Here’s What You Need To Know About PDGM In 2020

On Halloween of 2018, the Centers for Medicare & Medicaid Services (CMS) successfully passed measures unintentionally designed to spook home health agencies (HHAs) and in-home therapy providers. When the clock strikes midnight on New Year’s Eve, it’ll be more than just a year on the calendar that changes as the home health reimbursement system is set to be revamped to the Patient-Driven Groupings Model (PDGM) starting on January 1, 2020.

Despite the name, there is some controversy over whether the new regulations coming with the shift to PDGM will actually result in more patient-driven outcomes. There is a worry that patient costs will not go down, despite the CMS’s best intentions to do so. Let’s explore the changes in greater detail to find out if the Patient-Driven Groupings Model will improve the model for both the recipients and the providers of home health care.

What Is PDGM?

Patient-Driven Groupings Model (PDGM), is essentially a billing model for Home Health Agencies (HHAs) who work with patients through Medicare or Medicaid. The main goal of PDGM in 2020 is to move away from a quantity, or volume focused billing model and shift towards one that’s based on quality, or value, for patients. Essentially, the shift to PDGM should ultimately lead to reduced the overall cost of home health care delivery. At least, that’s what they hope will happen.

The primary way CMS is hoping to accomplish this more patient-driven model is by no longer determining home health payments through the total number of therapy visits. Under the previous model, HHAs were often able to game the reimbursement system by over-visiting patients (and over-charging them). Now, patient visits are designed to be handled in a budget-neutral manner.

How does PDGM in 2020 Affect Therapists and Home Health Agencies?

Previously, the standard operating procedure for home health agencies was to bundle-bill all services rendered within a 60-day period of care. Due to the Bipartisan Budget Act of 2018, the new standard has reduced that bundle period in half to 30 days.


Critics are worried that having to visit a physician once-per-month, as opposed to once every other month under the previous rules, would lead to increased costs for the patient. As a result, it’s been determined that the initial certification will be valid for two 30-day episodes of care, and recertifications will also be valid for a pair of 30-day periods of care. 

Essentially, nothing has changed for the patient or provider in that regard — HHAs and therapists need only the bundle bill itself will be truncated into 30-day sections as opposed to the old 60-day period.

PDGM, Home Health

Tips For How to Budget for PDGM in 2020

With the new Patient-Driven Groupings Model, there are now new payment categories that rely primarily on OASIS data, diagnosis coding, and other relevant patient data. All are sorted into episodes of care and further broken down by the following:

  1. Early or late: Whereas previously, the first two 60-day episodes were classified as “early” now only the initial 30-day period qualifies. Otherwise, it’s considered late.
  2. Institutional or community: Patient care is considered institutional if it’s within two weeks of a short term treatment, also known as an acute stay. It’s considered community if admission to the HHA is after 14 days or for chronic or long term treatment.
  3. Clinical grouping: Patients are classified within one of six clinical groups based upon their initial diagnosis (which is what prompted their treatment). 
  4. Functional level: Patients are grouped into high, medium, or low impairment levels.
  5. Comorbidity adjustment: Patients are again grouped into categories of high adjustment, low adjustment, or no adjustment.

Please remember that preparation for PDGM is a requirement for HHAs and in-home therapy providers. A failure in readiness for this new Patient-Driven Groupings Model could be the difference between merely surviving under the new rules and thriving under them. Stay ahead of the curve, and you will be successful under this new model.

Kevin O'Connor

Kevin O'Connor has been blogging online for over a decade. With a diverse background in topics ranging from real estate to the law to financial services (and everywhere seemingly in-between!) though his most frequent initial subject to blog about was sports. Nowadays, you're likely to find him talking online about important issues that he's passionate about, especially those regarding the future and health care.

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