Home health agencies are in a fix with the multitude of compliance regulations bound to change in the coming year. One of which is the Patient-Driven Groupings Model (PDGM) proposed by the Centers for Medicare & Medicaid Services (CMS).
The proposed policy seeks to change how home health agencies bill for the dispensation of care.
Primarily, providers can no longer use the therapy threshold as a determinant for their payment rates.
Why Cut Therapy Thresholds?
Therapy threshold has long been a point of concern for the Medicare Payment Advisory Commission (MedPAC), lawmakers and industry groups alike. The concerns stem from home health agencies using therapy volume as a payment rate determinant in filing their claims.
MedPAC has long been recommending to Congress for Medicare to eliminate the therapy visits threshold as a payment determinant in the home health payment system.
Between 1997 and 2016, MedPAC reports that therapy visits increased from 10% of all home health visits to 39%. The commission found that agencies providing more therapy per episode are more profitable.
The basic goal of the modification is to remove incentives for agencies to over-provide therapy, according to CMS. Instead, the new model will closely tie therapy payment to clinical characteristics and patients’ needs.
“The redesign of the home health payment system encourages value over volume and removes incentives to provide unnecessary care,” CMS Administration Seem Verma said in an agency announcement.
The Bipartisan Budget Act of 2018 further spurs on this reform. The legislation seeks to remodel the home health payment by 2020, which includes changing to 30-day episode periods among others.
Moving in the Right Direction
Earlier this year, the National Association of Home Care & Hospice’s (NAHC) conducted an open forum that highlights the concerns over PDGM’s effects on home health providers.
The open forum panelists included Kornetti & Krafft Health Care Solutions CEO Cindy Krafft, Simione Healthcare Consultants Principal William Simione III, Healthcare Provider Solutions Inc. CEO Melinda Gaboury and BKD LLP Partner Mark Sharp, while NAHC President Bill Dombi moderated the open forum sessions that largely discussed PDGM and therapy concerns.
Pundits in the forum said agencies need to know of that this change is not necessarily a bad thing. They urged home health providers to address changes to therapy visits positively, but everyone needs to create a plan.
1) Create a Systematic Approach to Delivering Therapy
According to Sharp, their firm has looked at the top-performing home health agencies across a variety of measures and analyzed key points that made them successful. What stood out is that successful agencies show a systematic approach to delivering value, including therapy, to their patients.
“I am all for removing therapy utilization out of the equation,” Sharp said. “That doesn’t mean that therapy is [not] paid for anymore.”
Dombi echoed this sentiment.
“If this new model works, you should be looking at the therapy patient in terms of clinical need the same way, maybe even expanded by getting rid of that improvement standard that blocks some access to care for therapy patients,” he said.
Agencies need to recognize therapy as another form of care delivered for the patient. Medicare will continue paying for dispensed value therapy visits whenever needed by the patient.
2) Therapy is still necessary, if not a more practical
Simione referenced the need for the industry to not fall to concerns with the changes to therapy volume and continue delivering therapy services under PDGM.
“Somebody made the comment to me today, ‘We’re going to start hiring a lot more home health aides, and we’re going to start getting rid of a lot of our [occupational therapists],’” Simione said. “I look at that and kind of get a little nervous because there’s been a lot of benefits … of having the OTs.”
Largely, those benefits have centered on teaching home health patients a practical, independent way of accomplishing tasks and routine activities, such as putting on socks, he said.
Krafft also sees this as an opportunity to better justify the delivery of therapy visits in recent years. She expects that if agencies can adjust to the changes without scaling back therapy services, it will help validate that home health providers have been offering necessary services to their patients.
“I’ve been a big fan of getting rid of the therapy threshold for a long time,” Krafft said. “I’m kind of tired feeling like we’re being made the villain in the situation.” However, PDGM may also verify the opposite. If agencies shy away from therapy services, believing they lost all benefits, then validates critics’ concerns over therapy visits.
3) Keep everyone on the same page
Aside from keeping a consistent approach in offering therapy services, agencies also need to prepare for PDGM by creating an inter-department internal committee on what the reform means to the agency and how it can affect day-to-day operations. That includes staff from billing all the way to clinicians.
“All stakeholders really need to be involved in the planning for this,” Simione said. “You really need to have every single department within your organization learning this, understanding it, breathing it.”
Garboury, echoed that idea, emphasizing that providers need to prepare for PDGM on an operational level beginning today, even as providers digest CMS payment changes for next year.
“You can’t say to yourself, ‘The year 2020 is still a whole 13, 14 months away,’” she said. “You have to start working on those care models now in determining what you’re really going to do when it comes down to it.”
She highlights billing in particular. Billers need to get up to speed as PDGM halves the 60-day episode of care unit of payment down to 30 days if implemented, she said.
CMS’ proposed payment rule is projected to increase Medicare payments to home health agencies by 2.1%, or $400 million, in calendar year 2019.