14 Action Items to Successfully Meet Sweeping, High-Stakes PDGM Changes

Posted on 11 Jun, 2019 |comments_icon 0|By Rebecca L. Johnson

PDGM changes could sink your home health agency if you delay taking informed action.

If you think you have a few months to start your HHA’s Patient-Driven Groupings Model (PDGM) prep and training, think again.

There is no time to delay — not if your home health agency hopes to survive the high-stakes transition. That’s why we lay out the what, why, and how of 14 vital tasks you should undertake as soon as possible to ensure your ramp-up stays on target for PDGM implementation on Jan. 1.

Nearly every element of the prospective payment system will undergo change in the new payment model — including pay based on episode timing, referral source, diagnoses’ relationship to reimbursement, and functional assessment.

There are “always those providers who stick their heads in the sand and avoid facing change,” says consultant Pam Warmack with Clinic Connections in Ruston, Louisiana. “They better not do so this time.”

Prepare now for the new payment model — and make sure you swim instead of sink under PDGM — by following through on these 14 action items recommended by industry leaders.

Action Item 1: Shore Up Your PDGM Knowledge

At this stage, you should be familiar with all of the changes PDGM is bringing to home health payment. But if you need to catch up, or just refresh your memory, review the 2019 PPS final rule and the Centers for Medicare & Medicaid Services’ Feb. 12 call on the model.

Action Item 2: Assess PDGM’s Impact on Your Agency

The new payment model brings many generalizations — high-therapy patients will lose payment, complex nursing patients will pay more, etc. But you won’t know how PDGM will affect you until you actually run your specific numbers.

With less than eight months to go, HHAs “should be in the process of identifying the overall impact of the PDGM system,” advises Rick Ingber with VantaHealth Consulting. And they must also be “drilling down on what specific issues are causing decreases and increases in reimbursement,” Ingber urges.

Specifically: You should analyze your current patient population for Low Utilization Payment Adjustment (LUPA) rate, utilization, therapy usage, primary diagnoses, episode timing, referral sources, and OASIS scoring in the functional area, recommends Joe Osentoski, reimbursement recovery & appeals director with Quality in Real Time. “These will provide, with analysis, context to which agency processes need to receive more attention to prepare for PDGM,” Osentoski explains.

You can analyze impact on a case-by-case basis too, Warmack offers. “I have advised my clients to begin using the PDGM grouper with each SOC and recert to get a feel for how the new score would affect their decisions in utilization,” she says. “They should begin to learn which diagnoses are not capturing case weight points.”

Pay attention to referral source and patient demographics especially when performing a gap analysis, advises consultant J’non Griffin, owner of Home Health Solutions.

Action Item 3: Organize Your Changes

Your specific analysis of how your agency will fare under PDGM will inform your preparation plan. And that process shouldn’t be haphazard. “It would be a good idea to have a small committee to coordinate analysis and policy updates as necessary,” says Diane Magrady, compliance lead with Morton Grove, creator of the therapyBOSS therapy documentation software solution. “This committee should include a clinical manager, QA clinician, a finance and a billing representative at a minimum, and they should be communicating with the governing body to ensure a smooth transition,” she recommends.

Action Item 4: Consider Big Case Management Changes

Under PDGM, “agencies need to learn to actually ‘manage’ patient care in real time for each week on service,” Warmack stresses. “Monitor for missed visits, PRN visits, changes in supply needs, etc.”

Finance expert Pat Laff with Laff Associates, recommends a case management model that puts one “primary clinician” in charge of the patient and responsible for managing her care. That patient gets “case conferenced” with a supervisor at least every 14 days.

What makes that system doable is that the primary clinician communicates with other members of the interdisciplinary team, then relays that info to the supervisor in a one-on-one conference via phone, Laff says. That eliminates time- and resource-wasting in-person meetings of entire IDT teams, where patient discussions are rushed or even skipped altogether, he maintains.

Bottom line: Under PDGM, “we can’t give field staff autonomy to provide patient care as they see fit and not analyze the care until the end of the episode,” Warmack contends.
An added benefit of this case management model will be increased quality scores, Laff says.

A supervisor should be “monitoring patient-specific utilization with meaningful goals and outcomes,” Griffin exhorts.

Action Item 5: Address Billing Changes

Billing will change significantly under PDGM, thanks to the new 30-day episode. “Agencies that do not have a good control over their current billing practices will find themselves getting bogged down, since they will now have two RAPs and two claims for every 60-day episode,” Magrady notes. “This could significantly affect cash flow, which may also be impacted by the shift in payment methodology.”

Can your current billing staff “handle a double workload beginning Jan. 1, 2020?” Warmack asks. If not, you’ll need to staff up.

Plus: “Make sure your billing processes are solid. If your electronic medical record system has productivity reports, look at how many days from the assessment date to submission of the RAP bill and how many days from end of episode to final claim,” Magrady urges. “If your RAPs are taking longer than seven days to go out and your final claims more than 10 days, investigate to identify and address issues now.”

Action Item 6: Scrutinize Orders Process

In your billing analysis, you might find slowdowns due to late paperwork from referring physicians. Agencies must ensure “timely and accurate completion of paperwork,” Griffin emphasizes. (That goes for paperwork from internal staff as well.)

“Review order processing for any systemic issues that result in hold-ups to receiving signed orders,” Osentoski recommends.

Action Item 7: Diversify Referral Sources

Days of being a “niche” provider may be gone once PDGM takes effect, predicts attorney Robert Markette Jr. with Hall Render in Indianapolis.

Agencies should “look to diversify their referral sources to ensure that they have a good mix of patient characteristics,” Magrady advises.

Action Item 8: Start Working on OASIS Accuracy

A big part of your PDGM payment will rely on OASIS functional item scoring. (Reminder: PDGM cuts clinical domain OASIS item scores as a case mix factor altogether, replacing them with enhanced diagnosis coding factors instead.)

You need to make sure your staff are answering the eight OASIS functional items accurately, Magrady urges. They are M1800: Grooming; M1810: Current ability to dress upper body safely; M1820: Current ability to dress lower body safely; M1830: Bathing; M1840: Toilet Transferring; M1850: Transferring; M1860: Ambulation/Locomotion; and M1033: Risk for hospitalization. M1800 and M1033 are both new to the case mix system under PDGM.

Do This: “Evaluate staff completing OASIS assessments for their accuracy,” Osentoski says. “This includes therapists who complete start of episode OASIS assessments.”

Action Item 9: Renegotiate Therapy Contracts

Many HHAs are doing some serious analysis and reworking of their therapy policies and procedures, given that PDGM cuts therapy visit utilization as a case mix factor entirely.

In light of that change, “begin to renegotiate contracts with contract therapists,” Warmack advises. “For example, try to decrease the cost of a visit and negotiate a different rate between a physical therapist versus a PT assistant, an occupational therapist versus a certified OT assistant,” etc.

Action Item 10: Prepare for a Cash Shortfall

While it might sound intimidating, you should ensure that you’re able to navigate the financial aspects of the transition. “Work with a lender now to secure a line of credit to cover the first three months of 2020,” Warmack urges.

Action Item 11: Line Up Cost-cutting Steps

While PDGM is supposed to be budget neutral, CMS has proposed making a preemptive 6.42 percent “adjustment” to reduce rates in anticipation of HHA behavioral changes. And on an individual level, many agencies will see cuts to their pay based on the major case mix changes in the model, Markette notes. Now is the time to generate cost-cutting ideas, and begin implementing them gradually, he stresses.

For Example: HHAs may want to explore using more therapy and nursing assistants, Osentoski suggests.

Increased use of remote monitoring may be another cost-cutting strategy, Markette offers.
Whatever your cost-cutting ideas are, make sure they are in place by January, so you can realize their savings when PDGM — and its cuts — hit.

Action Item 12: Analyze Your Pay Structure

If you’re still paying staff per visit, PDGM’s onset is a great time to change that. Under the new model, efficiency and quality are top priorities, Laff notes.

HHAs should consider trying to provide their staff with financial incentives that align with their own, Markette says. And that’s likely to mean eliminating incentives for clinicians to provide unnecessary visits.

Action Item 13: Check Assessment Staff Capacity

Just as the workload will increase for your billers under PDGM, it’s also likely to increase for your assessment staff, thanks to a predicted increase for SOC and Significant Change in Condition assessments.

“Does the agency RN staffing have the capability to handle the extra workload?” Warmack asks. Plus, “nursing staff will need re-training on recognizing the events or patient changes that require a SCIC. Agencies have been lax in conducting these assessments despite regulations telling them to do so.”

Action Item 14: Accommodate RCD

HHAs in Illinois are beginning the pre-claim review Review Choice Demonstration June 1. But the other four demo states may be launching RCD by early next year.

“Agencies that are also subject to the Review Choice Demonstration will need to make sure their planning includes more billing periods and takes into account the increased administrative burden that will entail,” Magrady points out.

Learn More

Get your PDGM ramp-up roadmap in weekly installments of critical info, insights, and must-do action items with your subscription to Eli’s Home Care Week. Our experts will equip you to master the latest hospice payment updates and regulatory revamps, stay off the TPE’s radar, and meet quality reporting requirements to ensure you bank the revenue you deserve and preserve the financial health of your agency.


Rebecca L. Johnson
Executive Editor, Newsletters

Rebecca has covered the ever-evolving home health and hospice markets for 20 years, starting about the time the Balanced Budget Act ushered in the devastating Interim Payment System. Under a myriad of payment and regulatory changes, Rebecca has helped home health agencies and hospices thrive and stay compliant. She has also covered markets ranging from internet banking to managed care to physicians. She is an expert on legislation, regulation, reimbursement, operations, business strategies, and more. Rebecca received her Bachelor of Science degree from University of Illinois Urbana-Champaign.

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