PDGM Fix Introduced, Advocacy Needed

Last week, a bipartisan group of senators, led by Sen Susan Collins (R-ME)  introduced what will be a most important legislative priority for HCA of MA this year.  Senate bill (S.433) will curtail the so-called $1 billion “behavioral adjustment” cut under the Patient Driven Groupings Model (PDGM) to which all of home health is transitioning in 2020.  Among, many other changes, PDGM will move home health from a 60 to a 30 day payment unit. This is the most significant change to home health payment since the Prospective Payment System was introduced in 2000.

The Congressional action that called for a home health payment overhaul required that the new payment model be budget neutral against current spending levels. However,  the legislation also allowed that CMS to consider “behavioral  adjustments” defined as industry actions that would be taken to increase payment under the new model, unrelated to patient case mix changes. CMS has used this authority very broadly to institute a payment adjustment in the first year of PDGM based on “assumptions” of behavioral changes, and that adjustment calls for a 6.42% base rate reduction, or a possible $1b reduction in payments.

S 433 would prohibit CMS from making any pre-rate change reductions based on assumptions and instead to phase in any adjustments (either up or down) based on observed evidence (i.e., data supported) changes in provider behavior. The objective would be to achieve budget neutrality by 2029. This later piece addresses concerns the Congressional Budget Office (CBO) expressed regarding whether a similar bill introduced last session was truly budget neutral. S.433 also would allow Medicare advantage plans and Center for Medicare and Medicaid Innovations (CMMI) to waive the “confined to home”  provision when in the best interest of a Medicare beneficiary.

Regardless of the “behavioral adjustments,” the PDGM model is expected to have a tremendously varied impact state by state and agency by agency.  A significant amount of this impact is related to a Congressional  requirement that the payment model no longer use the volume of therapy as a payment level determinant.  (Something MEDPAC has been calling on CMS to do for years.)   The state of Florida, where therapy visits average 10.45 per episode of care is set to “lose” the most – projected at $141 million.  California on the other hand, where the average therapy utilization per episode was 5.76,  will be the largest gainer.  MA (need numbers from Tim)  Note: S 433 does not seek to make changes to the structure of the payment model that produces these changes.

It is important to reflect on CMS’ proposal in 2017, Home Health Groupings Model (HHGM) and how we arrived to where we are today. At the time, HHGM represented similar changes to the payment model, without soliciting industry feedback and some estimates predicting a 15% reduction in payments. As a result, the industry unified itself behind one message: that CMS withdraw its proposal and engage stakeholders to come up with an alternative. Upwards of 13,000 emails were sent to Congress from the industry, 49 members of the U.S. Senate and almost 160 members of the U.S. House of Representatives signed onto letters to CMS echoing the request to withdraw HHGM. This was a remarkable show of mobilization by the industry and we’ll need it again to make modifications to PDGM.

At present there is no bill in the House, but it is expected that one will be forthcoming.  Strong early sign on support is critical to keeping this bill moving and HCA of MA will be urging members to contact the MA delegation to support S.433 and the companion house legislation to be introduced. Stay tuned for these advocacy alerts in our weekly newsletter and advocacy messages in the coming weeks.

HCA will also be hosting a number of member events to prepare for the payment transition.  While the full day PDGM programs in March in Northampton are sold out, there will be a high concentration of sessions on PDGM at the New England Home Care Conference and Trade Show in on June 5 -7 inn Falmouth. Watch here for more details.

In the meantime, send a message here to Senators Warren and Markey about the need for their support on this issue. 

Let’s do this home care – we cannot sustain $1 billion in cuts based on assumptions, not facts!

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