Sweeping Medicare and Medicaid regulatory changes have recently impacted home health agencies and skilled nursing facilities. Due to CMS payment model changes, home health and hospice agencies adapting to the Review Choice Demonstration (RCD) project have been burdened with also adapting to imminent changes under the Patient-Driven Groupings Model (PDGM).
Consequent to National Association for Home Care and Hospice (NAHC) objections, the CMS reversed its decision to “roll-out” the RCD on its planned time-table. The PDGM start-date is January 1, 2020, but one state included in the RCD project had been scheduled for an RCD start-date of December 2, 2019.
The following describes both the PDGM and RCD project. Additionally described is how adherence to both RCD and PDGM regulations is likely to affect home health agencies operating in RCD-affected states, as well as which states are included in the RCD project.
Overview of RCD Project and Specific States Affected
The RCD project is based on the former Pre-Claim Review Demonstration (PCRD) project, and was scheduled for commencement in five states (with expectation by the CMS of subsequent expansion to all states). One of the key differences between the PCRD and RCD is that agencies under the RCD may choose a 100 percent post-payment review option.
Similar to the PCRD, home health and hospice agencies can choose to “opt out” from submitting claims for pre-claim or post-payment review. However, a penalty of a 25 percent payment reduction would be applied under the RCD to any agency choosing to “opt out” of this review.
While Illinois and Ohio were required to adhere to RCD regulations in 2019, this change has not yet occurred in the other three selected states. These three states are Texas, North Carolina, and Florida. Notably, Texas is now scheduled for a RCD start-date of March 2, 2020, while the other two states’ launch-dates are for later in 2020.
A focus on accurate documentation underpins the RCD project, while a shift to a value-based (as opposed to a fee-for-service [FFS]) payment model underpins the PDGM. For both the RCD project and PDGM, documentation of the following is essential:
- Completed and successfully transmitted OASIS assessment;
- Compliant Face-to-Face (F2F) certification;
- Signed and dated orders by the referring medical provider;
- Signed and dated home health care agency Plan of Care (PoC)
While other required documentation is also crucial, these are the four different types of documentation that – when overlooked by home health agency administrative staff – are most linked to the necessity for re-submitting Medicare claims due to a preventable error.
Brief Overview of the Patient-Driven Groupings Model (PDGM)
An article in HomeCare Magazine describes one of the key changes under the PDGM as the elimination of the current payment model’s bundled payment for all services within a 60-day episode of care. This will be replaced under the PDGM by 30-day care periods as the basis for payment. However, adapting to the new case-mix model under the PDGM will require considerable staff re-training and adjustment, as this will impact a client’s Home Health Resource Group (HHRG) – and then impact payment for services rendered to the client.
As noted in Home Healthcare News, cash-flow is likely to be an issue for home health and hospice agencies during the first 2-3 years of the PDGM. Moreover, small-sized home health agencies are at highest risk of a cash-flow problem threatening financial viability.
How Will the PDGM Affect States Selected for RCD Project?
Around 77 percent of home health agencies in Illinois are opting for pre-claim review under the RCD, according to the Texas Association for Home Care and Hospice (TAHCH). The TAHCH also reported a CMS-predicted $24 Million in extra administrative costs for the five states required to adapt to the RCD project’s requirements.
Meanwhile, another article in Home Healthcare News (on June 2, 2019) suggested that home health and hospice agencies should expect at least a 12 percent reduction in cash-flow in January 2020 (and at least a 20 percent reduction in cash-flow in February 2020). Overall, states affected by the RCD project are likely to incur a far higher risk of decreased cash-flow than states not dually-impacted by the PDGM and RCD project. In turn, this can make closures of small home health and hospice agencies more likely in the RCD-impacted states than in other states.
Why an Electronic Health Record (EHR) System is Imperative
According to the US Office of the National Coordinator for Health Information Technology (ONCHIT) in 2017, 78 percent of home health care agencies utilized an EHR system, but only 36 percent had the interoperable capability to electronically-integrate patient health information received from other types of healthcare entities (such as rehab facilities). While this compared favorably with ONCHIT data obtained for skilled nursing facilities (SNFs), a potential issue for home health care agencies is that SNF referrals are fairly common.
A conference presentation of the Kansas Home Care and Hospice Association recommended acquiring an understanding of whether the current EHR system at a home health agency can “capture” specific PDGM aspects – such as a client’s institutional (versus community) discharge status, along with documentation of “early” or “late” referral status. Moreover, diagnostic ICD-10 coding under the PDGM requires knowledge of ICD-10 codes that are no longer acceptable under the PDGM.
Physical therapists are most likely to have never utilized an EHR system (per the American Physical Therapy Association). Since home-based physical therapy is often provided by home health agencies to clients discharged following hospital-based surgeries, ensuring that physical therapists employed by home health agencies are trained to use EHRs is vital. In addition to the necessity of a well-functioning EHR system is home health agency employees’ knowledge of the proper way to utilize that system.
Preparing for the Financial Ramifications of the RCD Project and/or PDGM
The aforementioned conference presentation of the the Kansas Home Care and Hospice Association suggested that it is important for home health and hospice agencies to analyze claims data in advance of the PDGM to anticipate its financial impact. This presentation also suggested that an operational analysis within a home health agency in advance of the PDGM be conducted to elucidate the following:
- Current operational structure;
- Current processes;
- Current work-flows;
- Report-generation capability
A home health agency’s EMR capability may also provide a sense of whether the more rapid claims submission process required for receipt of timely Medicare reimbursement under the PDGM is actually possible for that home health agency – or whether a more robust EMR capability is needed.
The costs involved in preparing for the PDGM (especially if your state will be impacted by the RCP Project in 2020) may be high. However, this financial expenditure is an investment in ensuring that your home health agency can survive under the requirements imposed by these CMS payment models.
If you need assistance in preparing for the RCD project and/or PDGM, Liberty Consulting and Management Services is a provider of billing and financial services to home health and hospice agencies.