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Nancy Joyce, RN, BSN, HCS-D, HCS-O
As you have probably heard by now from your agency, CMS recently approved the final rule that will impact home health care in a way not seen since the introduction of the HHRG-Home Health Resource Group-many years ago.
This change is PDGM, or Patient Driven Groupings Model, and it will become effective on January 1, 2020. This will allow agencies a year to prepare for its implementation, and many agencies are already putting into practice some of the items necessary to be successful.
In a nutshell, PDGM is a new way to pay home health agencies caring for Medicare patients. It does not affect any other payor sources, such as private insurance.
Instead of paying a 60-day episode as has been done for years, the payment episode will now drop to 30 days. To make it even more confusing, the 60-day episode for the plan of care and OASIS will remain the same, so instead of billing once for 60 days, agencies will now have to bill every 30 days.
The reasoning behind this change is that statistically, CMS found that a large percentage of Medicare patients were being discharged before the 30-day mark during their certification period, so CMS felt that payment was double what it should have been. What they failed to understand, however, is that the payment was not for the length of time a patient was on service, but was to cover the resources needed to care for the patient safely in their home during that time period. This also failed to take into account front-loading patient visits to prevent acute care hospitalizations. In many cases, the number of visits did not change, only the timing of the visits.
So how does this affect care planning? It really doesn’t, as there will still be a 60-day care episode, and all OASIS and recertification rules still apply. But, under PDGM, payment will be cut almost in half as the billing increment will now be for 30 days. There will be a tremendous impact on RAP billing and the amount of funding available to cover costs prior to the final billing, which as stated earlier, will now be every 30 days.
There is a positive to this however. Currently, the HHRG system has 153 groupings, utilizing the Clinical, Functional, and Service domains to calculate payment, with an emphasis on the number of therapy visits ordered/performed during a care episode (60-day certification period). As we all know, the Clinical domain is made up of the diagnoses, and the physical assessment of the patient, taking into account items such as pain, shortness of breath, and wounds. The functional domain is based on the patient’s ability to perform ADL’s safely. The service domain is made up of the episode timing, and whether or not the patient was in a hospital or other inpatient facility or was referred from the community. There were payment tiers for the number of therapy visits, in each category of early/late episodes. Under PDGM, the number of groupings will expand to 432, the reasons for which will be outlined shortly.
Moving forward, under PDGM, the number of therapy visits will no longer impact payment. Instead, the clinical scoring will take precedence. Items such as the selection of the primary diagnosis will become critical, as well as the selection of the secondary diagnoses.
Under the current payment system, Medicare allows up to 6 diagnoses, the ones on the OASIS, to help determine the clinical scoring. In PDGM, agencies will be able to include more diagnoses.
There will now be 6 clinical groups into which your patient may fall, depending on the coding and clinical scoring, the functional level, and the co-morbidity adjustment. This leads to a total of 216 payment groups when it takes effect.
So here is a simple breakdown of the changes:
Clinical Groups-as mentioned above, there will be 6 clinical groups.
The clinical group designation will be based on the principal, or first listed diagnosis. There will also be 11 possible diagnosis groups for the co-morbidity diagnoses. If there are no diagnoses listed that fall into any of those groups, then no payment adjustment will be made. If only 1 diagnosis falls into those groups, then a low payment adjustment will be made. If 2 more are applicable, the this would denote a high adjustment.
Also, CMS has “tightened up” in terms of diagnoses that will be acceptable on billing. Vague and unspecified codes will be scrutinized, returned for clarification as a QE or Questionable Encounter, or rejected for payment entirely. Z-code use, symptom code use and codes for which further information and clarity exist will seldom be used. Instead, clinicians and coders will need to become more comfortable with getting more information from the physicians. This will be difficult in many instances. There are already problems just getting the information we get now, imagine what it will be in the future. But, there will be no choice, the codes used will have to be as specific as possible. You can probably expect to start getting inquiries from coders in the very near future to get more specific diagnoses from the physicians. Hopefully, through education and preparation, they will start to include more information up front to minimize the number of queries received.
Clinical documentation is already extremely important, but will become even more so under PDGM. Some industry leaders have already suggested that there may need to be admission specialists, or that agencies may have to allow more time/resources to the admission process in order to ensure that all information is obtained and documented accurately. Not yet stated in all of this is the fact that moving to PDGM is also a movement toward more of a value-based payment and care model, where outcomes and clinical care take on increasing importance in the future.
There will now be 4 episode timing groups based on whether the episode is early or late, and the referral source. These are Institutional Early, Instititutional Late, Community Early, and Community Late.
The definition of early/late episodes will change somewhat. Only the first 30-day episode will be considered early, all subsequent episode will be later episodes. This will be much simpler and easier to determine. The only time this will be reset is if there has been a gap of greater than 60 days between episodes.
Episode timing is also important depending on the referral source. In the new payment system, the source of the referral will definitely make a difference, with CMS giving higher payment (significantly) to patients discharged from inpatient settings instead of those coming from the community.
Again, this is a little confusing to those in the industry. CMS has made the assumption that patients who are discharged from a facility are sicker in general than those referred from physician offices, clinics or other outpatient settings. In reality, this is not necessarily true. With the emphasis on keeping patients out of acute care settings, many of the patients that are admitted from physician offices are extremely ill, with complex medical problems requiring a high level of care, while many time patients from inpatient facilities are doing well, having recovered in large part in the facility. Those agencies who have the larger percentage of patients from the community may see a profound financial impact, and may need to work on developing more relationships with discharging facilities to capture a higher share of that business.
On January 1, 2019, OASIS D will be implemented. It is vital that every clinician who completes OASIS has a thorough understanding of the new OASIS form, and becomes expert at its completion, as this will directly affect the functional level scoring under PDGM.
As stated earlier, there will be 3 levels of functional impairment; low, medium, and high. Again, CMS has developed a formula for determining the level of impairment. Since the number of therapy visits will no longer directly impact payment, it is important to understand that documentation in the clinical record is of utmost importance. Patients will still need to get the care they need as determined by our assessments, the total number of visits just will not factor into payment as has been done previously. It is expected that the number of therapy visits will be determined in large part by the level of impairment of the patient. Nurses, who do most Start of Care Assessments, must become experts in determining the functional level of their clients.
LUPA’s, PEP’s, and OUTLIERS
You may be wondering now about LUPA’s, PEP’s, and Outliers, and what will happen to them under PDGM. The answer is…they are not going away.
PEP’s will not change much. There will still be partial payment and payment adjustments for patient’s who change agencies within an episode.
Outliers will also still exist, and will apply to those patients who need extraordinarily high amounts of care as they do now.
LUPA’s will change quite a bit. CMS has developed a new system for LUPA determination. It is complicated, but here is a simple (hopefully) breakdown:
There is no more 5 visit rule meaning that unless 5 skilled visits are performed, the episode is billed as a LUPA (Low Utilization Payment Adjustment). The number of visits used to determine a LUPA under PDGM will vary from 2-6 visits in each 30-day episode. The determination of the number of visits needed is again based on the timing of the episode, the clinical group, the functional level and the co-morbidities. CMS has come up with 216 different variables, and they have anticipated that, once agencies become familiar with the new system, the actual LUPA rate should drop.
CMS has made sweeping changes to the payment model in the past, first moving from a fee-for-service model, where each visit was billed and paid for by Medicare, to the current HHRG system, where payment is made by episode, and it is up to the agency to manage the patient and reimbursement in a manner that meets the patient’s needs in a fiscally responsible manner.
Agencies who implement strategies now to prepare for PDGM will be equally successful with this change, and will be able to continue to provide patient directed care in a fiscally responsible manner.