1. Pierotti, Danielle PhD, RN, CENP

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On October 31, 2018, the Centers for Medicare and Medicaid Services (CMS) released the final rule for calendar year 2019 Medicare Home Healthcare payment updates. This year it includes a major shift in how payment for home care is calculated. The Patient Driven Groupings Model (PDGM), originally called the Home Health Grouping Model, is set for implementation in 2020, and will link patient care and resources needs directly to payment level. The model is designed to meet the requirements of the Bipartisan Budget Act of 2018 (BBA). Among other things, the BBA required changes in payment be implemented by January of 2020, be budget neutral for Medicare, prohibited the use of therapy volume as a threshold for payment, and be based on 30-day payment units. These are very significant changes for home care-forcing an examination of how every agency operates and place nursing charting under more pressure.


The most obvious change from the current structure is the billing cycle. Currently, patients are admitted for 60-day episodes of care with requirements for the Outcome and Assessment Information Set (OASIS) assessments matched to the 60-day calendar, which is aligned with payment for the episode. The PDGM model maintains the 60-day episode of care and OASIS requirements, but splits the bill into 30-day increments. After that, payments are calculated from four categories of patient criteria: admission source and timing, clinical grouping, functional level, and comorbidity adjustment.


Admission source and timing-Each 30-day period will be classified into one of two admission source categories-community or institutional-depending on what healthcare setting was utilized in the 14 days prior to home care. The 30-day period would be categorized as institutional if an acute or postacute care stay occurred within the prior 14 days to the start of the 30-day period of care. The 30-day period would be categorized as community if there was no acute or postacute care stay in the 14 days prior to the start of the 30-day period of care.


CMS will classify 30-day periods of care under the PDGM as "early" or "late" depending on when they occur within a sequence of 30-day periods. The first 30-day period would be classified as early and all subsequent 30-day periods will be classified as late. New 30-day periods of care cannot be considered early unless there is a gap of more than 60 days between the end of one period and the start of another.


Clinical grouping-The rule includes 12 clinical groups (Table 1). These groups are determined by the admitting diagnosis. The first five groups are Musculoskeletal Rehabilitation, Neuro/Stroke Rehabilitation, Wounds, Behavioral Health, and Complex Nursing Interventions. Then there are seven different types of Medication Management, Teaching and Assessment. Each group is associated with a list of primary diagnosis (ICD 10 codes). The primary admitting diagnosis must fall into one of the defined categories or the claim is at risk of being rejected.

Table 1 - Click to enlarge in new windowTable 1. Twelve Clinical Groups

Functional level-Patients are further differentiated by low, medium, or high functional level. These levels are entirely determined by the OASIS assessment items for activities of daily living: M1800, M1810, M1820, M1830, M1840, M1850, M1860, and M1033. Points are associated with each response for each item. The sum of these points is used as a functional score and determines the functional level for billing. The point system is not yet final. Analysis of 2018 documentation will be used to determine the final algorithm.


Comorbidity adjustment-Patient comorbidities, considered with three levels of payment adjustment (none, low, or high), are based on documented secondary diagnosis. The goal is to include consideration for both individual comorbidities and groups of comorbidities that significantly impact the resource needs of patients. Charts are published in the rule defining the diagnoses that qualify for the low and high adjustments. A 30-day period of care can receive payment for a low or a high comorbidity adjustment, but only one. Regardless of the number of comorbidities on the low adjustment table or the number of comorbidity group interactions a patient may have, the adjustment is made once.


At the end of all of this, each 30-day increment of care will be assigned one of 432 possible payment groups. This changes the way billing is processed, reviews will be managed, and financial projections made at a baseline. It will be tempting for clinical teams to defer this issue to the billing and compliance departments. That would be a mistake. Although billing teams will need to make notable changes in how they operate, this is a clinical system and it needs clinical leadership for successful implementation.


CMS states the goal is to match payment to individual patient needs. More than ever, the patient's clinical characteristics define the reimbursement for services. For example, the reliance on diagnosis codes means interdisciplinary communication across settings is even more important. It is no longer enough to know a patient is being treated for depression or bipolar disorder. It must be a documented diagnosis. It is imperative that nurses directly assess the patient performing activities of daily living and not limit assessments to patient reports of their skills. Functional-level scores are a key component of PDGM. It is not enough to meet the patient needs. They must be clearly and consistently documented. The inclusion of these components of care in the billing structure add emphasis to best practice representing an opportunity for nurses to reprioritize work flow and connect patient needs directly to the agency bottom line.


This overview is only an introduction to PDGM. There are many nuances to the system and numerous questions yet to be answered. PDGM poses challenges for home healthcare agencies on numerous levels. It is based on untested models. Pieces of it are still evolving. It mixes 60-day episodes with 30-day bills. Changes are likely to occur to the model before and after it starts. The question is-who will lead this change? Home care nurses have an opportunity to take the lead in adapting to this model. CMS states the goal of PDGM is patient-centered payment that reflects and reimburses for the resources patients need at home. No one knows what those needs are and what is required to meet them better than the clinical team lead by the nurse. Over the next several months, many resources and learning opportunities will be available about PDGM. Hopefully, they will all remember that PDGM is as much a clinical model as a billing one.