Being Prepared for PDGM: Part Two – Billing and Reimbursement

As discussed in our previous post; the Patient Driven Groupings Model (PDGM) is going to introduce home health agencies to new scrutiny and completely change the way your agency operates.

The current method of billing a RAP and final/end of episode claim will not change for existing agencies under PDGM. The 30-day episode will simply be a payment based on 15 days of care.  The final claim will be at the end of the episode as it now. However, new agencies that are certified after January 1, 2019 will need to wait. CMS has decided, without much detail, that new agencies going forward will not be paid for RAPs, only a complete claim.

LUPAs, everyone’s favorite thorn in the side will be continuing to be present under the new model. Partial Episode Payments and Outliers will also be factors in the PDGM. However, LUPAs become much more complex and the methodology is still being processed by CMS.

Supplies going forward will not qualify for any additional reimbursement. Agencies will receive reimbursement based on characteristics and no additional outliers for supplies will be paid.  This means the very expensive wound care patients are going to need to be properly identified by their characteristics to maximize reimbursement and reduce the burden of purchasing wound care supplies on the agency.

The PDGM is going to be quite interesting and difficult for some agencies to grasp. However, we plan on including more information each month going forward so that you and your staff are well-equipped to deal with the changes.  When PPS was first introduced, agencies thought it was going to be the end of the world. In fact, agencies prospered and began making very large sums, but with this came many of the issues that agencies face today.

Increased scrutiny, over compliance, pre-claim review and basically baby sitting from CMS was introduced. Some of these tactics have been needed to weed out some bad players, but for the most part, many agencies are providing ethical and often lifesaving care. Some agencies will close, some will merge, some will come out better than ever. If you are curious about how your agency may fair under the PDGM, please send us an email or call our office.  We have initial data available from CMS that is going to pinpoint, based on 2017 reimbursement, whether or not your agency is projected to do well or poorly in 2020.

—What are your thoughts and concerns about PDGM?  Share them with us by sending an email to We will review the messages and work them into our future publications and articles on PDGM.