Congressman Vern Buchanan Urges CMS to Scrap PDGM’s 4.36% Behavioral Adjustment

In August, the Partnership for Quality Home Healthcare (PQHH) unveiled a first-of-its kind, comprehensive analysis of the Patient-Driven Groupings Model (PDGM).

Among its findings, the analysis — conducted by health economics and policy consulting firm Dobson DaVanzo & Associates — highlighted how government spending on home health care is 21.6% lower than what the U.S. Centers for Medicare & Medicaid Services (CMS) projected going into 2020. The cause of that discrepancy: PDGM’s behavioral adjustment, which the home health industry has largely opposed since early drafts of the payment overhaul. 

It appears the analysis has done its job in attracting attention to PDGM’s potential flaws.

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U.S. Representative Vern Buchanan, a Republican from Florida, has sent a letter to CMS Administrator Seema Verma voicing his concerns about PDGM. Buchanan had previously co-sponsored legislation that, if passed, would have restricted CMS from making assumption-based rate reductions rooted in what it believes providers may or may not do.

The Dobson DaVanzo & Associates analysis showing a drop in home health spending was based on Medicare claims data from the first four months of PDGM. In his letter, Buchanan notes that many of the factors contributing to the spending decrease have continued since.

The Bipartisan Budget Act of 2018 requires PDGM to be budget neutral.

“With these current trends continuing, Medicare home health spending will be well short of the required budget-neutral level, as outlined by Congress,” Buchanan stated.

Specifically, home health spending is down because at least two of the three PDGM assumptions made by CMS have not played out.

According to the Dobson DaVanzo & Associates analysis, home health agencies aren’t “upcoding” by choosing the primary-diagnosis code tied to the most reimbursement dollars. 

Additionally, agencies have been hit with far more Low Utilization Payment Adjustments (LUPAs) than CMS projected.

In the first four months of the year when home health agencies were adjusting to PDGM, the national LUPA rate was 24.4% — with an all-time high of 28.7% in March.

Citing the uncertainty of the COVID-19 pandemic, CMS released its 2021 proposed home health payment rule in June with basically no changes to PDGM’s framework. The agency normally releases its final payment rule for the upcoming year at the end of October.

“I urge CMS to carefully consider the data submitted by commenters and to re-evaluate the assumptions used as the basis of the 4.36% rate reduction made in last year’s rule and proposed again for 2021,” Rep. Buchanan added. “CMS should take a data-based approach to its 2021 rulemaking responsibilities and move away from earlier theoretical assumptions and projections in favor of relying on actual provider experience.”

Senators Susan Collins (R-Maine) and Debbie Stabenow (D-Mich.) have also previously taken aim at PDGM’s built-in behavioral adjustment. Rep. Terri Sewell (D-Ala.) has joined Buchanan on the House side.

A Washington, D.C.-based home health advocacy organization, PQHH was quick to praise Buchanan for his continued support of the industry.

“The Partnership thanks Congressman Buchanan for his leadership on this issue and continued support of issues impacting the delivery of Medicare home health to American seniors,” Joanne Cunningham, the organization’s executive director, said in a statement. “Congressman Buchanan is a long-standing supporter of the home health community, and we echo his request that CMS discard any previous theoretical assumptions and projections of providers’ behavioral response to PDGM, and remove the -4.36% behavioral adjustment for CY 2021.”

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