The Patient-Driven Groupings Model (PDGM) has some home health agencies running away from providing therapy. But in fact, the inclusion of therapy in an interdisciplinary care plan under PDGM represents one of the greatest opportunities to impact patient outcomes and patient satisfaction.
When PDGM takes effect Jan. 1, 2020, home health providers will begin navigating in earnest the vast changes the Centers for Medicare & Medicaid Services (CMS) is bringing to reimbursement. Among those changes are payment for therapy services. Under the current PPS reimbursement model, therapy utilization is a service add-on. Under PDGM, Medicare will no longer reimburse for therapy utilization alone as a payment rate determinant.
Instead, providers will receive a bundled payment for all services, which can then be allocated, as they see fit, based on patient needs. The new model takes an interdisciplinary, patient-need driven payment approach to the home health benefit.
The initial reaction from home health providers was to consider drastically scaling back therapy utilization. In a June 2019 survey by the National Association for Home Care & Hospice (NAHC), 685 home health providers responded and largely indicated wide-ranging industry concerns.
When asked, “How do you anticipate PDGM will impact therapy utilization in your agency?” 48% of respondents anticipated a decrease in therapy utilization; only 2% planned an increase. The reason most commonly cited was a fear that therapy would be more expensive than the reimbursement would support.
It’s a fear that Derek Michael, Regional Vice President of HealthPRO® Heritage, one of the largest independently owned diversified therapy management companies in the country, sees as unfounded.
“Therapy will remain critical in providing care that optimizes outcomes and delivers patient satisfaction,” Michael says. “In addition, therapy offers agencies the opportunity to expand their service lines and specialties to serve the majority of clinical groupings identified in PDGM.”
This is what Michael and other industry leaders mean when they say that therapy is now fully ingrained in the payment model. And it’s why agencies that turn away from therapy will actually hurt their patients — and the industry at large.
“The methodology CMS used to formulate the PDGM payment model will be used going forward to recalculate an agency’s reimbursement annually,” Michael says. “As therapy utilization has been accounted for in the reimbursement, a reduction in therapy utilization will actually result in a reduction in the agency’s reimbursement. In this manner, CMS has essentially taken a ‘use-it-or-lose-it’ approach to resource deployment under PDGM.”
Rather than fearing the impact of PDGM on therapy reimbursement, agencies can actually embrace it.
“We believe this is one of the most fundamentally sound decisions CMS has implemented,” Michael says. “It does a fantastic job of eliminating the incentive to deliver excessive services for payment. Instead, PDGM allows providers to operate more collaboratively using an interdisciplinary approach patient care.”
Under PDGM, CMS has identified 432 different clinical groupings to categorize patients for reimbursement.
“What home health agencies need is a framework that reverse engineers these groupings by providing an analytical approach to care delivery that meets the patient’s needs,” Michael says.
HealthPRO® Heritage has created such a framework. Its Care Pathways to Success is a proprietary calculator and clinical best practice tool for determining therapy utilization.
Care Pathways to Success creates a triple-win:
- Patient receives appropriate care
- Home health provider achieves positive outcomes
- Health system at large benefits from utilization that is in line with patient needs
In addition, Michael notes that gross margins under Care Pathways to Success have been in line with best-in-class industry benchmarks. Those are significant margins: A study this October by BKD and SHP presented at the NAHC annual conference showed that gross margins for the best 25% of home health providers was 54%.
“It’s easy to say, ‘We’re going to give our patients everything they need’ — the tricky part is doing it in a thoughtful and cost-effective manner,” Michael says. “Care Pathways to Success is a care planning solution that delivers on both care and cost management.”
To learn more about the HealthPRO® Heritage’s Care Pathways to Success, visit its PDGM resource page.