HCHB Chief Strategy Officer: Maintaining Home Health Status Quo Is a Huge Mistake Under PDGM

With the home health industry less than one month away from the Patient-Driven Groupings Model (PDGM), agencies large and small certainly have their work cut out for them.

Looking ahead, the only way to thrive in the midst of the upcoming payment overhaul will be to avoid maintaining the status quo. With a more complex coding landscape, new 30-day billing periods and other challenges, the old ways of running operations and billing departments simply won’t work.

That’s according to Scott Pattillo, chief strategy officer at Dallas-based Homecare Homebase (HCHB), a company that provides cloud-based software solutions for home health and hospice providers. HCHB’s clients visit 90 million patients annually.


Home Health Care News recently caught up with Pattillo to talk PDGM success and strategy. During the conversation, the HCHB executive also touched on what the elimination of Requests for Anticipated Payment (RAPs) will mean for providers in 2020 and beyond.

Highlights from HHCN’s discussion with Pattillo are below, edited for length and clarity.

HHCN: What’s the biggest piece of advice you could give to home health providers for maintaining success under PDGM?

Pattillo: The biggest implications of PDGM are the changes in assumptions around how agencies are going to behave — and just the overall reduction of reimbursement. When you combine that with the fact that getting paid a full amount for an episode is going to be more difficult — and that overall cash flow is going to be delayed — it becomes important to master a number of capabilities.


First and foremost, you need to be really precise about the scheduling of visits. With the 30-day payment period and now hundreds of different combinations leading to different LUPA thresholds, if you’re front-loading your care plans the way that you’ve always done, you’re going to throw the back half of an episode into a LUPA.

If you are moving a visit because the clinician calls in and says they need to move it, you may be throwing the first half of that episode into a LUPA, doing the same amount of work but getting a vastly different payment.

What’s the biggest PDGM mistake a provider could make, and how can that mistake be avoided?

I think the biggest mistake would be just maintaining the status quo and doing things as you’ve always done them. PDGM is pretty fundamental. It changes everything about the way you manage your back office, the way that you schedule, the way that you code. If you are not paying attention, you’re going to be part of the group of agencies that are either exiting the space or severely financially distressed.

The industry long-timers will tell you that the last time the Centers for Medicare & Medicaid Services (CMS) did something of this magnitude is when they changed from cost reimbursement to the current episodic-reimbursement model that has been in place for the last 20 years.

More than a quarter of the agencies ultimately didn’t make it. They closed their doors or were absorbed by agencies able to weather that storm. If mid-sized and smaller agencies — those that don’t have the resources of larger agencies — continue to approach everything as status quo, starting Jan. 1, they’re going to find themselves in a similar position.

Who’s getting it right? Is there a particular company with a strategy that you think will succeed under PDGM?

Our largest customers are the ones that are investing the most time in this, but it’s not just one thing. It’s because they are managing an entire transition program. They’re retraining their schedulers and their coders.

From a Homecare Homebase perspective, we’ve invested significantly in performance tools to help agencies offset the difficulties and address the new challenges, not just in a way that keeps them in compliance, but really helps them perform operationally.

These large agencies, as we talk with them, almost every one of them will say the same thing: They see [PDGM] as a huge opportunity.

They will suffer some of the same financial cuts as everyone else, but they will largely weather the storm. Their cuts will not be nearly as severe, their cash flow problems will not be nearly as pronounced because of the resources they have. They think there are going to be opportunities to massively grow, either by acquiring patients from the agencies that ultimately won’t make it or by acquiring agencies themselves.

At HHCN, we keep hearing smaller agencies will have the most difficult time navigating PDGM. Do you have any specific advice for small and mid-size agencies?

I think no matter what, PDGM is going to increase back-office costs, and it’s going to strain reimbursement. Those don’t have to be as pronounced as they will be if you do nothing.

One of the biggest things that I could advise is to really pay attention to your scheduling.

As a small agency, you may not have tools that will really help you understand the implications of every scheduling choice that you make. That said, you may have smaller operations where you can manually oversee that in a way that would not scale at a large organization. You can go really deep with a handful of schedulers and say, ‘Here are the things that you have to pay attention to.’ Talk to the coders about questionable encounters that are no longer going to be reimbursed. You really need to pay attention to the bottlenecks and the cash flow.

Speaking of cash flow, one of the main issues in addition to PDGM is the fact RAPs will eventually be eliminated. What are your thoughts on that?

There are a lot of opinions in the industry. I’ve certainly heard the suggestion that CMS is trying to drive industry consolidation, and, certainly, that would be an effective way to do so. I think the reduction in RAP payments is just one more way of pouring gasoline on the fire of PDGM’s impact on cash flow.

It really speaks to the importance of having a streamlined process, from the point of documentation of the visit, all the way to the point of the claim being billed. You’ve got to have a very tight operational process, and that’s really the only way to survive that.

Anything else we should know?

Speaking as a technology vendor, there is an assumption that there’s going to be this rush to implement technology ahead of PDGM. And we’ve seen that. We’ve had the best sales year ever. We’ve seen interest and rigor in all sorts of agencies trying to implement and be totally live on new technology to weather the storm of PDGM.

We always assumed that we’d start to see a slowdown in the market [closer to Jan. 1]. But what’s been interesting to us is that we’ve not seen that at all. It may be things like Cerner announcing their exit of the market. It may be some other dynamics in play, but we’re still seeing a ton of people even though we’re sitting here less than 30-days from PDGM. Agencies may not have enough time before the end of the year to be fully live on a new EMR, but even a late-game decision now to make a change will help them make a better transition after the new year for success under PDGM.

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