Home Health agencies prepare for new PDGM

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

The recently-introduced Patient-Driven Groupings Model (PDGM) will create new requirements for the Home Health industry.


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. 

Created as a result of the 2018 Bipartisan Budget Act, the new model relies more heavily on clinical characteristics and other patient information to determine payment categories. The Act also calls for the use of 30-day payment periods and the elimination of therapy visit thresholds as a basis for payment, among other changes. 

Agencies are encouraged to prepare well in advance of the January 1st, 2020 start date in order to maintain, or possibly improve, their reimbursement. MEDITECH will be updating this article in the coming weeks to give an overview of the major changes introduced by PDGM, and how agencies can alter their existing processes to prepare, beginning with LUPA and HHRG vs. HIPPS. 

Low Utilization Payment Adjustment (LUPA)

In the PDGM, the basis for payment will decrease from a 60-day period to a 30-day period. The LUPA threshold in the new model will range from two to six visits per 30-day period, decreasing from five visits in the former system. 

To be successful with the new LUPA requirements, agencies are advised to be mindful of the LUPA threshold for each 30-day period, and should pay close attention to visit distribution for each 30-day period. CMS expects agencies to avoid LUPAs, so it is important to have reliable strategies in place.

How is MEDITECH preparing?

MEDITECH customers can expect that as soon as the information required to generate a HIPPS code is captured, MEDITECH Home Care will display the LUPA Threshold for each 30-day pay period. The software will use various visual cues to inform the user that a pay period’s visit count has not reached the LUPA Threshold, and schedulers can move visits between the two pay periods to ensure a full payment for each 30-day period. 

Home Health Resource Group (HHRG) vs. Health Insurance Prospective Payment System (HIPPS)

In the new model, old HHRG codes (eg: C1F2S3) will no longer be used. The PDGM uses five new factors for determining payment: Admission Source, Timing, Clinical Grouping, Functional Impairment Level, and Comorbidity Adjustment. The new HHRG will be the combined values of all five new factors, and will be expressed as a HIPPS code. Similar to the old HHRG code, the new HIPPS code will have a five position structure, but will be constructed using a different formula. 

To prepare, agencies should familiarize themselves with the five factors for determining payment that make up the HIPPS and should attempt to maximize efficiency and workflows to improve outcomes related to each of these new factors. Agencies should also position themselves for success by learning the effects on payment value that each of the five factors can have, specifically which values contribute to higher or lower payments.

How is MEDITECH preparing?

In response to this change, MEDITECH is building the PDGM grouper into the Home Care software to appropriately calculate the HIPPS based on patient data. Users will be able to see how each pertinent piece of patient data contributes to the HIPPS code, as well as the expected reimbursement for the 30-day pay period. 

Stay tuned next month for an article detailing the Five Factors for Determining Payment. 

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