Why Home Health Therapy Contractor Aegis Isn’t Stressing About PDGM

Among its many changes, the Patient-Driven Groupings Model (PDGM) aims to completely refocus how home health providers are paid for the therapy services they deliver, mainly by moving away from visit volume as the determining factor in calculating reimbursement.

When the Centers for Medicare & Medicaid Services (CMS) first proposed PDGM in July 2018, some industry experts believed the payment overhaul marked a “death knell” for therapy-heavy home health providers, along with the contract companies they often work with. With roughly six months to go before PDGM begins, that no longer appears to be the case — at least not for everyone.

In fact, Aegis Therapies sees PDGM as an opportunity for its business, according to Dawn Greaves, vice president of home health for the Frisco, Texas-based company.

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“I have not seen a big shift,” Greaves told Home Health Care News when asked about home health providers contracting with Aegis. “At least with our current contracts, we’re not experiencing a flight-type reaction.” 

With more than 1,400 locations in 41 states, Aegis is one of the country’s largest providers of contract rehabilitation and wellness services. For the most part, the company has cut its teeth working with skilled nursing facilities (SNFs), but it is increasingly looking to form home health inroads.

Currently, Aegis has more than 160 home health partners in 17 states, according to the company, which is led by President and CEO Martha Schram.

“I view home health as such a critical part in the delivery of rehab services effectively,” Schram told HHCN. 

A team-based approach

Aegis contracts with home health providers in several different ways.

At times, the company takes charge of a home health agency’s therapy operations so far as Conditions of Participation (CoPs) allow, becoming a core part of its team. In other cases, Aegis simply supports an agency’s therapy business, reinforcing in-house staff as needed.

“With some of our providers, we do all of their therapy,” Greaves, a physical therapist by training, said.

Historically, therapy has largely driven home health reimbursement under the Prospective Payment System (PPS), put in place nearly two decades ago. Yet as a result of PDGM, nearly half of home health providers anticipate decreasing their therapy utilization come 2020, a recent National Association for Home Care & Hospice (NAHC) survey suggests.

As part of those plans, 28% of surveyed home health providers said they planned to decrease employed therapy staff next year because of PDGM, with 50% planning to keep employment levels the same as in 2019. 

When it comes to outside support, 36% of surveyed home health providers said they anticipate reducing use of contract therapy in 2020, with a slightly larger portion planning to keep utilization steady.

“The therapy [provisions] of PDGM are certainly a big change for the industry — not to have therapy feeding into the payment thresholds. That is a big change,” Greaves said. “But there are so many other pieces … as to how reimbursement is going to be determined. Sometimes, I think the therapy piece has kind of eclipsed that.”

PDGM uses 30-day periods as a basis for payment, with each period categorized into 432 case-mix groups with varying reimbursement levels depending on patients’ admission source, timing, clinical grouping, functional impairment and co-morbidities. 

Maintaining a strong therapy presence that feeds into a broader team-based approach to care will be pivotal to maximizing reimbursement under PDGM, as average reimbursement is substantially different across the functional impairment category.

For example, the average PDGM reimbursement amount for a “low” functional level is projected to be $1,835.97, according to a data analysis by BlackTree Healthcare Consulting. Meanwhile, average reimbursement amounts for “medium” and “high” functional levels are projected to be $2,113.72 and $2,306.65, respectively.

“The functional scoring in some of those categories makes a significant change — the difference between low, medium and high,” Greaves said. “If we’re not collaborating between therapy and nursing to help identify those functional pieces — and make sure we’re getting that accurately captured — then that’s an area that could hurt reimbursement. A lot of our conversations have been around that.” 

A whole new world

PDGM isn’t the only payment overhaul on Aegis’s radar. Because the contract therapy company also works in the SNF space, it has had to gear up for the Patient-Driven Payment Model (PDPM).

Generally, there are “a lot of similarities” between PDGM and PDPM, according to Aegis CEO Schram. Being well-versed in both models will ultimately give Aegis an edge in a post-acute care landscape shaped more by value than volume, she said.

“I think it will serve us well,” Schram said. “Having both a home health and a SNF focus [means that] SNFs will benefit from our home health portfolio — and vice versa. To be a solution to both of them in this new environment is really one of the very exciting pieces for us.” 

Schram previously spoke in-depth about Aegis’s PDPM outlook in a March podcast conversation with HHCN’s sister site, Skilled Nursing News.

So far, a lot of the home health agencies Aegis has teamed up with are smaller in size, typically doing less than $1 million in PPS revenue, according to Greaves. Aegis also works with some regional chains as well, however.

To some extent, agencies considering trimming their therapy departments may be thinking too short-sighted. While therapy may not be the big revenue driver it is under PPS, there’s ample research connecting improved patient functional ability to decrease hospitalization risk.

And in a value-based world, doing anything to jeopardize re-hospitalization rates is akin to shooting yourself in the foot, Greaves said.

“There’s good evidence that shows folks with a lower level of [activities of daily living] function have a higher risk of re-hospitalization,” she said. “They have a higher risk of institutionalization. If we’re missing their level of function or missing the opportunity to improve it quickly by delivering the right, effective and appropriate care, then the research is showing us it could be [detrimental]. That’s not something an agency wants to see.”

Once PDGM kicks into gear, some experts believe home health and in-home therapy providers will start being more open-minded toward telehealth solutions, which hasn’t really been encouraged in the past from a reimbursement perspective.

Aegis — which currently doesn’t offer telehealth — falls into that group. 

“[Today], visits drive reimbursement, so agencies aren’t really encouraged to not provide them,” Greaves said. “Now with PDGM, we can look beyond the visit and think about what we can do from maybe a telehealth perspective. How can we have an increased number of contacts with the individual or patient to help drive compliance, understanding, condition management and those pieces — and how will that impact outcomes?” 

“That’s a whole new world we’re ready to explore,” she said.

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