‘Disruption Is Upon Us’: An Oral History of Home Health Care in 2019

If a home health history textbook comes out, 2019 will be a chapter of change.

The Patient-Driven Groupings Model (PDGM) dominated most news cycles, but a series of similarly key regulatory initiatives also played out — and who knows what the rest of December has in store.

As the end of the year draws closer, Home Health Care News wanted to take a look back at the most thought-provoking, controversial and illuminating quotes that were featured in the past 11 months.


These quotes from CEOs, government officials, lawmakers and other experts serve as an oral history of 2019. They highlight some of the biggest industry trends and challenges that shaped the year.     

“If the withdrawal of therapy services triggers lower patient outcomes, they are going to be financial consequences that outweigh whatever benefits come in reducing visits.”William A. Dombi, president of the National Association for Home Care & Hospice (Jan. 24, 2019)

To say that PDGM dominated 2019 is not an understatement. When the Centers for Medicare & Medicaid Services (CMS) issued its proposal for the payment overhaul last year, the elimination of the therapy thresholds immediately stood out to providers. 


Over the years, therapy visits have helped boost reimbursement for home health providers. The upcoming payment overhaul, though, ties reimbursement to patient characteristics, a direction that will likely cause many providers to scale back on utilization in 2020. That move may seem like the best course of action from a bottom-line perspective, but as health care moves towards value-based payment arrangements, cutting therapy visits may cause bigger problems for providers down the road.

A similar payment overhaul has already triggered scores of therapy layoffs in the skilled nursing world.

“Assumptions put patients in the crosshairs as CMS waits to see if their assumptions are, indeed, accurate. Assumption-based payment models are bad policy and will likely mean arbitrary rate reductions that could result in patients not receiving care they need in the home.”LHC Group Inc. (Nasdaq: LHCG) Chairman and CEO Keith Myers (Feb. 19, 2019)

In the months leading up to PDGM, many leaders within the industry took CMS to task for the model’s assumption-based payment adjustments. The industry called for Medicare reimbursement rates to be based on observed evidence and data instead of assumed changes. Throughout the year, this became a major point of focus, with industry leaders voicing their support for legislation that they believed would refine this aspect of the payment overhaul.

Currently, PDGM’s assumption-based behavioral adjustment could pose a 4.36% cut in 2020.

One voice that stood out was that of LHC Group’s Keith Myers. At the beginning of the year, Myers penned a letter that warned of the impact this could have on patient care. Other executives and industry advocates were equally critical of CMS’s plans.

“My concern is that the federal government — CMS in [particular] — has proposed cutting the Medicare payment rates in 2020 by an amount that would equal over $1 billion in the first year alone. They’re developing a new payment model that I fear would be very unfair to many home health care agencies, particularly those in more rural areas where the home care providers may have to travel great distances to see their patients, meaning their volume isn’t going to be as high.”U.S. Senator Susan Collins (March 28, 2019)

Strong industry support from allies in Congress was a major theme throughout 2019. Those allies included Collins, a Republican from Maine, who HHCN interviewed in March. Other vocal home health supporters included Sens. Rand Paul (R-Ky.) and Debbie Stabenow (D-Mich.).

All the support shows how home health providers have carved out a powerful voice in Washington, D.C.

“I think the payment mechanisms we’re all going to have to live with are going to force disruption upon us. If you look at the industry as a whole, as we look at value-based payments in any part of the medical sector, there’s tremendous transformation happening.”Dr. Roy Beveridge, Humana Inc.’s (NYSE: HUM) former CMO (April 15, 2019)

Apart from PDGM specifically, broader health care payment reform remained a hot topic this year. Although the future of the Home Health Value-Based Purchasing Model (HHVBPM) is up in the air, health care payments continue to shift away from quantity and toward quality.

Along these lines, an increasing number of providers also announced new value agreements with health plan partners in 2019. Among them: Bayada Home Health Care, which secured a prominent value-based contact with AmeriHealth Caritas, the Moorestown, New Jersey-based provider’s largest yet.

“I think successful change management starts with a strong culture. If you create the kind of environment where people say, ‘You know what? We’re on the same team. I know my leadership cares about me. I believe in the mission we’re pursuing.’ That aligns any organization to be prepared to deal with big, transformative change in processes.” April Anthony, CEO of Encompass Health Corporation’s (NYSE: EHC) home health and hospice segment (May 13, 2019)

When PDGM takes effect, it will be the most significant change to the industry in 20 years. For providers, successful change management will be essential for survival.

That was the message from Encompass Health’s April Anthony, who spoke with HHCN as part of the podcast series Disrupt. Encompass Health has been consistently singled out as one of the best U.S. companies to work for due to its company culture. Anthony draws a connection between a healthy company culture and operating successfully under PDGM.

“I think in the next five to seven years, you’ll see that adult day services are an absolutely essential and integral part of the long-term care continuum — between the value-based design and the reimbursement models.”Centennial Adultcare Center CEO William Zagorski (June 24, 2019)

Part of the home health story in 2019 has to do with the rise of adjacent business models, including adult day health services. Although statistics vary, there are likely close to 10,000 adult day centers currently operating across the U.S., up almost 50% from just a few years ago.

Why should home health providers care? Well, for starters, adult day centers offer rich partnership opportunities, as many models seek to built “wrap around” services to better care for older adults. On the flip side, adult day centers could also become bigger and bigger home health competitors, especially as consumers seek more social settings.

“That will take these small agencies out. I thought the 30% [home health closures] number was going to happen at one point or another regardless. The RAP thing just takes previous estimates and lights them on fire.”McBee Associates Inc. President Mike Dordick (July 22, 2019)

As significant as it is, the home health industry knew PDGM was coming. A curveball, however, was CMS’s proposed — and later finalized — plan to eliminate Requests for Anticipated Payments (RAPs). Today, home health providers can receive up to 60% of the payment for an episode of care upfront. That amount will decrease next year — and go away completely by 2021.

The change will be monumental for the industry’s smaller, cash-strapped home health providers, especially when paired with PDGM. This quote from McBee’s Mike Dordick perfectly captures the possible impact of the RAP phaseout.

“I’d be curious to see if MA plans are able to contract with the top home health agencies. … I think the best home health agencies on the market are probably able to get all of the traditional Medicare patients they want, so it ends up that because you are paying less, because you are being so challenged from an administrative perspective, because you are managing the length of use, you are not able to work with the best providers in those markets — and you end up with maybe those lower-star agencies.”Harvard Medical School professor David Grabowski (Aug. 4, 2019)

This year, Medicare Advantage (MA) made headlines when CMS expanded its reach to include personal care. On the home health side, providers struggled with MA rates, which are often less desirable when compared to traditional fee for service.

As David Grabowski pointed out with skilled nursing facilities (SNFs), the quality of facilities that MA enrollees actually utilize relative to traditional Medicare tends to be lower in terms of outcomes and hospital readmission rates. This could be the case when it comes to home health providers as well.

In fact, people in traditional Medicare are more likely to enter a high-quality home health agency, according to studies.

“This really is the perfect storm. If [PDGM] goes through in full force, there’s going to be carnage in this industry. We can’t allow that to happen.”Amedisys President and CEO Paul Kusserow (Sept. 19, 2019)

PDGM plus the RAP phaseout will be challenging for home health providers in 2020. But there’s also the Review Choice Demonstration (RCD), decreasing rural add-on payments, tough oversight from federal watchdogs and more. Years from now, the industry will likely look back on 2019 and see it as the launch pad of a once-in-a-generation perfect storm.

As this quote from Amedisys CEO Paul Kusserow suggests, not every provider will be able to weather that storm.

“Program integrity must focus on paying the right amount, to legitimate providers, for covered, reasonable and necessary services provided. Our health care programs are quickly evolving; therefore, our program integrity strategy must keep pace to address emerging challenges.”CMS Administrator Seema Verma (Oct. 24, 2019)

An oral history of 2019 wouldn’t be complete without a few words from CMS’s leader, Seema Verma. Throughout the year, the CMS administrator reminded the post-acute care sector of the government’s commitment to curbing fraud, waste and abuse. That commitment the main reason CMS decided to eliminate RAPs.

“The person talking to the doctors has to have the answer … that’s what [home health] needs to do. The person taking the referral, give us the diagnosis, spoon-feed us what we need to do — because that’s what’s causing the world of stress for physicians,”Dr. William Rhoades, a geriatrician at Advocate Lutheran General Hospital (Nov. 14, 2019)

The changes in acceptable primary diagnosis codes have left some physicians wondering how they will ensure that their patients receive home health care under PDGM. The payment overhaul has roughly 40% fewer acceptable codes compared to the current Prospective Payment System (PPS).

Experts have urged providers to be diligent about educating coders and the physician community on PDGM’s changes. Some have asked providers to go even further.

Dr. Rhoades addressed the matter at the 2019 Private Duty Symposium in Illinois when he asked providers to tell physicians which diagnoses will allow their patients to receive care after a referral is rejected as a way to sidestep questionable encounters.

Additional reporting by Robert Holly

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