Home Health agencies prepare for new PDGM

Home Health Agencies Prepare for New Patient-Driven Groupings Model (Part Three)

Home Health agencies across the United States are preparing for the Patient-Driven Groupings Model (PDGM).


Home Health agencies across the United States are preparing for the Patient-Driven Groupings Model (PDGM) that will create new requirements for the Home Health industry. 

Last month, we discussed the five factors for determining payment in the new model. In today’s article, we’ll delve into Behavioral Assumptions, or the ways that CMS must now assume agencies will behave in order to maximize their episode payments. CMS will adjust the base episode payment rate in order to compensate for these assumed behaviors. 

The three assumed behaviors are:

1. Clinical Group Upcoding

CMS assumes agencies will change documentation and coding practices to use the highest-paying codes. 

2. LUPA Avoidance 

For cases that are 1-2 visits away from the LUPA (low-utilization payment adjustment) threshold, it’s assumed that agencies provide 1-2 extra visits to avoid letting the episode qualify as a LUPA. 

3. Comorbidity Adjustment 

Agencies will list maximum number of additional diagnoses on claims in order to maximize Comorbidity Adjustment payment.

It is expected that CMS will initially decrease the base episode payment rate by 8.01 percent due to these assumptions. However, this adjustment could change in coming years as CMS analyzes agency data and performance in the PDGM system.

How can agencies prepare? 

​It’s important for agencies to maximize diagnosis coding practices and to include all pertinent diagnoses​ on home health claims​. Ensuring an accurate primary diagnosis is vital to reimbursement as the PDGM clinical group influences the functional level as well. Including all additional and appropriate diagnoses increases the likelihood for qualifying for a low or a high comorbidity adjustment.

Agencies should also be aware of the LUPA threshold and familiarize themselves with the new functionality that will help manage the LUPA process. There is a different threshold per patient per 30-day billing period. It is important to review visit utilization over both 30-day periods. Postponing a visit to later in the week or the following week could prevent a LUPA in the second 30-day billing period.

Discussing patients during case conferences prior to the second 30-day period is important to identifying significant change​s​ in condition. Was there a change in primary diagnosis? Were there additional comorbidities identified? Changes in diagnosis coding are allowable and can impact the second 30-day billing period without the need for another OASIS assessment. Did the patient's functional impairment level decline? Documenting an OASIS timepoint prior to the 2nd 30-day billing period can impact your reimbursement for that billing period prior to recertification or discharge. 

How is MEDITECH preparing? 

The Diagnoses page within MEDITECH Home Care now displays the clinical group for the primary diagnosis, and shows a strong warning if the patient’s primary diagnosis does not group correctly. Additionally, more comorbidities are visible on the screen, as well as the comorbidity adjustment level. Warnings for a non-grouping primary diagnosis occur along the way, and at a certain point, Home Care will not allow you to proceed, as doing so will result in a reimbursement denial for this patient’s care. 

MEDITECH Home Care is programmed to recognize when a pay period is a LUPA. Users are presented with a message alerting them to the LUPA, and told the amount of visits needed to reach the threshold. While some LUPA situations are unavoidable, a missed visit could cost an agency hundreds of dollars. In Scheduling, the 30-day pay period divider is clearly shown to assist the user in rescheduling the missed visit to meet the LUPA threshold, and to receive reimbursement for the full 30-day amount. 

This concludes our series on the new Patient-Driven Groupings Model. To stay updated on the PDGM and other home health regulatory changes, visit MEDITECH’s Home Care regulatory website.

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