pdgm is coming in 2020: how to prepare? - hca-nys.org · 5 hhgm rescue proposal - october 26, 2017...

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Chris Attaya VP of Product Strategy

Home Care Association of New York

Senior Financial Managers Retreat

September 7, 2018

PDGM is Coming

in 2020: How to

Prepare?

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▸ Understand the latest updates for CMS and the components

of the proposed PDGM model

▸ Identify the winners and losers and other insights based on

data from SHP

▸ Share key takeaways to help your agency’s prepare for a

PDGM-like model

Objectives

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Understand the latest updates for CMS and the

components of the proposed PDGM model

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▸ CMS contracted with Abt Associates to reassess the current

HHPPS model and develop an alternative payment model that

better aligns patients needs and payments

▸ Uses 30-day periods rather than 60-day episodes for payment

▸ Eliminates the use of the number of therapy visits in payment

determination

▸ Relies on clinical characteristics and other patient information

in the model

▸ Includes Non-Routine Supplies (NRS) in the base rate

▸ Proposed to begin January 1, 2019 in a non-budget neutral

manner ($950M reduction in payments)

CY 2018 Proposed Rule – July 2017

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▸ HHGM Rescue Proposal - October 26, 2017

▹ Allow 30 day payment period but maintain 60 day certifications

▹ Start January 1, 2020 with rate of $1,772

▹ Extend HH-VBP to all remaining states

▸ Industry Letter to CMS – December 12, 2017

▹ Principles – Budget Neutral; Limit Behavioral change adjustment;

Reasonable Reimbursement; Payment on Patient Characteristics

and Clinical Needs; Operating Consistently with other aspects of

service delivery; Enough Time to implement; and Fully Tested

and Validated.

▸ Almost Family Proposal

▹ Model focuses on patient “goals” rather than “characteristics”

▸ Technical Expert Panel (TEP) – February 1, 2018

Industry CMS Negotiations

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▸ LUPAs one visit under the HHGM thresholds

▹ FY 2001 – 16% of episodes were LUPA

▹ 7% of current 60-day episodes receive a LUPA

▹ 4.9% of 30-day periods of care are just one visit below thresholds

▹ Agencies would provide one additional visit to avoid a LUPA

▸ Highest paying Dx code would be listed as Primary Dx

▹ Compared changes from DRGs to MS-DRGs

▹ IRF PPS first year transition

▹ Experience in HH nominal case mix growth

▹No Explicit comment on increasing number of Periods

Behavioral Adjustments (HHGM)

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▸ Budget Neutral Transition To A 30-Day Unit Of Payment For Home

Health Services

▸ 30-DAY UNIT OF SERVICE.—For purposes of implementing the

prospective payment system with respect to home health units of

service furnished during a year beginning with 2020, the Secretary

shall apply a 30-day unit of service as the unit of service applied

under this paragraph.

▸ TREATMENT OF THERAPY THRESHOLDS.—For 2020 and

subsequent years, the Secretary shall eliminate the use of therapy

thresholds (established by the Secretary) in case mix adjustment

factors established under clause (i) for calculating payments under the

prospective payment system under this subsection

▸ IN GENERAL.—The Secretary shall annually determine the impact of

differences between assumed behavior changes

Bipartisan Budget Act of 2018 (BiBA)

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▸ Model renamed – Patient-Driven Groupings Model (PDGM)

▸ “Warmed-over” version of HHGM

▸ Added additional level for Comorbidity adjustment based on

the presence of secondary diagnoses

▸ Standard Rate and Behavioral assumptions

CY 2019 Proposed Rule – July 2018

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Structure of the PDGM

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6

3

=

216 Groups

3

x

x

x

Source: CMS CY 2019 HH Proposed Rule

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▸ The first 30 days would be defined as early and all other

subsequent period would be classified as late

▸ A 30-day period could not be considered early unless there

was a gap of more than 60 days between the end of one

period and the start of another

Timing of 30-Day Periods


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▸ Patients discharged from an institutional setting (acute or

post-acute) in the prior 14 days will be defined as institutional

and all others as community

▸ Second periods with a institutional discharge within 14 days of

the SOC would be considered community

Admission Source


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▸ Based on the Principle Diagnosis on the Home Health Claim

▸ Would be the primary reason patient is receiving services

under the Medicare home health benefit

Clinical Groups


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Clinical Groups

▸ Questionable Encounters (QE’s) were not to referred to. CMS

now refers to the list of diagnosis codes that are “acceptable”

in the PDGM Grouping Tool

▸ If a 30-day period of care could not be grouped based on the home

health reported principal diagnosis, it is expected the claim would be

returned to the provider for more accurate or definitive coding

▸ Regarding the MMTA category, CMS noted “We believe MMTA is

not so much an ‘other’ category as much as it appears to represent

the foundation of home health.”

Source: Table 38: Distribution of resource use of MMTA Subgroups -CMS CY 2019 HH Proposed Rule

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▸ Like with the current HHPPS model, PDGM patients would be

classified into 1 of 3 functional level based on the following

OASIS items:

▸ Functional Levels based on Points

▹ Low, Medium, High

Functional Level

M1800 – Grooming M1840 – Toilet Transferring

M1810 – Dress Upper Body M1850 – Transferring

M1820 – Dress Lower Body M1860 - Ambulation

M1830 - Bathing M1033 – Risk of Hospitalization

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▸ CMS designed to have 1/3 as low, medium and high in each

of the Clinical Groups

Functional Level


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Clinical and Functional Groups


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▸ CMS analyzed the presence of comorbidities as another

factor that could impact resource utilization and costs

▸ Refined the eleven clinically significant subcategories to

include interactions of 27 comorbidity subgroups

Co-morbidity Adjustment


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▸ RAPs (Request for Anticipated Payments) and Final Claims

billed the same way, but for 30-day Periods

▹ CMS soliciting comments on reducing the percentage of the upfront

payment incrementally over a period of time

▹ Newly enrolled HHAs as of 1/1/19 to be exempt from receiving RAPs

▸ PEPs (Partial Episode Payments) and Outliers have the same

methodology

▸ LUPAs have variable thresholds based on HIPPS code – Each

HHGM payment group threshold based on 10th percentile of

visits or 2 visits which ever is higher

▹ LUPA visits are one less than the threshold listed

▹ Thresholds ranges from 2 visits – 6 visits

Other Key Elements

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▸ CMS is providing CCN specific revenue changes under PDGM

compared to the current HHPPS on their website

▸ Includes assumption of the $1,873.91 30-day rate due to

expectation that behavioral factors have occurred

Financial Impacts of PDGM


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▸Nationally the percent of agencies who will see higher

revenue under PDGM vs HHPPS is 55.6% (76.4% in the

state of New York)

▸Estimate Impact by State range from 28.6% in the Virgin

Islands to -11.6% in Idaho (NY is at 6.0%)

▸ Limited Data Set (LDS) is available for agencies who

request to help address and understand which patients

that are impacting the revenue changes

▸Without RAPs, cash flow will be impacted by at least 32

days

Financial Impacts of PDGM

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▸Cost report data for discipline values is suspect

▸Admission source is a poor substitute for patient

characteristics – provides incentive to prioritize these

patients

▸ LUPA thresholds is complicated

▸Behavioral adjustments (BA) should be applied after

impact has been studied with supporting evidence

▸BA should only include changes related to PDGM only

Concerns from NAHC – Proposed Comments

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Identify the winners and losers and other insights based on data from SHP

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▸ SHP National Database

▸ All Medicare Traditional Episodes ending in CY 2017 with a

corresponding Medicare claim (August 8, 2018)

▸ HHGM Grouper model was used with a correction

▸ Total Episode Count – 3,657,930

▹ 624,294 Questionable Diagnoses (17.1%)

▹ 7,199 Unknown Diagnoses (.1%)

▸ HHGM Period #1 – 2,553,662

▸ HHGM Period #2 – 1,895,908

▸ Revenue assumptions based on CY 2017 National Rates for

HHPPS HHRGs (inc. Non-Routine Supplies) compared to the

CY2018 Proposed Rule HHGM Group Model with estimated budget

neutral rate of $1,772 (no Area Wage assumptions)

SHP Data Analysis – CY 2017

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▸ Clinical Group

HHGM Components by CMS region

NY 53.0%

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▸ Functional Level


NY 46.1%

NY 20.9%

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▸ Admission Source (Period 1)


NY 37.7%

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▸ Timing of the Episode


NY 53.4%

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▸ LUPA Percent of Periods highest in the Northeast

LUPA data across CMS Regions

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▸ LUPA averaged 8.2% across all periods

LUPA data across HHGM Clinical Categories

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▸ Reflects the higher resource use in the first Period

▸ Likely to see visits changing due to therapy incentive changes

Visits per Period

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▸ Built into the case mix weight of each PDGM group

▸ CMS has estimated that 60% of the CY 2017 did not contain

Non-routine Supplies (NRS)

▸ Wounds have higher non-routine supply cost per new Clinical

Groupings

Supply Costs

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HHGM Revenue Compared to HHRG

▸ Based on Standard PPS Episodes (excluding LUPA, PEP,

Outliers)

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Top 25 ICD-10 Primary Dx Codes

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Top 25 ICD-10 Primary Dx Codes

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Comparison of Top Diagnosis Codes

▸ Top Diagnosis codes in each HHGM Clinical Group

▸ HHGM Revenue is lower in 3 of the 6 Groups

▸ Variance is significant compared to national PPS rates are

reimbursed today

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▸ SHP National Average was 17.1%

Questionable Encounters (QE)

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▸ Begin to address codes that would be questionable

Top 20 QEs by ICD-10 Code

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▸ Shows Percent of Episodes across 1- 15 days, 27 – 30 days

and at 60 days

Lengths of Stay (LOS) by Region

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Share key takeaways to help your agency’s prepare for a

PDGM-like model

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▸ PDGM has been designed based on National Resource Use

▸ Model the revenue changes between todays HHPPS and

PDGM using the 80/20 rule

▹ Groupings Tool - https://www.cms.gov/Center/Provider-

Type/Home-Health-Agency-HHA-Center.html

▸ Consider the Marketing Impacts

▹ Competition for patients from institutions may increase

▹ LEAN look at your costs/efficiencies

▹ What is your value proposition

▸ Managing LUPAs with the different thresholds

Evaluate your Agency’s PDGM Impact

https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.html











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▸ Determining correct primary Diagnosis Coding

▸ Determining secondary Dx and impact on the co-morbidity

adjustment

▸ Avoiding Questionable Encounters (QEs)

▸ OASIS Accuracy is crucial for:

▹ Functional Levels that impact resource use

▹ Quality Outcomes

Coding Accuracy

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▸ Use of therapy assistants

▸ Use of rehab aides

▸ Use of tele rehab

▹ Utilize centralized therapist to make recommendations

▹ Observation of functional status via webcam

▹ Therapist can cover many more patients without travel

▸ What is right amount of therapy to produce results?

▸ Efficient and Effective plans of care

Therapy as a Cost vs Revenue Driver

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▸ Are the visits performed in the 2nd 30 days giving you positive

results?

▸ Avoid confusion between Payment Model vs Care Model

▸ Avoid discharging too early

▸ Will need to continue to determine plan of care and

interventions over 60 days

▹ Discharge to Community - PAC

▹ Medicare Spending per Beneficiary (MSPB) - PAC

▹ Potentially Preventable 30-Day Post-Discharge

Readmissions

Evaluate Length of Stay (LOS) Considerations

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Questions?

pdgm is coming in 2020: how to prepare? - hca-nys.org · 5 hhgm rescue proposal - october 26, 2017...

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