Why Home Health Providers Should View PDGM as a Patient-Classification Model

Understandably, home health providers typically view the Patient-Driven Groupings Model (PDGM) first and foremost as a payment overhaul — the most significant in nearly two decades. But with the right perspective, PDGM can also be leveraged to help drive change, strengthen care planning and improve patient quality outcomes.

That’s something home health providers would be remiss to overlook, Anthony D’Alonzo, director of clinical strategy and innovation at Bayada Home Health Care, told Home Health Care News.

As one of the largest home health providers in the country, Moorestown, New Jersey-based Bayada operates across more than 360 offices in 23 states and six different countries, providing a range of home health, hospice and pediatric services inside the home. Founded in 1975, Bayada has since transitioned to a nonprofit model.


“There are different ways of looking at PDGM,” said D’Alonzo, who spoke to HHCN during an interview at its April 10 Capital + Strategy event in Washington, D.C. “In one sense, it’s a payment model, obviously. But it’s also a patient-classification model. We really haven’t had uniform systems of classifying patient need across different providers in the industry.”

To prepare for PDGM, home health providers should start using the model’s more complex and targeted patient-classification system to gauge how much care different types of patients will likely need, D’Alonzo said.

Along those lines, providers currently casting a relatively broad net for a certain category of patient should begin refining that intake.


“In PDGM, if you say you’re going to cast this heart failure net, that might be too broad,” D’Alonzo said. “It’s not specific enough to align with this new classification system. Heart failure coming from the community-referral source with no co-morbidities, no triggering co-morbidities, is very different than heart failure from a hospital-admission source with high co-morbidities.

PDGM and care management

PDGM — which goes into effect on Jan. 1, 2020 — uses 30-day periods as a basis for payment, with each period categorized into 432 case-mix groups with varying levels of reimbursement. Admission source, timing, clinical grouping, functional impairment level and co-morbidity adjustment are the five main categories that help determine case-mix.

In general, the varying levels of reimbursement is meant to correspond with how much care a certain type of patient will ultimately need.

Due to PDGM’s classification system, care coordination and management will become increasingly important, D’Alonzo said. Similarly, home health providers will likely need to establish more interdisciplinary processes involving their nursing, physical therapy, occupational therapy and speech therapy staff.

“The hard part is figuring out quickly and at scale how you can have a team-based, coordinated approach to every person coming on service,” he said. “And aligning it with the PDGM classification system.”

“This is forcing us to come out of discipline silos a little bit, which I think is a positive,” D’Alonzo added.

Bayada’s PDGM focus

Bayada — which recently entered into a value-based agreement with AmeriHealth Caritas built on reducing potentially preventable hospital admissions, re-admissions and emergency room visits — has a four-pronged approach to PDGM planning.

In addition to care planning, the home health company is focused on billing, for example, as well as electronic medical record (EMR) and systems changes. How Bayada handles coding and questionable encounters is likewise a major focus.

Questionable encounters are claims submitted without a primary diagnosis matching one of PDGM’s clinical groupings.

Based on 2017 data, the Centers for Medicare & Medicaid Services (CMS) estimates that 15% of all episodes will fall under questionable encounters under PDGM.

Those area areas all providers should think through, D’Alonzo said, though noting smaller agencies are often initially more concerned with back-office and revenue-cycle impacts.

“I think once you get past the immediate, you start thinking about, ‘OK. How does care planning change? How does care design change? Can we use PDGM as a driving force to improve quality outcomes? And really improve the way we provide care?’” he said. “To make it more team-based care planning instead of, ‘OK. What’s the nursing goal? What’s the therapy goal? Therapists, go do your thing in a vacuum.’”

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