Home health providers should brace themselves for a potential Patient-Driven Groupings Model (PDGM) battle with the U.S. Centers for Medicare & Medicaid Services (CMS) later this year.

Implemented on Jan. 1, 2020, PDGM is the largest overhaul to how Medicare-certified home health agencies are paid in two decades. And normally when CMS implements something of this magnitude, there are ongoing tweaks and changes to make sure reimbursement is fair to both the government and providers.

That balancing act is even more important with PDGM, which must be budget neutral, as mandated by Congress.

Yet because of the COVID-19 pandemic, any major recalibrations or corrections to PDGM’s foundation have, so far, been delayed, according to National Association for Home Care & Hospice (NAHC) President William A. Dombi. That could begin to change later in 2022, when CMS is gearing up to release its proposed payment rule for 2023.

“We’ve been having those conversations for three years,” Dombi told Home Health Care News during an interview at the Capital+Strategy conference. “We had those conversations before PDGM was put into the law because we knew, going down the pike, you’re going to be seeing what we’re facing from a Medicare home health priority perspective.”

Typically, CMS releases its proposed payment rule in late June or early July. With two years of PDGM observations and the public health emergency starting to wane, the agency may float big adjustments at that time.

“The concept [of budget neutrality] is a lot easier to state than it is to apply,” Dombi said. “The application of it, right now, has been … kicked down the road for a couple of years with the explanation being, ‘The data is not yet sufficient for us to make the judgment on it.’ The data will be sufficient for 2023.”

Now, Dombi said, CMS will be determining what the methodology is for determining whether the budget has been neutral or not.

One of the biggest areas of PDGM that has been in the spotlight is in regard to therapy.

Going into 2020, nearly half of home health agencies planned to decrease therapy utilization, according to a mid-2019 survey conducted by NAHC ahead of PDGM implementation.

But COVID-19 threw a wrench in every agency’s plans. Experts warned that decreasing therapy recklessly would be potentially dangerous for patient outcomes.

While it’s likely true that PDGM did have some influence on therapy utilization, finding out how much is nearly unquantifiable.

“There was a precipitous drop in therapy visits in January and February of 2020 before the pandemic hit,” Dombi said. “We look at that and we say, ‘If you’re going to examine causation, that’s a pretty moving set of data for those two months before the pandemic set in.’”

Before the public health emergency, there was a wariness attached to scheduling therapy visits because of the onset of PDGM. But after it, there was a shift in thinking, according to experts.

Providers quickly went from questioning the frequency of therapy visits to going back to giving the therapist control of determining frequency due to COVID-19.

“Correlation and causation are two separate things,” Dombi said. “[CMS] can only do a clawback — or are only obligated to pay extra money — if the cause of the non-budget neutral outcome was the new payment model. [It’s their job] to figure out whether the reductions in therapy visits in 2020 were caused by COVID and patient reluctance to let people into the home, versus caused by the fact that the level of reimbursement for patients receiving therapy went down.”

In the past, CMS has already suggested PDGM isn’t budget neutral and is over-paying home health providers. Following 2020, CMS concluded that 2020 base payments were set 6% higher than they should have been.

Industry data has suggested otherwise, however.

A report from The Partnership for Quality Home Healthcare (PQHH) in September — based on Dobson Davanzo & Associates’ findings — argued that the notion of payments being 6% higher than they should have been was “fundamentally flawed.”

“CMS’ methodology that compares aggregate payments under both the [PDGM] and the prior 60-day system using CY 2020 data is inherently flawed — under the 60-day system case-mix and payments are largely driven by therapy visits especially when a high number of therapy visits are present,” PQHH’s report read.

Home health providers should be on the lookout for any major changes that come from CMS this summer.

“The 2023 payment rule should be out by late June or early August,” Dombi said. “There’s a window of opportunity. Typically, CMS has done it either on the last Friday of June up to the second Friday of August. Very helpful in planning for summer vacations.”

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