To comply with requirements outlined in the Bipartisan Budget Act of 2018, the Centers for Medicare and Medicaid (CMS)has proposed a new payment model for Home Health services that would be implemented on January 1, 2020. This new model is called the Patient-Driven Groupings Model, or PDGM, and is designed to address 2 main items:
- 1) To ensure access to care for vulnerable patients, and
- 2) To eliminate therapy volume (that is, the number of therapy visits) as a payment factor, a long-standing concern of CMS, MedPAC, Congress, and the industry.
PDGM is essentially a revision of the Home Health Groupings Model, or HHGM, proposed by CMS last year. The biggest difference between HHGM and PDGM is that PDGM is designed to be implemented in a budget-neutral manner, whereas HHGM included $950 million in cuts to the home health industry.
Key components of PDGM include:
- Changing to a 30-day unit of payment from the current 60-day payment episode
- Payment based on patient characteristics
- The elimination of the therapy thresholds as a component of payment
- 216 possible case mix groups (CMGs), a change from the 153 available in the current payment model
There are 5 separate categories affecting payment under PDGM:
- 1. Admission source – Institutional vs. Community
- 2. Timing of the 30-day period – Early vs. Late
- 3. Clinical Grouping – 6 Clinical Categories
- 4. Functional Level – Low / Medium / High
- 5. Comorbidity Adjustment – None / Low / High
Each of these 5 categories is determined individually and then combined to form the final Case Mix Group, which sets payment for the applicable 30-day period. Payment could be further adjusted (decreased) if less than 2-6 visits (i.e., the LUPA, or Low Utilization Payment Adjustment, threshold) are furnished during the 30-day period, depending on the specific PDGM group.
Each 30-day period will be classified as Institutional or Community, depending whether or not the individual received acute or post-acute (skilled nursing, inpatient rehab, long-term care hospital) services within 14 days of beginning care under home health. Thirty-day periods classified as Institutional are paid at a higher rate than those classified as Community.
Timing of the 30-day Period:
The first 30-day period of any patient’s home health stay is considered Early; all other 30-day periods are considered Late. The Early period is paid at a higher rate than Late periods.
The patient’s diagnosis (ICD-10-CM code) that describes the primary reason the person requires home health services will be used to classify the patient into one of 6 clinical categories or groups. The 6 Clinical Groups described by CMS in PDGM are:
- Musculoskeletal Rehabilitation
- Neuro/Stroke Rehabilitation
- Wounds (both surgical and non-surgical)
- Behavioral Health (including substance use disorder)
- Complex Nursing Interventions
- Medication Management, Teaching, and Assessment
In PDGM, Functional Level score is determined from 8 items in section M of the OASIS. There are 3 functional levels per clinical group – low, medium, and high impairment.