Early Errors and Therapy Turmoil: Home Health Insiders Weigh In on PDGM’s Arrival

The long-awaited Patient-Driven Groupings Model (PDGM) is finally here, marking the biggest home health reimbursement overhaul in two decades.

PDGM officially launched on Jan. 1 after originally being proposed by the Centers for Medicare & Medicaid Services (CMS) in July 2018. With changes to billing periods, therapy reimbursement and LUPAs, it’s the most significant shift since the Prospective Payment System (PPS) was implemented on Oct. 1, 2000.

PDGM — part of the overarching shift away from volume-based payment toward value-based care and patient characteristics — will undoubtedly create major challenges for many in the industry. But there are also plenty of home health industry representatives who are either bullish on PDGM as a whole or are confident in their companies’ ability to deal with its sweeping changes.


Either way, both concerned and optimistic players have geared up in anticipation of the new payment model.

Well, the waiting game is over. It’s too early to glean any new concrete PDGM insights, but there are still many lessons to learn for January, industry insiders told Home Health Care News.

To take a pulse on the home health industry following PDGM’s implementation, HHCN asked several stakeholders about surfacing issues or challenges, keys to success in the first month and general buzz. Responses were edited for length and clarity.


Bill Dombi — President of the National Association for Home Care & Hospice (NAHC)

Home health agencies have committed much to early preparation for PDGM. The greatest concern of the moment is whether CMS and its contractors are equally prepared. The skilled nursing facilities’ experience in October with the Patient-Driven Payment Model (PDPM) is instructive, as there were a number of operational problems.

Secondarily, we remain concerned that the phaseout of the RAPs will create some cash flow difficulties for some home health agencies (HHAs).

Finally, we expect significant confusion around the PDGM policy that will trigger claim rejections in the form of “Return to Provider” when the claim does not have an acceptable diagnosis code. There are a number of codes that had been routinely used for many years that are now no longer acceptable under PDGM. We hope that CMS is willing to quickly revisit its position on the so-called “Questionable Encounters.”

It is not easy to boil it down to a handful of actions to achieve success. Still, there are some core elements in the transformation to PDGM that are needed to optimize for chances of success:

  • 1. Gain control of revenue cycle management. This means taking all necessary steps to speed up securing acceptable physician documentation, including the plan of care, primary diagnosis coding and comorbidities support, along with the HHAs timely completion of OASIS. The sooner RAPs and final claims can be submitted, the more stable the HHA will be.
  • 2. Engage in comprehensive, interdisciplinary clinical management. This will ensure that the proper level of care is provided that fits the individual patient. It is the best way to control LUPAs, outliers and efficient overall visit utilization.
  • 3. Referral management. Internally, the HHA referral team needs to understand and appreciate the changes brought on by PDGM. Externally, referral sources need to understand the impact of PDGM on them, for example, with documentation challenges.
  • 4. Securing PDGM related benchmarking data on a near real-time basis, including both financial and clinical data that explain what the changes are that are ongoing within an HHA.

With the success of advocacy around the PDGM base payment rate –namely, the significant reduction in the behavioral adjustment and the elimination of the HHGM’s 4.3% rate cut — the anxiety levels in transitioning to PDGM have been notably reduced in HHAs across the country.

Those HHAs that prepared are ready to go with no sense of panic and a high level of confidence.

Nick Seabrook — Managing Principal and Founder of BlackTree Healthcare Consulting

The biggest buzz we’re hearing early is errors with OASIS submissions to the iQIES system related to missing MBI numbers for Medicare Advantage (MA) patients, even for MA payers that have their own policy ID systems and don’t require MBI.

I did just see [a quarterly release temporary hold notification] on Palmetto’s website. The scary part about that notification is it indicates claims submitted with dates of services of Jan. 1, 2020, or later will potentially be held until Jan. 18, 2020, which would create serious cash flow issues.

To me, the biggest keys to the first month were what agencies did in the months leading up for preparation. In my opinion, the two biggest keys in Month 1 of operations are managing cash flow and case conferencing. Timeliness and accuracy are crucial for both.

For cash flow to be properly managed, agencies should be managing their unbilled claims to keep that list as small as possible. It is inevitable that Medicare cash flow is going to take a dip early in 2020; agencies should remember to focus billing and collections efforts on non-Medicare payers to maximize cash flow coming in.

Further, for MA payers we are still hearing questions on how they will be handling billing under PDGM, so agencies should be getting clarification from their various MA payers on any updated billing and reimbursement rules.

Agencies should be closely monitoring MA claims early under PDGM to ensure they are processing and paying properly.

Case conferencing under PDGM includes LUPA management and monitoring the new LUPA thresholds. It also includes evaluating patients coming up on the end of their 30-day payment period to determine if they will be continuing care into a subsequent period. It’s also important to have proper communication channels in place in instances where a patient’s primary diagnosis code changes mid-period.

Communication and collaboration become paramount for patient care management under PDGM and case conferencing plays a huge role in that.

David Hoover — Vice President of Revenue Cycle Management at Axxess

We’ve had PDGM-specific features in our software since May of 2019 and provided extensive training to our clients about these features and the overall impact of PDGM. We set up a rapid response team that is dealing with any issues that may come up. The issues we’ve had so far are very minor and have been quickly addressed.

The first month is all about getting your clinical and operational processes where they need to be quickly. Make sure you’re continuing to communicate to your clinicians, referral sources and the physicians signing orders. Your intake staff needs to be collecting a billable primary diagnosis. Clinicians need to be completing thorough and accurate OASIS assessments quickly. Quality assurance reviews should be performed quickly to ensure accurate information is included in all documentation and any process breakdowns are identified. Be sure to communicate with physicians to ensure orders are signed timely.

You need all these things in place now so that you can bill the final claim at the end of the month.

It’s okay to ask for help. Don’t be afraid to outsource or rely on partners during the transition. There are experts who can help you shore upcoding, billing and operational processes.

It’s still very early in the implementation, and we are waiting to see exactly how CMS will handle this transition and whether their systems will work properly to process OASIS data, RAPs and claims. You should check daily for updates from CMS, especially during the first 90 days.

Shelley Ackerman — Chief Operating Officer at CareStitch

I’ve been a practicing home health [physical therapist] for over five years. I’m involved on several home health Facebook groups, which is where I stay in the loop with my colleagues. I have already begun to witness the turmoil caused by PDGM on social media — not personally, yet — and morale is being affected. It is a scary time for us mobile clinicians!

I founded a health tech platform for home health agencies, which we’re launching this spring in time to help home health agencies and home health clinicians survive these seismic shifts caused by PDGM. I truly feel that we’re living in a tech-driven world and if home health agencies don’t adapt to help their operational inefficiencies, they won’t survive.

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