January 1, 2020 will bring many new beginnings, including the Patient Driven Groupings Model (PDGM).  No doubt the largest reimbursement system overhaul in home health since October 2000.

CMS continues to tweak the model and updates to the Claims Processing Manuals have begun.

PDGM preparation is Paramount!

The most significant changes to the PDGM Model, with the 2020 Home Health Proposed Rule, released July 2019, include the increase in the behavioral adjustment and the change in the percentage of reimbursement with the processing of the Request for Anticipated Payment (RAP), not to mention its proposed elimination in 2021, with the Notice of Admission (NOA) being the replacement.

Behavioral Adjustment

The PDGM proposed rule in July 2018 included a 6.42% behavioral adjustment that would be a reduction in the base rate of home health payments as a result of CMS forecasting what behavioral changes the industry will make as a result of the implementation of PDGM.  With the proposed rule in July 2019 for FY 2020, the behavioral adjustment is now proposed at 8.01%.  CMS has revealed that the assumptions, made in this regard, are centered in Primary Diagnoses, Secondary Diagnoses (Comorbidities) and decisions regarding LUPAs (Low Utilization Payment Adjustments).  Agencies have not been given a choice in the coding changes involving primary diagnoses, due to the fact that CMS has limited the set of diagnoses that can be used as primary in home health under PDGM.  Also, CMS basically said that much of the decision was focused on agencies having two diagnoses to choose from, for the primary diagnosis of the patient, and the agency goes with the one highest in reimbursement.  The comorbidities piece of the adjustment has a few things to consider:

  1. Agencies will likely code more comorbidities under PDGM because it does effect payment and therefore more attention will be given.
  2. In most cases, all of the codes we will see in PDGM may have been on the Plan of Care in the past, but never made it to the claim and therefore not available to CMS for consideration in making these assumptions.

In regard to the LUPA portion of the behavioral adjustment, there appears to have been a reduction in the LUPA percentage overall for the years under PPS and CMS is saying that they don’t anticipate that changing.  CMS is stating that they anticipate agencies providing an extra visit or two to intentionally avoid the LUPA adjustment.  While there may be some validity to the concept, it should not be a significant impact in year one as agencies will be struggling just to understand it all and to even figure out what the thresholds are.

The industry needs the support of agencies to help ensure the passing of S.433/H.R 2573.  This legislation would either completely eliminate the behavioral adjustment or greatly reduce it.  Contact your representatives today.

Requests for Anticipated Payments (RAPs)

For billing purposes, agencies will continue to bill Requests for Anticipated Payment (RAPs) and Final Claims, but for each 30-day payment period (which will essentially double the volume of Traditional Medicare billing). Similar to HHPPS, agencies will continue to receive split percentage payments.  However, the proposed rule contains language proposing that RAPS will only be reimbursed at 20% of the calculated 30-day payment based on the HIPPS code on the RAP.  Under the current PPS system agencies are reimbursed 60/40 for Start of Care episodes and all Recertification episodes have been 50/50.  This is a significant change from what was proposed in the 2018 rule.  The 60/40, 50/50 split was the expectation until the Proposed Rule July 2019.

Reminder:  Home health agencies that are certified for participation in Medicare on or after January 1, 2019, effective with PDGM implementation, will no longer receive split-percentage payments. These agencies will still be required to submit a “no pay” RAP at the beginning of every 30-day payment period.

Proposed Notice of Admission (NOA)

The July 2019 Proposed Rule also includes an official proposal for RAP payments to cease for all agencies in 2021. This would require transition to a Notice of Admission (NOA) format.  This means that HHAs would file a NOA upon admitting a patient to home health and only file final claims for each 30-day payment period.  This proposed rule does include that with the implementation of the NOA agencies would be required to have the NOA filed and accepted at the Medicare MAC no later than 5 days following the Start of Care date.  If the NOA is NOT accepted timely the agency would be penalized financially for every day up to the day the NOA is accepted as a proportion of 30 days.

The above are the significant changes in the Proposed 2020 Home Health Rule.  This series will include several blogs over the next few months that will break down the whole system and assist agencies in full preparation of PDGM.

Agencies should participate in the sending in of comments regarding the Proposed Rule for 2020.  The deadline for submitting comments is September 9, 2019 at 5:00 pm Eastern time.  Following is the link to submit your comments:

Healthcare Provider Solutions understands that thorough preparation is the key to success under PDGM.

We are dedicated to supporting HHAs with a customized PDGM Impact Analysis, outsourced billing solutions, and continued PDGM education. Our team of seasoned industry professionals is currently guiding agencies nationwide to a smooth PDGM transition.

Prepare for PDGM Success