The home health industry is just a few short months away from the biggest reimbursement overhaul it’s seen in nearly two decades: Patient-Driven Groupings Model (PDGM).
As the new model’s Jan. 1, 2020 implementation nears, providers nationwide are preparing to navigate its complex changes. That’s especially true when it comes to therapy utilization, which will no longer be an automatic reimbursement driver under PDGM.
As a result, some home health providers are unwisely shying away from therapy in general, risking the success of their business and the outcomes of their patients. Instead, agencies should be leaning into data to more efficiently provide about the same amount of therapy under PDGM, improving their outcomes, star ratings, and reimbursements in the process.
Consequences of cutting therapy
Specifically, nearly half of all home health care providers are planning to decrease their therapy utilization in 2020 in response to PDGM. That number comes from a National Association for Home Care & Hospice (NAHC) survey of nearly 700 providers.
Industry-wide, consultants are advising agencies against getting out of the therapy business. Take Keith Boroch, vice president of McBee, a full-service health care consulting firm that has more than 300 home health clients.
“I’ve heard people saying they’re going to eliminate therapy completely, which is ludicrous,” Boroch says. “You can’t. Yes, you have the elimination of therapy as a financial inducement — but the reality is that PPS and PDGM really aren’t that different. The financial penalties are just much higher.”
Under PPS, home health agencies are guaranteed a certain reimbursement for providing therapy visits — prompting federal watchdogs to suggest some providers have grown unfairly profitable by over-delivering therapy services. PDGM, on the other hand, is designed to shift payment away from therapy thresholds and more toward patient characteristics and outcomes.
That’s one reason Boroch advises against therapy cuts under PDGM: doing so could hurt an agency’s patient outcomes, raise red flags to federal anti-fraud groups, and even cause one’s star ratings to take a hit.
“Across all of the new case-mix adjusted payment groups under PDGM, we have data that illustrates 5-star agencies utilize more therapy, generally speaking, than 4-star agencies,” says Derek Michael, regional vice president with HealthPRO® Heritage. “And 4-star agencies utilize more therapy than the national average.”
HealthPRO® Heritage is one of the largest independently owned, diversified therapy management companies in the country. Their new “Care Pathways to Success” tool provides home health agencies a road map to success under PDGM, tying utilization to each possible patient classification based on best practices.
“Therapy plays a vital role under PDGM, no different than it does under PPS,” Michael says. “Home health agencies need to take a closer look at patient characteristics, specifically as identified by payment factors, and then align therapy utilization with the patient presentation.”
Optimizing therapy under PDGM
Under PDGM each payment period will be categorized into one of 432 case-mix groups to determine reimbursement. Five factors go into determining those groups.
Due to the complexity of the hundreds of possible options, McBee consultants recommend agencies explore using data tools to succeed.
“The biggest challenge for organizations is that they’re not sure what to do,” Boroch says. “But companies like HealthPRO® Heritage have taken the time to develop a model to provide quality outcomes balanced with financial performance across their clients. Overall, most organizations alone wouldn’t have the resources to do that.”
Care Pathways to Success overlays Medicare claims data with therapy utilization across all of the new 432 case-mix adjusted payment groups under PDGM. On top of that, it factors in utilization from 4-star and 5-star agencies to develop care pathways that will keep agencies financially viable and clinically successful.
The strength of such data tools is that it can factor hundreds of patient characteristics at once to best advise therapy utilization and eliminate guesswork — a herculean task for any agencies without such tech.
“It’s up to us — therapists, nurses and home health agencies — to assure appropriate levels of care with PDGM’s patient classifications,” Michael says. “Using data to provide alignment is going to be even more critical than it is now, simply because there is such wide payment variation among each of the classifications.”
Those variations come in the tune of $1,800 from the lowest payment to the highest payment in each clinical grouping.
“If you’re not taking a close look at utilization and resource allocation for the cost side of the equation, it’s going to be problematic for your agency,” Michael says.
To learn more about the HealthPRO® Heritage’s Care Pathways to Success, visit its PDGM resource page.