How Your Support Could Impact PDGM

PDGM Healthcare Professional Taking Care of Patient

As we approach 2020, home health agencies are preparing for CMS implementation of the Medicare Patient-Driven Groupings Model (PDGM) scheduled for January 1, 2020. Under the new payment model, providers would convert from a 60-day payment unit to a 30-day payment unit, transition from using therapy visit volume as payment-level determinants and adjust to new patient characteristics as the basis of payment. However, one of the most significant issues with PDGM is the current CMS proposal to reduce the rates for anticipated industry “behaviors.” 

The Bipartisan Budget Act issued in 2018 requires new payment models to remain budget neutral to ensure future spending is consistent with current spending-level projections. Aside from budget neutrality, CMS has been given authority to set payment adjustments based on industry behaviors unrelated to changes in patients served or services delivered that could increase payments. Medicare has proposed, with budget neutrality and behavior-based adjustments, an overall 8.01 percent reduction in the national standard home health payment rates under PDGM. Expounded, this would reflect a $1.298 billion decrease in the very first year of PDGM implementation.

Bipartisan support against such a high reduction in home health payments has resulted in the Home Health Payment Innovation Act (S. 433 and H.R. 2573). If passed, this act would:

  • Attain full budget neutrality from 2020 through 2029
  • Prohibit rate reductions based on assumptions before payment models are implemented
  • Require behavior adjustments to be based on actual changes in provider behavior
  • Allow rate adjustments greater than 2 percent to be phased in while ensuring full budget neutrality by 2029
  • Allow Medicare Advantage plans and the Center for Medicare & Medicaid Innovation to waive the “confined to the home” requirement when it’s in the beneficiary’s best interest

To learn more about the Home Health Payment Innovation Act, read Senate Bill 433 and House Bill 2573. To learn more about this act and learn how to contact your legislators, visit the National Association for Home Care & Hospice Advocacy website.

For more information on how PDGM will affect your agency, reach out to your BKD trusted advisor or use the Contact Us form below.


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