BrightStar CEO: What Non-Medicare Home Care Providers Should Know About PDGM

With a focus on institutional referrals and changes to therapy reimbursement, the Patient-Driven Groupings Model (PDGM) is going to rock the Medicare-certified home health world in 2020.

But private-pay and non-medical home care agencies may also see bottom-line impacts tied to PDGM.

Specifically, PDGM will likely create new opportunities for home care agencies looking to boost their community-based referrals, as the attention of home health providers gets shifted toward hospitals, skilled nursing facilities (SNFs) and other settings. Additionally, next year’s payment overhaul may likewise make the recruiting of therapy staff somewhat easier, as many home health providers plan on reducing their overall therapy utilization.


Chicago-based BrightStar Care is among the organizations exploring PDGM’s potential consequences. With 340 locations and about $480 million in systemwide sales in 2019, BrightStar is one of the largest home care franchise companies in the U.S.

“In general, Medicare rates will be lower for community-based referrals than health system referrals,” BrightStar founder and CEO Shelly Sun told Home Health Care News. “I think home health agencies would gladly take both types of referrals if they had an abundance of labor. But the change in reimbursement under PDGM with the ongoing labor shortage is going to steer them to where reimbursement is higher.”

The national average turnover rate for all home health employees increased to 21.89% in 2019, a slight jump compared to the previous year, according to new data from the Hospital & Healthcare Compensation Services and the National Association for Home Care & Hospice (NAHC).


Currently, BrightStar’s referral sources are “across the board,” Sun said.

About 50% to 60% of its referrals are direct or through consumer word of mouth. Another 20% to 30% of its referrals come from hospitals or skilled nursing facilities (SNFs), with 10% to 20% coming from Medicare-certified home health and hospice agencies.  

Although PDGM may ultimately create community-based care gaps for home care providers to fill, it could also lead to more home health-home care partnerships, Sun noted.

To forge closer ties with hospitals and health systems, home health providers will need to demonstrate an ability to manage chronically ill patients on a longer-term basis following acute episodes — and that’s something home care agencies are experts at.

“We’ve developed relationships with many of the local and national home health agencies, often cross-referring for services and cooperating on marketing that tends to be geared toward the health systems,” Sun said. “Now, they have a greater incentive … for getting their referrals out of the health systems. I think they’re going to further want to partner [and] be in the hospital systems, seeing BrightStar as a value-based partner because of our emphasis on quality, Joint Commission accreditation and [point of care] data collection.”

Targeting $550 million in sales

Founded in 2002, BrightStar provides both medical-level in-home care and non-medical home care services. In addition to those services for clients of all ages, the franchise company also offers hospice care and runs a medical-staffing segment. 

Most recently, it was ranked No. 175 on Franchise Times’ Top 200+ List.

By and large, BrightStar is exploring PDGM’s impact to its bottom-line as it finishes a strong 2019. The franchise company expects to add a total of about 15 new locations by the end of the year, with existing franchisees seeing same-store sales growth of about 12% compared to 2018.

“We’re very happy with the double-digit growth there,” Sun said.

Highlights for BrightStar in 2019, she noted, include a significant investment into its technology capabilities and use. Similar to other home care leaders, Sun sees the ability to quantify home care’s success as a key to BrightStar’s future, especially as Medicare Advantage (MA) continues to open up.

Of the 3,148 MA plans available to Medicare beneficiaries in 2020, nearly 150 of them will cover in-home support services. Meanwhile, nearly MA 80 will offer benefits aimed at supporting caregivers, while nearly 60 MA plans will cover home-based palliative care.

“Just being able to say that you can reduce readmissions and reduce the cost of care without really having access to payer data to verify that [isn’t enough,” Sun said. “To me, home care is not painting an accurate picture of what we have the capability to do — or demonstrating that we’re actually doing it.”

Newly launched pilot programs played a big part in BrightStar’s 2019 as well. In total, the franchise company now has “six or seven” clinical-focused trials underway, in addition to three data studies and “three or four” tech-driven pilots.

“But we don’t disclose the specifics of those until we’ve incubated them and gotten those rolled out on a system-wide basis to ensure we have ample lead time and an advantage over our competitors,” Sun said.

Looking ahead, BrightStar expects to open 30 additional locations in 2020 while boosting same-store sales to $550 million. It additionally expects to open two new BrightStar Senior living locations next year, according to Sun.

PDGM and therapy

When it comes to growing its business, BrightStar is particularly bullish on its skilled home health services lines. Non-Medicare home health makes up about 20% of the company’s business today, but BrightStar has a three-year plan to eventually grow that to more than 30%, Sun said.

Meanwhile, therapy services only make up about 2% of its current revenue base.

In the Medicare landscape, many home health providers have historically relied on therapy-visit volume to drive revenue. PDGM, though, is designed to link therapy reimbursement with patient characteristics and need instead of sheer quantity.

As a result, some believe the change will inevitably trigger widespread therapy layoffs.

BrightStar isn’t expecting a large-scale impact to its therapy services because of PDGM — nor is it planning to ramp up its operations to possibly pick up home health’s slack next year. Even so, PDGM may have a slightly positive effect on therapy recruitment, which has been a difficult process in the past, Sun said.

“I don’t think [PDGM] will be a large-scale impact because we won’t dramatically change our business model for an ancillary service,” Sun said. “But will it make recruiting for therapists easier? I hope so.”

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