PDGM & COVID-19 Can Bring New Opportunities

It’s now been about nine months since the Centers for Medicare & Medicaid Services (CMS) required a new payment model for home health care, representing the largest change to the payment model in decades.

The new Patient Driven Groupings Model (PDGM) affects tens of thousands of agencies that provide therapy for millions of home health and hospice patients, and a great deal rides on the success of its implementation. For many, implementation has been more difficult than expected—but the process has uncovered valuable lessons and even potential opportunities for achieving greater business success and demonstrating home health’s value across the broader ecosystem.

PDGM was mandated in the 2016 Cures Act and became a reality for agencies Jan. 1, 2020. Let’s take a look at a few lessons we’ve learned since that happened—and some tools to help agencies moving forward.

1. Referral Intake

The No. 1 PDGM implementation issue for agencies I’ve spoken with is referral intake. Getting intake right is a tall order in a short amount of time. With many people working from home due to the COVID-19 pandemic, it’s harder than ever to reach referral sources. Furloughs and layoffs at a wide range of employers mean there’s a risk that any patient’s eligibility could  change significantly. Payers and coding requirements may also be changing in real time, which is a lot to stay on top of from an operations standpoint.

To be successful, referral intake has to be appropriate and accurate. That requires getting the primary diagnosis, payer information and eligibility right from the start. Otherwise everything else downstream in the process is put at risk. This became even more critical as organizations implemented solutions to comply with PDGM.

2. Order Management

Order management has long been a concern in this industry and it’s where many focused when it came time to prepare for PDGM. A major issue in the home health care industry is a need to rely on partners that aren’t always aligned, resulting in a dependency that’s hard to control. To compensate, providers must continue to adhere to and own a strong process to keep everything moving in the right direction and on time.

For instance, who is the one person in your organization whom you seek out to get a follow-up status? That person must be predefined and all team members should clearly understand their part of the process. And there must be a process. This is an area where a lot of organizations are still working out the details with PDGM.

3. Claim Management

The keys to success in claim management are frequency and followup. We recommend that organizations submit reimbursement claims as often as possible—daily if possible—to promote faster cash flow. Establishing a regular cadence of communication via email, Slack, a daily meeting, or a reports package helps keep teams accountable and aligned. New reporting requirements from PDGM make this level of communication more critical than ever.

4. KPI Tracking & Measurement

Moving to PDGM is a massive undertaking with many intricate details that touch all corners of a business. While it’s important to keep track of each one, organizations also need a broader set of metrics to monitor performance. Key performance indicators (KPIs) are a great way to track a team’s progress and identify any roadblocks.

A good place to start is with three to five KPIs that are core to a provider’s business, such as days to claim, days sales outstanding, accounts receivable by payer, write-offs and/or coding review. Having current, easy-to-read data on any of these metrics is important, particularly when transitioning to a new payment system. Once there’s strong cadence around a core set of KPIs, providers can build on them for a fuller picture.

5. Strong Change Management

PDGM represents a major shift in how providers do business, calling for a strong change management program to help drive success. Change management was considered a luxury in the past; now it’s almost a requirement with the upheaval and rate of change we’re experiencing in health care. A successful program requires two things: communication and collaboration.

Communication needs to involve everyone in an organization, from the executive team to the staff on the front line to direct and indirect stakeholders. To reach these groups effectively, a clear and concise message is key. It’s important to ensure that everyone knows what the problems are, what you’re doing to address them and what the timeline is for a solution.

Collaboration is critical as well, because now, more than ever, the success of an agency is dependent on all parts of the ecosystem. Collaborating with other agencies, regulatory groups, technology companies and other outside resources emerging in health care is becoming the norm and a key to long-term success.

PDGM & COVID-19

With the COVID-19 pandemic added to the mix, the industry is facing change from all sides, resulting in a constant balancing act. In addition to key policy and regulatory events, we’ve seen PDGM’s intersection with COVID-19 accelerate several technology trends—especially telehealth.

Telehealth has been on the scene for more than 15 years but has suffered from a number of adoption challenges, including long-standing complexities around reimbursement. The pandemic has forced the industry to reprioritize telehealth and adoption is rising dramatically as a result. According to MarketWatch, virtual doctor visits were up 50% in March, while research and consulting firm Frost & Sullivan expects demand for telehealth to soar by nearly 65% in the U.S. this year alone.

It’s clear telehealth presents an incredible opportunity for the industry to maintain business continuity, but also to reach patients on their own terms and remain competitive. With all 50 states now accepting telehealth at some level, it’s a good time to explore new opportunities in this space as it continues to quickly grow.

Another shift is around payer management and the chance for providers to explore new opportunities with payers. This could mean exploring risk-based contracts or leveraging telehealth to deliver services on a per-member/per-month basis.

Importantly, we’re also seeing home health shift away from being solely a post-acute care service to taking on pre-acute and even acute care, as hospital-level services are increasingly delivered in the home. This presents a powerful opportunity for the industry to demonstrate its value across the health care ecosystem.

Without question, PDGM and its intersection with COVID-19 has presented a significant challenge for the home health and hospice industries. However, it’s rare that a big change does not also bring big opportunities. The industry is off to a strong start and as soon as 2021, we’ll start to see significant benefits from the hard work put in leading up to PDGM and throughout this year.