PDGM Under Scrutiny From MedPAC

WASHINGTON, D.C. (September 24, 2021)—The Medicare Payment Advisory Commission (MedPAC) met to discuss the development of a mandated report assessing the impact of the shift to the Patient Driven Groupings Model (PDGM) payment model for Medicare home health, and in particular the 30-day episode and the removal of therapy utilization in payment determinations.

According to MedPAC staff, the ongoing COVID-19 pandemic has made it difficult to assess structural changes, as patient volume saw significant swings from March through May, though the number of providers remained consistent—likely the result of various financial supports put in place to help stabilize businesses and the economy overall in the early days of the public health emergency. Despite the challenges with data analysis, MedPAC still found the base payment to be 34% higher than costs in 2020.

Anecdotally, it is thought that the initial drop in patient volume was later offset by an increase driven by patient desire to avoid congregate settings. MedPAC data demonstrates an overall utilization decline of 11%, and a 7% decline in in the number of 30-day periods of care. Additionally, the number of in-person visits was also down approximately 20%. MedPAC staff were not sure if this drop is attributable to a decrease in therapy utilization or if care was instead being delivered via telehealth in accordance with flexibilities granted by the Centers for Medicare & Medicaid Services last year.

In the discussion following the staff presentation several commissioners lamented the lacking telehealth data available with some suggesting such information should be a required submission by providers. The commissioners also voiced frustration with the base payments coming in at 34% above costs, suggesting that the PDGM model was moving in the wrong direction of encouraging high-value care.

This report was mandated by Congress in the Bipartisan Budget Act of 2018, the same legislation that mandated a shift to a 30-day payment episode and removal of therapy utilization in payment determinations.

MedPAC has a deadline of March 15, 2022 to submit initial findings to the Congress.

Originally posted in the NAHC report, the daily newsletter for the National Association of Home Care & Hospice. Visit nahc.org for more information.