Home Health & Hospice Week

The payment reform plan contains a whopping 432 case mix groups.

Trying to figure out how you will fare under the newly finalized Patient-Driven Groupings Model is no easy feat. That’s in part because Medicare has added seven new clinical subgroups to the case mix system.

As proposed in July, PDGM will consist of four steps to arrive at a patient’s case mix category and, thus, payment level (see box, p. 315). In response to provider comments, the Centers for Medicare & Medicaid Services substitutes seven MMTA subgroups for the previously proposed one group.

The difference: Accordingly, patients will fall into one of 432 case mix groups, as opposed to the proposed 216.

CMS’s ongoing analysis appears to have “identified a need to go deeper in their clinical grouping categories by moving up to 12 with the additions of subgroupings,” notes finance expert Mark Sharp with BKD in Springfield, Missouri.

This change will add to agencies’ confusion in grappling with the new system, predicts reimbursement expert Joe Osentoski with QIRT in Troy, Michigan. With “432 case mix groups from six major groups and seven subgroups,” HHAs may find it more difficult to determine in which case mix a patient will end up.

Plus: The varying Low Utilization Payment Adjustment levels based on each case mix category will also increase providers’ confusion, Osentoski anticipates.

The clinical group expansion “does increase the complexity,” Sharp tells Eli. “But hopefully it will provide more accurate correlation of payment to resource utilization.”

Are You A Loser Or Winner Under PDGM?

There is no simple way to determine just how you will perform under the new system, experts note. “There will need to be calculations done in each agency,” advises consultant Julianne Haydel with Haydel Consulting Services in Baton Rouge, Louisiana. “The patient population differs, and just because [PDGM contractor] Abt put in a bunch of data from agencies all over the country does not mean the results will be the same for each agency.”

That said, there appear to be some general categories of agencies that will thrive and suffer under PDGM.

Winners: Thanks to source of admission as a case mix element, PDGM appears to advantage agencies that have a diverse referral source base and patient population, notes consultant J’non Griffin with Home Health Solutions in Carbon Hill, Alabama.

Losers: Elimination of therapy as a case mix element makes HHAs providing therapy-heavy episodes at risk, Griffin notes. CMS’s estimates underscore this. The agency predicts that HHAs in the top 25 percent for nursing-to-therapy ratio (i.e., providing more nursing as compared to therapy) will see a 17.3 percent gain under PDGM. In contrast, HHAs in the bottom 25 quartile will see a 9.6 percent decrease in average reimbursement.

Agencies that furnish a high proportion of episodes at or under the 30-day mark also will face pay cuts under PDGM, Osentoski predicts. Episodes barely exceeding the 30-day mark will be ripe for medical review that can deny visits in the second 30-day episode, leading to denials or LUPAs.

In CMS’s impact analysis, the agency predicts that HHAs that will see the biggest payment impacts on average from PDGM are in the following categories:

• facility-based (3 percent increase) vs. proprietary (0.8 percent decrease);
• rural (3.8 percent increase) versus urban (0.6 percent decrease);
• fewer than 100 episodes (2.4 percent increase) versus more than 1,000 episodes (0.4 percent decrease); and
• Outlying (Guam, Puerto Rico, Virgin Islands — 10.6 percent increase) and West South Central (Arkansas, Louisiana, Oklahoma, Texas — 4.6 percent increase) regions versus South Atlantic (Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia — 5.1 percent decrease) and Mountain (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming — 5.0 percent decrease) regions.