How will PDGM impact Home Health Agencies

by Keith Grunig

Professional Headache


PDGM 2021- What is PDGM? 

Home Health Agencies (HHA) that have relied on therapy utilization as the primary means for revenue will likely be negatively impacted.  With PDGM removing therapy utilization as a factor into the reimbursement calculation, therapy utilization needs to be included and accounted for in the care plan.  CMS has a good idea of costs involved with home health and has used the data HHAs have given it to determine reimbursement rates.  By breaking the 60 day episode into two 30 day periods, CMS and agencies need to continue to show medical necessity to continue care.  Many agencies under PPS were handling ortho patients and discharging in 28 days but receiving 60 day reimbursement.  PDGM addresses and corrects that issue.  PDGM provides the HHA the reimbursement value based on the condition of the patient and the anticipated cost to provide care for that patient.  Wound patients cost HHA a lot of time and resources, so wound is reimbursed higher.  

Cost management is a big factor in the impact HHA will have.  In our results, many agencies that can reasonably get patients the full episode are seeing the same or slightly improved revenue.  

One area that is important for HHA is cost control.  Agencies must manage and control costs of the care plan for each patient.  By optimizing cost control and care plan, and maximizing reimbursement through correct OASIS and coding, agencies are thriving.  Home Care Answers provides the LUPA threshold and reimbursement for each patient on each report we provide.  These reports are essential in the care plan. 

PDGM- How Can I Avoid LUPA?

One thing that has been a consistent concern with PDGM and the addition of No Pay Rap in 2021(Read about it   ) is LUPA.  LUPA changed from a fixed number of visits with PPS to a sliding scale ranging between 2 and 6 visits for each 30 day period.  No Pay RAP has caused a little bit of a blind spot for agencies to know the LUPA threshold since OASIS doesn't have to be completed prior to submitting the RAP.  That means that the agency won't know what the LUPA threshold will be until either the claim is submitted or OASIS is complete so a HIPPS code can be generated..  Home Care Answers provides the anticipated reimbursement and the LUPA thresholds for each period for each patient in one report.  This is very important for agencies to have visibility so they can create an optimal plan of care and visit plan to provide the necessary therapy and visits for the patient while managing cost.  Here is an example of what the report looks like for each patient.


LUPA Threshold and Financial Reimbursement per episode


How will PDGM affect Therapists?

Many therapists have been concerned with the financial impact of PDGM.  PDGM gives HHA a total amount of reimbursement for each patient.  HHA need to provide the care the patient needs including therapies (PT, OT, ST), skilled nursing, supplies, and education.  There are more inputs than that, but those are the primary cost imputs.  Therapy aides are a good way to control costs.  Maybe an aide can make a visit to monitor and document vs the therapist.  Therapist inherently cost more than an aide.  Therapy is needed.  Targeted therapy the supports the patient's goals is really even better.  

Here is a good link addressing therapy impact.


PDGM for Dummies


We highlight what PDGM is in an earlier post called PDGM For Dummies that really helps agencies understand what PDGM is and how it affects them.  Home Care Answers can maximize reimbursement and provide data analytics to help agencies understand PDGM, how their agency is doing, where it may improve, and what to look for. 



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