The Patient-Driven Groupings Model (PDGM) is nearing “prime time,” though fears about home health industry destabilization remain.
As the largest payment overall to the Medicare home health benefit in decades, PDGM alone runs the risk of negative disruption. When matched with other regulatory headwinds rising at the same time, that risk is drastically magnified, according to Partnership for Quality Home Healthcare Executive Director Joanne Cunningham.
Home Health Care News recently caught up with Cunningham for a final PDGM status report before the model’s Jan. 1 implementation date. In addition to the upcoming overhaul, Cunningham also discussed her plans for the Partnership and 2019 at large
The Partnership for Quality Home Healthcare is a national industry advocacy organization based in Washington, D.C. Its members include several home health powerhouses, including LHC Group Inc. (Nasdaq: LHCG), Encompass Health Corp. (NYSE: EHC), Bayada Home Health Care, Elara Caring and others.
Highlights of HHCN’s conversation with Cunningham are below, edited for length and clarity.
HHCN: We’re just days away from PDGM going live. But before we dive into the latest news, can you give me your high-level thoughts on 2019 overall from the Partnership’s perspective?
Cunningham: I would say 2019 was a successful year for the Partnership, and that we were successful in highlighting our significant concerns with PDGM. We generated a lot of interest in legislation and had solid CMS engagement on trying to make PDGM better. I also would say that the Partnership and its members worked very, very collaboratively with the National Association for Home Care & Hospice (NAHC).
I think 2019 was a true model of working together to achieve a very specific outcome and goal, which was to highlight some of the big concerns and issues with our new payment system.
We talk so much about breaking down silos in health care. I feel like from an advocacy perspective, we almost have to do that, too, just because there’s so much going on. Everybody needs to be pulling from the same end of the rope.
It seemed like a crazy year in terms of regulatory twists and turns. How would you rate 2019, generally speaking?
I would not say it was crazier than expected. I think there are always twists and turns with any kind of big policy initiatives. The home health community was looking down the barrel of a significant new policy change and there was a lot of anticipation, trepidation.
But remember, PDGM came on the heels of a previous attempt at payment reform for the home health sector — HHGM. PDGM was, you know, an effort to improve upon that from the standpoint of CMS. After PDGM was introduced, we obviously had some strong feelings about needing more distance to travel. We wanted to make sure policymakers got this payment model, which now is imminently going to be put into place Jan. 1, right.
So, I would certainly say 2019 was a really active — very, at times, intense — kind of year. But I also think that we saw a lot of good traction from key places.
The initial version of PDGM from last year included a behavioral adjustment of about 6%. That eventually went up to 8.1%, then down to 4.36%. Do you think CMS ultimately got PDGM right, especially with that?
Well, here’s what I would say. I’m not sure CMS got it completely right. And I can talk through some of the maybe unintended consequences that may be of concern in 2020. But the final rule was certainly a big step in the right direction. I think that any kind of behavioral, assumption-based rate cuts are concerning. The argument of “waiting to see what the data yields” is certainly still something that the Partnership believes.
Whether we think PDGM is ready for prime time, that’s a whole different issue. I would not want to communicate that we think that’s the case.
You mentioned the unintended consequences of PDGM. What are some?
I think that 2020 is going to be a really, really important year because we’re going to have to carefully understand and pay attention to what system changes have occurred because of PDGM. I think the obvious one is whether CMS’s view that home health was over-utilizing therapy is correct.
I think we’re going to be looking at a lot of things. Some of my conversations with health staff have focused on the fact there are also likely going to be unintended consequences that we’re not even contemplating right now. A year from now, we’ll be evaluating PDGM on a whole different level. We’re going to be paying a lot of attention to how this rollout happened, what hiccups and pitfalls there were. And we’re going to be talking about whether the policy changes that occurred were good for the home health beneficiary, good for patient care.
PDGM is no longer months away. Is there anything left to know, or are all the chips on the table?
Well, I mean, January is go time, and providers are going to have to jump right in and make things happen. I don’t think January means that the entire PDGM system is fully ready to go. I also don’t think it means there aren’t going to be issues that come up. We’re going to have to be very proactive to make sure issues get fixed. The Partnership has been working with a group of CMS folks with weekly calls for about a month and a half, entirely focused on implementation and operational issues.
This is a big payment change and CMS is a very large organization. There’s a lot of different individuals who have various roles in home health, and some of those folks may not have the same knowledge about PDGM as others.
As an example, we have the interaction of the Review Choice Demonstration (RCD) that will be coming online early in 2020. We have a significant part of the system that is in Medicare Advantage (MA). Those teams of people within the structure of CMS are not as connected to the ins and outs of how PDGM is intended to work. So, perhaps there might be some bumps along the way that touch other parts of the home health system that we’re not fully appreciating.
Home health providers can be fully prepared. But that doesn’t mean physicians are. That doesn’t mean CMS is, right?
Right. And those are different stakeholder audiences that we’ve raised concerns about. We want to make sure that all the resources are available at CMS. For providers, make sure you educate and bring those audiences up to speed. There are a lot of different stakeholders that are going to be just learning about PDGM when it launches.
We’ve been following the Patient-Driven Payment Model (PDPM) from afar, watching how skilled nursing operators are handling it. Have you been tracking that rollout?
We have. The Partnership has had a number of discussions with our counterparts at the association level other folks knee-deep on PDPM implementation. And I would say, you know, their advice to all of us on the home health advocacy side was “make sure you are very aggressive about raising potential issues now that might come up.” There have been some hiccups and bumps along the way with PDPM. Early on, there were concerns about even getting paid timely. That’s a critical issue — many providers can’t go very long without getting paid. These are organizations that serve vulnerable populations. Cash flow is a serious challenge — always.
The advice that we got from some of our counterparts on the skilled nursing side was “stay on top of all of these issues that you are waking up in the middle of the night worrying about.” And make sure that you raise them and try to work with all the CMS resources to problem solve ahead of time.
Let’s pretend we’re talking in late January or even February. What do you think the early days of PDGM are going to look like exactly?
Well, I think that there’s the potential for some of the smaller providers to struggle, those that have less operational resources to do planning and put teams together to make sure that operationally or clinically they’re ready. We may see some of those smaller providers really having a difficult time.
I’ve heard from some of my friends in the state association world, as well from those on the national-association level. There are always concerns about, you know, what percentage of providers out there that are just going to really struggle with a system change like this. Many of these associations, especially the state associations, are going to get a number of red-alert calls from home health agencies that are not as prepared as they could have been. I do worry about that.
But I also worry about … this is a big model change. Even the best of planning and the best of preparations sometimes doesn’t prepare you for things, especially for the things that are not in your control that may relate to confusion on the contractor side, confusion from hospitals or physician groups.
You mentioned smaller providers and cash flow. We haven’t even discussed phasing out Requests for Anticipated Payment (RAP) yet. Can you briefly discuss the impact that could have on the industry?
Well, I think that you have a lot of big things happening at once. You have a huge payment model change with PDGM. You have RCD. You have the RAP phaseout. These things can have an interactive effect that is not a positive one. Too much change at once can be very disconcerting and destabilizing.
That’s why one of our arguments on not doing behavioral assumption rate cuts was, you know, let’s see how the system reacts. Let’s see how provider change occurs. Let’s see it without the interactive effect of a large cut within PDGM.
I don’t want to sit here sounding like PDGM is completely set in stone. There’s still the chance that it’s refined through Congressional action, correct?
Oh, yeah, for sure. We have 170 members of the House and Senate who know what PDGM is. They are concerned enough about it that they co-signed a piece of legislation. And I think that they are certainly going to be paying a lot of attention to how this system change occurs moving forward. You know, these are members of Congress who care deeply about the availability of home health to their constituents. They know how important home health services are for the Medicare population, the frail elderly.
And I also think that, next year, if there are other issues that need to be addressed from a legislative standpoint, now we have a base of support that is already there.