Overview

There are four measures that are critical for a home health agency to track and manage to succeed under PDGM. Marketscape for Home Health provides a table for each of these measures so you can see your historical performance against each of these measures.

• 12 Clinical Groupings based on the principle diagnoses reported in each claim. These groups align with the most common types of care provided in home health care.
• Admission Source - Institutional vs. Community - A 30 day period of care is considered Institutional if the patient had an acute care stay within 14 days of home care admission. All second or subsequent contiguous 30 day periods are considered Community.
• Timing - Early vs. Late - The first 30-day period of a home health stay is considered early, each subsequent period of care is considered late.
• Comorbidities - none, low, or high - comorbidity is indicative of care complexity, outcomes, and treatment costs.

Each table provides a breakdown of all 30-day periods for one of these measures. So each table gives you an insight into your agencies breakdown of billing periods for each of the critical measures.

Questionable Encounters is a catchall category for any 30-day period that doesn't fit into one of the other clinical groupings. Any agency that has a high percentage of questionable encounters needs to improve their coding efforts. Questionable encounters are indicative of care provided that is not clinically relevant for home health services. If an agency think that the services are appropriate, they need to evaluate their coding. IMPORTANT - Claims identified as Questionable Encounters will only exist for periods prior to 2020. Any claims submitted that do not fit into one of the 12 clinical groups will not be processed, and hence, will not be counted in any category.

 The PDGM tables can be found by clicking on the PDGM Tab on the Analyze page for any home health agency.

PDGM Summary

Table Summary -  The Summary table provides a breakdown of 30-day episodes during the reporting period into the 12 clinical groupings providing counts and percentages of each for comparison, average lengths of stay for each grouping, number of stays for each, as well as total payment for all billing periods and average payments per billing period.

There are two immediate insights to glean from this table: 1) What is the proportion/mix of your agency's services by Clinical Group? Does your case mix indicate that your agency is in a risky place relative to reimbursement? 2) Identify your top reimbursement Clinical Grouping or Groupings. In addition to identifying where the highest reimbursement is coming from for you agency, these are the clinical groups you should be evaluating most closely in the remaining tables in this section of the Analyze page.

Admission Source

Table Summary - This table shows the relative percentages of Institutional versus Community billing periods, and provides state benchmarks for comparison. 

Each 30-Day-Payment Period will be classified based on the immediate origins of the patient. If a patient is discharged from a valid inpatient stay (hospital, SNF, IRF, LTCH, or Inpatient Psych) within 14 days of the home health start of care, the patient will fall into the Institutional grouping. Generally, the second 30-Day-Payment Period will be considered a Community Period. The exception is if the patient is transferred back to a hospital and then resumed within 14 days of the start of the next Payment Period. 

Under PDGM, payment incentives exist for shorter timeframes between patient discharge from a facility and the start of care (SOC) visit in home health. Typically, that path is much faster when the referral comes from a hospital or skilled nursing facility rather than a primary care doctor or community resource.
In this table you can see your historical patterns and compare Institutional sources with Community sources. It is then valuable to investigate your facility sources to identify new institutional referral sources and immediately start pursuing those partnerships that will help shift your referral mix more toward these types of entities.

Institutional Periods are reimbursed at a higher rate than Community Periods. Ideally, agencies would  want a balanced mix of patients classified as Institutional and Community admissions. Note: Keep in mind that the nomenclature can be a little confusing here – an Institutional Admission in the first 30-Day Payment Period most often will be followed by a second 30-Day-Payment Period that will still be referred to as a Community “Admission” even though the patient is continuing a course of treatment for a second or subsequent period.

Admission Timing

Table Summary - This table shows the relative percentages of early versus late billing periods, and provides state benchmarks for comparison. 

An Early Payment Period is generally the first 30-Day Payment Period. Any periods that immediately follow this period are considered Late Payment Periods. The current PEP rules apply; there must be a gap of at least 30 days between the end of a Payment Period and the beginning of the next one to revert the timing calculation to Early.

Ideally, agencies will want a balance between Early and Late Payment Periods. A preponderance of Early Periods for which no Late Period follows suggests that the agency will see a significant decline in overall reimbursement due to the absence of the follow-on payment periods. On the other hand, a much higher percentage of late periods suggests that reimbursement will be significantly less because case mix weights for Late Payment Periods are generally much less than those for Early Periods.

A few things to consider

• It is important to evaluate the four different combinations of Institutional/Community and Early/Late for each Clinical Group and understand reimbursement for each to pursue the proper balance. 
• The relationship between Early and Late Community Periods is the opposite of the Institutional group. Only 15% of Community Payment Periods are Early; the remainder are Late, suggesting much longer lengths of stay even though CMS considers this patient group to have lower overall acuity. Thus, in examining Institutional versus Community period divisions, it will also be important to view the divides in terms of Early versus Late periods.
• On average, the drop in case mix weight, measured as a percentage, from an Early to Late Community Payment Period ranges from 33% to 35% based on 2017 cases. Remember, that for the Community Admission Group, however, about 82% of all periods were classified as Late. This suggests a need to re-evaluate length of stay if this is descriptive of your agency’s history.
  • On the other hand, remember that Institutional Admissions are presumed to represent those patients with higher acuity than their Community counterparts. For this category, the drop between Early and Late Payment Periods ranges from 9% to 11%. The percentage of patients in this group that had services in Late Payment Periods in 2017 was only 27%.
• The average number of visits influences an agency’s ability to maintain positive margins on services provided. Visit frequencies and volume for therapy services will no longer affect reimbursement for services. As a result, it will be imperative for agencies to address patient need for services rather than reimbursement thresholds designed to boost payments.
• It will be necessary to create an effective balance of visits between payment periods to protect margins and avoid low utilization, or LUPA, adjustments. Under PDGM, LUPAs are paid at the wage adjusted visit rate based on variable thresholds rather than the stable, four visit, threshold used for PPS.

Comorbidity Adjustment

Table Summary - This table provides a break out of the agencies billing periods into the three comorbidity categories, none, low, and high.

As a part of the PDGM structure, CMS has established three Comorbidity Levels. Most Payment Periods will not have a comorbidity adjustment; however, a smaller percentage will have either single comorbidity or interactive comorbidity adjustments. It is important to note that an absence of a comorbidity adjustment does not mean that only one diagnosis was coded. Rather, it means that there is no match between any of the secondary diagnoses and those identified by CMS as comorbid conditions based on the primary diagnosis.

This is another area where agencies will be well served to examine the thoroughness of their diagnostic coding efforts. Remember that the Conditions of Participation, implemented in 2018, require that all relevant diagnoses be listed on the claim. Comorbidity adjustments will be calculated based on the listing of secondary diagnoses on the claim without regard to position.