groupings Model (PDGM) will shake up how and when home health providers are reimbursed compared to the current Medicare model, which has been in place since 2000.

Among PDGM’s changes, for example, functional status and the OASIS M1800s section will matter significantly more.

That’s a major change for home health providers, who are generally not used to factoring in how well homebound patients can groom, dress or bathe themselves when calculating reimbursement, J’non Griffin, president and owner of full-service consulting company Home Health Solutions LLC, told Home Health Care News.


“The calculations of the M items will be a little bit different under PDGM than they were under the Prospective Payment System (PPS),” Griffin said. “There are fewer M items that will be part of your case-mix, and then there are two new additional items that we’ve been answering as part of OASIS but that haven’t been a part of case-mix.”

Overall, functional level is one of five categories affecting payment in the upcoming overhaul, mandated to be budget neutral by the Bipartisan Budget Act of 2018 and set to go into effect on Jan. 1, 2020. The other categories include admission source, timing, clinical groupings and comorbidity adjustment.

In PDGM, 30-day periods will be placed into low, medium or high impairment levels based on information from OASIS. That impairment level then determines the expected use of resources during the 30-day period and will be used to calculate payment for care episodes.


Because functional items will matter more under PDGM, home health providers should start evaluating their resource use related to functional deficits now and consider training staff on OASIS-D assessment, Griffin said.

“Every item in the OASIS is important because currently all of it affects risk adjustment. But a lot of people don’t pay attention to those [functional] items,” she said. “Functional items tend to be underscored anyway, even in our current system.”

Part of that underscoring, according to Griffin, is because of high turnover in home health care space.

“As our profit margins have shrunk, so has our internal staff, mainly being [quality assurance] and education,” she said. “Those are going to be some of your most important people going forward, but a lot of agencies have done away with them.”

In addition to functional status, a patient’s risk of re-hospitalization will also matter more once PDGM kicks into gear.

Specific M items that will matter more include M1800-Grooming, M1810-Dressing Upper Body, M1830-Bathing and a handful of other items.

“ICD-10 coding is not as important under PPS,” Griffin said. “It’s important, but not as important as it will be under PDGM.”

About 39.5 million adults have difficulty when it comes to physical functioning, according to the U.S. Centers for Disease Control and Prevention.

Medicare beneficiaries with both multiple chronic conditions and functional impairments are twice as expensive to the Medicare program than individuals who have multiple chronic conditions alone, past findings suggest.

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