PDGM’s Co-Morbidity Changes May Trigger Substantial Payment Bump

To fine-tune operations ahead of the Patient-Driven Groupings Model (PDGM) with the hopes of maximizing reimbursement, many home health providers have shifted their referral focus to institutional settings. But there are also substantial dollars tied to patients’ co-morbidities, an idea that has largely fallen by the wayside when it comes to PDGM preparation.

“It’s somewhat of a neglected topic,” David Merk, founder and CEO of Home Health Gold, told Home Health Care News. “There are definitely dollars involved in co-morbidity scoring, however.”

Designed by the Centers for Medicare & Medicaid Services (CMS) with the intention of more closely aligning reimbursement to actual level of care provided, PDGM categorizes 30-day payment periods into 432 different case-mix groups — with some more lucrative than others. To do so, the model uses five main filters based on admission source, timing, clinical grouping, functional impairment and co-morbidities.


Depending on a patient’s secondary diagnoses, a 30-day period may receive no co-morbidity adjustment, a low co-morbidity adjustment or a high co-morbidity adjustment. When present, a low co-morbidity adjustment will amount to a projected $210 payment add-on during an episode of care, while a high co-morbidity adjustment will lead to a roughly $630 bump.

That may not seem like much when dealing with thousands of dollars, but it’s “real money” that could end up being 20% of a home health agency’s overall payment, according to Merk. While the high co-morbidity adjustment presents a hefty bump, it will be difficult to obtain and relatively infrequent, he added.

“I would guess you’re not going to see a high co-morbidity value more than 10% of the time, as a rough estimate,” said Merk, whose company was acquired by home health technology firm Axxess in March 2018. “And it will be very difficult to ‘game,’ which is the way it should be.”


In general, directly correlating reimbursement to co-morbidities is a major shift from the current Prospective Payment System (PPS), which only indirectly factors in co-morbidities through OASIS questions.

To help keep up on patient co-morbidities, agencies should leverage the various technology solutions available to them, Tammy Ross, senior vice president of professional services at Axxess, told HHCN.

“Using technology to help with that tracking is going to be essential, I believe,” Ross said.

As part of PDGM’s co-morbidity classification system, CMS takes into account certain “pairings” — likely situations where agencies have to do extra work to care for a patient with multiple illnesses or conditions. It’s these pairings that will often propel agencies into the high co-morbidity adjustment category, Ross said.

Broadly, pairings are often grouped with wound problems, such as stasis ulcers or pressure ulcers.

“When we go back to what the intent was with PDGM, one of the drivers was to incentivize home health agencies, so to speak, to take care of more wound patients,” Ross said. “They noticed we weren’t doing that as we should across the board. When you start looking at these pairings, you’ll see a lot of them include diagnoses requiring wound care.”

Other pairings, for example, include Type 1 or Type 2 diabetes with Parkinson’s disease.

Despite the potential opportunity that co-morbidities offer, home care agencies need to stay judicious in documentation, being careful to only list co-morbidities associated with a patient’s plan of care, Ross advised.

“I think there may be a tendency for agencies to use diagnoses that aren’t applicable to that actual plan of care, with the hope that one of them is actually going to stick and would create a pairing,” she said. “I would recommend against that. We still must follow the Conditions of Participation, and we still have to follow the intent of the plan of care.”

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