Home Health PDGM Winners and Losers: State Level Data

With just over 6 months until the new Patient Driven Grouping Model (PDGM) goes into effect, the home health industry is awash in a sea of comparative data. State-level comparisons of 2017 CMS, and HHGM PPS data project overall reimbursement for home health services to fall under PDGM in some states and rise incrementally in others.

For example, states expected to experience the most significant payment reductions under PDGM in 2020 if 2017 case mix trends hold true include: Colorado (-11.3%), Idaho (-11.4%), South Dakota (- 11.2%), Utah (- 9.2%), Florida (-8.4%), Nevada (-8%), and Wyoming (-6.4%). Potential winners, those states whose data indicates the projected highest increased overall home health revenue based on 2017 data, include Mississippi (+ 7.8%), New York (+ 5.2%), Oklahoma (+6.5%), California (+ 4.7%), and Louisiana (+ 6.7%). With respect to regional impact, New England States data shows more consistency: Connecticut (+ 1.2%), Massachusetts (+ 3.1%), Maine (-0.9%), New Hampshire (+ 0.8%), Vermont (+ 4.8%), and Rhode Island (- 1.5%)

Lack of ICD-10-CM Coding Expertise May Come Back to Haunt Some Home Health Agencies

Much has been written about the potential for negative financial impact of the CMS Home Health Patient Driven Groupings Model (PDGM) set to take effect on January 1, 2020, particularly for Home Health Agencies (HHA) with a high percentage of revenue from therapy services. Indeed, it feels like the predictions of doom and gloom circa 2014-2015 surrounding the transition to ICD-10-CM all over again. It feels that way in part due to the drumbeat of industry articles, webinars, and guidebooks coming out to capitalize on the transition to PDGM.

In the swirl and hand wringing surrounding the transition to PDGM, the comparison to the ICD-10-CM transition is apt. Just as post-acute healthcare providers were left behind in the great gold rush of Meaningful Use incentives and are subsequently rushing to catch up in the era of interoperability because of under-investing in EHR technology; post-acute healthcare providers in general under-invested in developing internal ICD-10-CM expertise. This was a rational act, particularly on the part of HHAs, based on how Medicare has processed HHA claims.

While CMS has maintained a ‘Questionable Encounters’ (QE) list based on diagnosis codes that do not support home health services, imprecise primary diagnosis code, inaccurate sequencing or missing assignment of comorbidity codes on the claim has not had a significant impact on claim acceptance or reimbursement under the current HHGM model. Under PDGM, imprecise or incorrect coding of primary diagnosis and missing or inaccurate secondary diagnosis, depending on the issue, can result in claims returned for re-coding, lower reimbursement due to missing out on comorbidity adjustments, and an impact on the case mix for the episode. Indeed, some analysis of the current HHGM QE data indicates approximately 60% of home health episodes are currently billed with a HHGM QE diagnosis and these codes do not have a clinical grouping under PDGM.

Home Health Agencies have a lot to do before the transition to PDGM on January 1, 2020. While PDGM factors such as episode timing and referral source are important to analyze and plan for the revenue impact, and the OASIS still looms large as a factor with respect to resource use and patient functional impairment level, if HHAs do little else, having a plan to improve existing internal diagnosis coding expertise through training ASAP and/or adding certified coders to the mix may be just enough to avoid the most immediate anticipated consequences of the transition.