Transitioning to the Patient-Driven Groupings Model

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With the continued shift toward value-based care, the Centers for Medicare & Medicaid Services (CMS) are overhauling the home health prospective payment system. Starting Jan. 1, 2020, the new Patient-Driven Groupings Model (PDGM) will be implemented and preparing now will be key to your future success. So, what do you need to know about PDGM and how can PointClickCare help you prepare? Let’s review some basics to get you started.

What is the Patient-Driven Groupings Model?

PDGM uses 30-day periods as a basis for payment. Each 30-day period can be categorized into one of 432 case-mix groups. 30-day periods are placed into different subgroups for each of the following broad categories:

  • Admission source (two subgroups): community or institutional
  • Timing of the 30-day period (two subgroups): early or late
  • Clinical grouping (twelve subgroups):
    • musculoskeletal rehabilitation; neuro/stroke rehabilitation; wounds; medication management; teaching; and assessment (MMTA) – surgical aftercare; MMTA – cardiac and circulatory; MMTA – endocrine; MMTA – gastrointestinal tract and genitourinary system; MMTA – infectious disease, neoplasms, and blood-forming diseases; MMTA – respiratory; MMTA – other; behavioral health; or complex nursing interventions
  • Functional impairment level (three subgroups): low, medium, or high
  • Comorbidity adjustment (three subgroups): none, low, or high based on secondary diagnoses

What does this change mean for the industry?

Proposed changes are projected to increase Medicare payments to home health agencies by 2.1%, or $400 million, in calendar year 2019. However, more than 44% of home health providers will see a decrease in reimbursement under PDGM.

Changes to come

The key changes will be in the details. For example, changes to Timing and Admission Source can swing the reimbursement amount by nearly 42% for the same patient between two 30-day episodes.

Timing: In the current Prospective Payment System model, the first two 60-day episodes are classified as early. However, in PDGM, timing defines an early episode as the first 30-days. All subsequent 30-day periods in the sequence are classified as late and will have a lower reimbursement amount. Today, about 25% of episodes are less than 30 days and approximately 73% are completed in less than 60 days.

Admission Source: Where the patient is coming from can also dramatically impact your payment. Under PDGM, each 30-day period is classified into one of two admission source categories — community or institutional — depending on what healthcare setting was utilized in the 14 days prior to home health admission. Patients coming from the community will have a lower reimbursement amount for the payment period than a patient coming from an institutional setting.

Timing and Admission Source: Combining these two factors for the same patient across the two different 30-day payment periods can be eye-opening. Late 30-day periods are always classified as a community admission unless there was an acute hospitalization in the 14-days prior to the late home health 30-day period.

PointClickCare is here to help you prepare for these changes and we aim to keep you updated throughout this journey. For more information, check out our PDGM Survival Guide.

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