Despite being one of the largest and most powerful home health companies in the game, Amedisys Inc. (Nasdaq: AMED) isn’t immune to the uncertainty that comes with the looming Patient-Driven Groupings Model (PDGM).
The Baton Rouge, Louisiana-based provider has a plan of action, even if the model goes into effect on Jan. 1 as is — partially basing Medicare reimbursement rates on assumed changes instead of data, which could mean a roughly 6.4% payment cut.
“If it goes out in its worst form — which is the current cut — we think we’ll be fine,” President and CEO Paul Kusserow said during a Tuesday presentation at the RBC Capital Markets Global Healthcare Conference. “We think we’ll get through it. We have a bunch of things we’ve been working on.”
Specifically, 40 Amedisys employees are devoted to PDGM preparation every day, he said. And earlier this month, the company even began “practicing” for the new model at eight of its locations.
Such efforts are made possible, in part, by Amedisys’s size. The company has more than 21,000 employees in 471 facilities across 38 states and Washington, D.C. In Q1 alone, Amedisys’ home health segment generated $310.1 million in revenue.
Four levers
Amedisys has four basic levers it’s preparing to pull if need be to continue to operate optimally under PDGM — even in its “worst form.” Those include maximizing staffing, driving appropriate utilization, examining physical therapy and maximize coding, executives shared during the presentation.
Specifically, Amedisys is looking to maximize the use of licensed practical nurses and physical therapy assistants.
Using more LPNs — rather than RNs — when appropriate for skilled nursing visits could help improve the company’s bottom line, CFO Scott Ginn said.
“On the LPN/RN [front], for every 1% moved there, it’s roughly half a million dollars of EBITDA improvement,” Ginn said.
Meanwhile, Kusserow emphasized that the move would ensure nurses and physical therapists are “practicing at the top of their license,” also opening more qualified workers up for more complex job duties.
Another point the executives nailed home: coding will become especially important if behavioral assumptions remain when the model takes effect.
“[We’re looking] at what’s driving the most utilization of resources, [and] if that in a secondary diagnosis, if you put that to a primary, you’re going to get higher reimbursement,” Ginn explained. “We’re not saying that’s going to happen in every instance, but we’re pulling all the data and looking at where those opportunities are.”
Legislative efforts
Amedisys’s reimbursements are expected to remain flat or slightly positive under PDGM, according to Ginn. But not every agency will be as lucky.
Kusserow previously told HHCN that PDGM — as it currently exists — would hurt the industry as a whole. That’s one reason he remains intent on fighting PDGM’s behavioral assumptions.
Kusserow is one of many industry leaders who continues to support bicameral, bipartisan legislation that takes on PDGM’s behavioral assumptions.
“What we’re trying to do at this point is to get as many people signed on so when there’s an opportunity to attach it to something, it’s really not that controversial because so many people have signed on,” Kusserow said.
Supporters on the Hill believe the legislation will be attached to other health care legislation set to move forward in September or October, Kusserow said, noting the legislation already has enough support in the Senate but still needs more support in the House.
Amedisys is also in ongoing talks with the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services (HHS).
“I am kind of sanguine about the idea that there might be some action on behavior assumptions, and we’re working really hard,” Kusserow said. “I’m hopeful that people listen, and I’m confident we’ve got good legislative folks on this, so I feel very good about it.”
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