Home Health Therapy Utilization Increased Under PDGM, New Data Suggests

The Patient-Driven Groupings Model (PDGM) has finally been around long enough for there to be some legitimate and meaningful data.

The COVID-19 crisis has obscured some of the numbers, but the home health world is finally gaining a clearer picture on what kind of impact the new payment model has had since its Jan. 1, 2020, implementation.

One of the major revelations, industry insiders noted during a Tuesday webinar hosted by BlackTree Healthcare Consulting, is that therapy utilization has not suffered nearly as much as originally anticipated.


“I think one of the myths as we headed into PDGM was that therapy utilization was dead,” BlackTree Managing Director Nick Seabrook said. “And that is clearly not the case. We’re still providing therapy at a high amount — almost half the visits under PDGM are still therapy visits.”

King of Prussia, Pennsylvania-based BlackTree Healthcare Consulting provides billing, OASIS and other support services to home health and hospice agencies, as well as skilled nursing facilities (SNFs). 

The data that the consulting firm dove into during its Tuesday webinar came from January 2020 through October 2020.


Overall, therapy visits actually increased slightly on 30-day claims billed during that span, jumping from 3.39 therapy visits per episode in 2018 to 3.56 therapy visits per episode in 2020.

PDGM wasn’t the only factor expected to drive therapy utilization down in 2020. Some experts believed the COVID-19 pandemic and restrictions around “non-essential services” would similarly lead to therapy cuts, especially for home health patients residing in assisted living communities and other long-term care facilities.

Encompass Health Corp. (NYSE: EHC) even opted to restructure its therapy workforce’s compensation in Q2 2020 due to COVID-19 disruption.

But based on the data available right now, utilization decreases did not happen on an industry-wide scale. In fact, there was a bigger decrease in non-therapy utilization than there was in therapy utilization. 

“The percentage of therapy visits compared to the overall visits actually went up in Year 1,” Seabrook said. “[Exactly] 45.9% of visits under [the prospective payment system] were therapy. Under Year 1, that was 46.8% of visits.” 

“That was one of the more shocking stats that we uncovered from the data analysis,” he added.

At the beginning of the public health emergency, this outcome looked highly unlikely. As agencies were adjusting to PDGM amid the COVID-19 crisis, it looked like there could be dire consequences.

“We probably saw a lot more effects of … the COVID crisis than we did with the inception of PDGM,” Diana Kornetti, president of the American Physical Therapy Association’s (APTA) home health section, told Home Health Care News in July. “That was like the double whammy, like the other shoe landing.”

Yet later on, there were anecdotal reports from therapists that suggested things may not be as bleak as they were presented earlier in the year.

For instance, many therapists gained power back in some areas to set visits strictly based on how the patient presented themselves in person, Dr. Monique Caruth, the CEO of Fyzio4u Rehab Staffing Group, said on a recent webinar hosted by HHCN.

“At the beginning of the year with PDGM, we were being questioned when we put visits at twice per week for four weeks, for instance, or three times per week for four weeks,” said Caruth, who is a therapist herself. “We had clinical managers sending back messages saying, ‘We have to be careful because of PDGM.’ And then COVID hit. Then it went back to giving the therapist control of determining frequency.”

COVID-19’s effect on home health made it hard to distinguish what PDGM did to therapy utilization overall. Even with more data to consider, it’s still tough to tell what the effects of either were on utilization.

But the data presented during the BlackTree webinar did seem to paint a much brighter picture than expected. And it’s possible that the public health emergency threw a wrench in the plans of agencies that had planned to reduce utilization across the board in 2020.

“I think it becomes a crisis mode [reaction], and then a standard is set that we’re going to do one visit in person and then one telehealth visit during COVID, for instance,” Cindy Krafft, the owner and founder of Kornetti & Krafft Health Care Solutions, said on the HHCN webinar. “And we know that patient care does not work well as a one-size-fits-all. I think, sometimes as therapists, we dig in our heels about what we think our frequency should be, just because it’s what we’ve always done, too.”

LUPA struggles

Low-Utilization Payment Adjustments (LUPAs) were a major pain point for providers early in 2020, and the data presented by BlackTree showed that it continued to be a struggle.

“I think one of the immediate impacts that COVID had was a huge spike — depending on region — in those LUPA numbers,” Seabrook said. “And one of the questions that we had was if we were going to start to see this number normalize and see a big trend going downwards.”

The overall number for LUPAs through October was at 8.9%. CMS was expecting a LUPA rate at around 7% in 2020, internally believing home health providers would find ways to briing that number even lower.

“Well, the opposite happened,” Seabrook said. “Now again, some of that impact is going to be due to COVID.”

LUPA numbers varied based on a lot of different factors — region, types of patient and periods, among others. But broadly speaking, LUPAs are still something providers were having a tough time managing through October.

“I think one of the main takeaways is that … this is probably an area that we’re still trying to wrap our arms around as an industry, in terms of how we can best manage these patients and best manage these LUPA thresholds,” Seabrook said.

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