Medicare Changes to Home Health Reimbursement

What you need to know

Set to go into effect January 1, 2020, the Patient-Driven Groupings Model (PDGM) is the largest change to the home health reimbursement system in 20 years. It will overhaul how Medicare pays for home health.

PDGM was developed to better align home health reimbursement with patient care needs.

This reimbursement method relies heavily on clinical characteristics and other patient information to create the claim.

PDGM provides an assurance that the clinically complex patient will receive adequate home health care.

How will PDGM affect my as a provider?

• PDGM implementation forces a shift from a 60-day billing cycle to a 30-day home health claim period.
• Signed physician orders will need to be returned to the home health agency much faster to accommodate the shorter turnaround time under PDGM.
• Incoming home health referrals, initial orders and interim orders will require more detailed patient information to successfully develop a home health claim.
• CMS will require an admission source be assigned to each home health patient indicating where they were in the
• 14 days prior to admission. PDGM has identified two admission source categories: Community and Institutional.
• Hospitalizations, ER visits, hospital holds and observation status will impact the home health episode.
• All facility stays at an acute care or sub-acute care facility will need to be communicated to the home care agency.
• PDGM implementation will require a modification to the coding of each claim.
• Primary and secondary diagnoses must align with the focus of home care and will require significant specificity.

What Diagnoses are required for an INITIAL REFERRAL and to develop each PLAN OF CARE?

• All diagnoses are to be reported if they are conditions that affect the patient in terms of requiring clinical evaluation; or therapeutic treatment; or diagnostic procedures; or extended length of hospital stay; or increased nursing care and/or monitoring.
• Any diagnosis that will affect the patient’s responsiveness to treatment and rehabilitative prognosis, even if the condition is not the focus of any home health treatment itself.
• Primary diagnosis, once coded, will be the focus of home care and must align with the Face-to-Face.
• Causation and/or etiology are mandatory.
• Each diagnosis must include laterality and specificity.
• Diagnoses may or may not be related to a recent hospital stay.
• Symptom codes are invalid; instead use the underlying etiology (unless the underlying etiology is unknown).

Additional diagnosis requirements:

• All Wounds must specify the underlying etiology and anatomically correct location.
• Osteoarthritis needs location, i.e.; Osteoarthritis to Lumbar Spine
• Infections need location and specificity, i.e.; Pseudomonas of The Right Posterior Leg Wound.
• Neoplasms can’t be unspecified location, i.e.; Adenocarcinoma of Right Lung, Lower Lobe
• Pain is not a valid primary, need underlying cause of pain, i.e.; L4 Herniated Disc
• Fracture: Specific location and type, i.e.; Left Femoral Spiral Fracture
• Osteomyelitis: Location needed, i.e.; Osteomyelitis of Right Ulnar
• Hemiplegia: laterality, i.e. CVA with Right Sided Hemiplegia
• Injury: Location needed, i.e.; Laceration to Right Eyebrow/Orbital
• Burns: Location needed, i.e.; Third Degree Burns to Right Hand and Left Anterior Forearm

What diagnoses will no longer be acceptable under the PDGM model?

Generalized, unspecified symptom codes are no longer acceptable and will no longer qualify a patient for home care services. Instead report the underlying etiology/causation. Examples are:

• Muscle Weakness
• Abnormalities Of Gait And Mobility
• Repeated Falls
• Syncope
• Retention Of Urine
• Dysphagia
• Wound Right Leg

Additional documentation requirements:

PDGM implementation requires that each diagnosis included on the home health claim be validated or substantiated in writing with supporting documentation. A great deal of information can be obtained in the electronic health record. Each home health referral must include supportive documentation and information to support the required care. Examples are:

• History & Physical.
• Operative Reports.
• All Facility Stays.
• All Related Co-Morbidities

Home Health Services

Hackensack Meridian Health At Home
Monmouth and Ocean Counties.
1-800-655-2555

Hackensack Meridian Health JFK At Home
Union, Somerset, and Middlesex Counties.
1-800-401-9212

Visiting Health Services of New Jersey
Passaic, Bergen, and parts of Morris counties.
1-844-777-0711