From first quarter shortfalls to growth of niche marketing, expect to see these home care trends under PDGM
One of the primary objections to Medicare’s new Patient-Driven Groupings Model (PDGM) – and one of its inherent ironies -- is that the Centers for Medicare and Medicaid Services (CMS) has predicated its new payment methodology on anticipated provider behavior.
CMS continues to push home care providers toward evidence-based practice, stressing the importance of accumulating and acting upon objective data which has been tracked and measured. But CMS has structured the new home health payment model launching in January 2020 on predictions rather than existing evidence, prompting an outcry from the home care industry.
“There’s a great deal of frustration among home care providers over the irony in this,” said J’non Griffin, owner and president of Home Health Solutions. “And we’re seeing some pushback to require CMS to stick to hard data instead of assumptions.”
Bi-partisan sponsored legislation currently moving through committee in the U.S. Senate would require CMS to use data-based payment methodology. The Home Health Payment Innovation Act, or S_433, is currently in the Senate Finance Committee for review.
What CMS expects Home care provider behavior CMS anticipates, and has factored into its new payment model, includes:
· Ordering diagnosis codes in a manner to ensure higher reimbursement
· Reporting more secondary diagnoses to boost reimbursement through comorbidity adjustments
· Adding extra home visits for each billing period to avoid Low Utilization Payment Adjustments (LUPAs) and receive full payment
Our own predictions If CMS can extrapolate provider behavior, so can the experts in the field. Here is a look at five of the trends home health leaders, including J’non, are predicting to occur under PDGM.
1. A hard first quarter Cash flow could be a serious issue for agencies failing to adequately plan for first quarter shortfalls under the new 30-day billing periods, which will reduce the split percentage payments agencies receive prior to submission of the final claim.
“Some estimates are showing providers will see their cash-flow levels drop by double digits in January and February,” J’non warned. “Agencies need to prepare for this. ”
Currently, agencies submit a plan of care outlining services they will provide over a 60-day episode of care along with a Request for Anticipated Payment, or RAP, and receive partial reimbursement based on expected use of resources. The rest of the payment is made once the final claim has been submitted.
Under PDGM, agencies will submit a RAP at the beginning of each 30-day period, and then submit the final claim at the end of each 30-day period. The split percentage payment will be 60/40 for the first 30-day period of care and 50/50 for all subsequent 30-day periods.
Since the split percentage payments will be for 30-day periods rather than 60, the amount agencies receive up front will be significantly less.
(Read more about RAPs under PDGM here. )
2. Mergers and acquisitions First quarter financial struggles could place cash-strapped home care agencies in precarious positions – and some experts are predicting a resulting flurry of bankruptcies, mergers and acquisitions in early 2020.
“This isn’t necessarily a doomsday prediction, though,” J’non said. “Agencies doing strategic planning now are more likely to weather the first few months of 2020 – and remember that some agencies are predicted to actually become more profitable under the new payment model.”
3. New intake processes As part of the adjustments required to broaden their patient mix, many agencies are re-thinking their intake processes for ways to effectively monitor patient volume, and better match new admissions to available resources.
“All agencies need to look at whether they need to streamline and adapt admission criteria and how to best do that,” J’non said. “We can expect to see some significant intake process changes at many agencies because of PDGM.”
Increasing automation is likely for intake processes because it offers the means to expedite intake, constantly evaluate the current balance of patients and ensure the most cost-effective use of resources, according to J’non. “And as part of this overall move, it’s likely that we will also see intake processes at home care agencies become more mobile-driven in the next few years,” she added.
Although home health patients still tend to be older and less comfortable with technology than the population at large, increasing numbers of patients are becoming ready for a mobile approach to home care, according to J’non.
“The Baby Boomer generation is aging,” she said. “Many Baby Boomers do text and Skype now, and are more comfortable with the use of technology as part of the episode of home care.”
4. Telehealth expansion
CMS seems to be on board with bringing technology to a patient population becoming increasingly comfortable with telehealth. New measures are paving the way for telehealth reimbursement.
A set of CMS policies designed to expand the use of telehealth benefits under the Medicare Advantage program was finalized earlier this month, and CMS has also widened the scope of supplemental benefits Medicare Advantage plans can offer in 2020. The expansion gives Medicare Advantage plans permission to cover benefits that “have a reasonable expectation of improving or maintaining the health or overall function” of beneficiaries with chronic conditions.
“It’s looking like telehealth could play a much larger role in 2020 and beyond,” J’non said.
Agencies are still trying to figure out how the new Medicare Advantage benefits can best be incorporated into their services, but most home health leaders agree that home care will likely see increasing use of telehealth for more cost-effective therapy services under PDGM. Some therapy visits to the home might be replaced with telemonitoring, for example.
Telehealth also offers the means to monitor patients who may be at a higher risk of hospital readmission or emergency care.
5. More niche marketing The new payment model may force home care agencies to look harder at their branding and marketing efforts to attract and maintain some of those patients who require more a better balance of patients from a financial perspective, according to J’non.
“We can probably expect to see increased niche marketing in home health as more agencies try to capture a market segment with a higher return under the new payment model, making sure to use their resources in a more cost-effective manner,” she said.
In pursuit of strategic alliances and partnerships with certain referral sources, some agencies may bill themselves as specialists in care for CHF patients, for example, while other agencies pursue neurologically-impaired patients.
We can help
Does your agency need help making sense of PDGM and the changes it will bring? Home Health Solutions can help with training, operational analysis and other aspects of PDGM implementation. Contact us today to get started!