As CMS Mulls Site-Neutral Payments, SNF Operators Can Ignore Home Health’s PDGM at Their Own Risk

Just three months after the nursing home world saw a new Medicare payment model take effect, the home health industry dealt with its own sea change: the Patient-Driven Groupings Model.

For most SNFs, the Patient-Driven Payment Model (PDPM) is top of mind, as they work out the new system for their own Medicare reimbursement change. Because it’s a completely different system pertaining to a completely different area of care, it might be easy for them to overlook what’s unfolding with the reimbursement system in the home health care space.

But Bill Goulding, a lead consultant at the Frisco, Texas-based Aegis Therapies, believes that’s a short-sighted approach.


“That sort of blinders-on way of looking at the post-acute care continuum is dangerous, because the regulators and the payers are not looking at it that way,” he told Skilled Nursing News. “They’re clearly moving towards a setting-agnostic payment system. And the patients don’t experience it that way either. It is part of the continuum.”

Two separate systems, similar goals

The Patient-Driven Payment Model for SNFs made the resident condition the primary driver of Medicare reimbursement; under the old Resource Utilization Group, Version 4 (RUG-IV), SNFs were paid based on the level of therapy provided to patients. PDGM is a comprehensive overhaul of case-mix groupings, and like PDPM, it takes aim at therapy — particularly to remove incentives to over-provide such services.

That said, the two payment systems are quite different, as Terri Roberts, director of compliance at Signature Healthcare at Home observed.


“PDPM and PDGM are very different animals; they’re very separate in what they do,” she told SNN. “But they are both looking at patient-driven diagnoses and groupings and outcomes, things like that.”

Signature Healthcare at Home is part of the Avamere Family of Companies, which also includes SNFs and senior living under the Avamere Living company and a therapy group called Infinity Rehab. That full continuum has come in handy, as Signature Healthcare at Home can draw on some of the work of the other entities in the umbrella group.

Some of that work came from therapy, Roberts said: Signature Healthcare at Home has drawn on Infinity Rehab to focus on creating standardized therapy assessments.

“That will hopefully give us some better training and tracking as well as better outcomes for our patients under this model,” she said. “That’s been a big help, I would say — having all these lines of service to be able to share best practices.”

Having the full spectrum of care has allowed those individual entities under the Avamere umbrella to broaden their scope beyond the simply breaking down the payment system, toward quality and outcomes metrics. It’s all with the goal of improving the patient experience by focusing on commonalities such as patient safety issues, wounds or development of infections — which are common to all settings, Roberts noted.

That focus on the patient experience has been a major motivation for Masonicare, which offers a range of senior living services ranging from residential communities to hospice care. The goal has been to ensure that patients don’t feel like they’re being treated in silos, according to Susan Adams, vice president of alliance integration at the Wallingford, Conn.-based operator.

Her job is to work with all the service lines offered by Masonicare, and because preparations for both PDPM and PDGM began almost simultaneously on the SNF and home health side of care, she was able to “toggle between the two and let them know what each other was doing,” she told SNN.

“The most important thing was appropriate coding and understanding how best to describe your patient to the payer sources, as well as to each other,” Adams noted. “So a lot of training was done in both the SNF and in home care and with our OASIS team in home care to make sure that everyone recognized and understood that numerous codes in home care were going away, and if you used them, you would not be paid.”

Ripple effects

For SNFs feeling the pressure on occupancy from increased discharges to home health, the ramifications of PDGM and the concerns about closures of agencies may not seem like pressing concerns. But if home health agencies, particularly those in rural markets, go under, SNFs could face some challenging occupancy numbers, according to Mat Robie, vice president at Aegis Therapies who has helped lead the company’s PDPM implementation efforts.

If the frail patients of home health companies that were financially dependent on Medicaid land on the doorstep of a SNF in a rural market, that patient — almost certainly a lower-acuity, custodial resident — would end up in a SNF bed that might otherwise have gone to a higher-acuity patient, he noted.

The other issue lies with readmissions, especially if SNFs have nowhere to refer patients once they’re ready to go home.

“What’s going to happen to patients downstream?” Robie asked rhetorically. “Because if they get readmitted or go to the ER, [the SNF] is going to get dinged for things like value-based purchasing.”

Another point for the future — one that both SNFs and home health should be considering — is the removal of Section G from the Minimum Data Set (MDS) and its general replacement by Section GG, Goulding told SNN.

The way in which staff record function has changed, and CMS officials will be monitoring operators for compliance — as well as the rate of change and residents’ reported level of function, he said.

“The coin of the realm for measuring functional changes is obviously going to be Section GG,” Goulding said. “Why is that important? Because the record that’s being laid down right now is what will determine how those section GG scores are used.”

That will be true in other practice settings, he predicted, which means that the M scores home health providers currently use to report function are likely to see the same fate as section G.

That means providers on the home health side need to “peek over the fence at their SNF neighbors,” Goulding told SNN.

“I’m convinced that they want to move in a direction to pay for functional change, or at least functional level achieved, to make payments and even placement decisions in a setting-agnostic world,” he said. “And so whether it’s the next iteration of PDPM and PDGM, or moving towards a universal payment system, I think Section GG is going to have a significant say.”

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