Understanding the Patient Driven Groupings Model (PDGM)

Change has been occurring left and right over the past year and a half, especially in the post-acute care industry. The most recent is the Patient-Driven Groupings Model (PDGM), having changed their RAP adjustments three times over the past years.

While juggling all these changes, post-acute care agencies need not worry as we go through the different RAP adjustments CMS has changed, billing and coding, and LUPAs for PDGM.

The Different Stages of RAP Adjustments from 2020 – 2022


Before January 2021, home health agencies would send Medicare a Request for Anticipated Payment or a RAP. Once Medicare receives the RAP, they would review it and send a percentage of the agency’s reimbursement for a 60-day period of care.

Once the care period was complete, the agency would send the final claim to Medicare to collect the rest of the reimbursement. The reimbursement would be based on Medicare’s calculation of the final claim.

No-Pay RAP

After January 2021, the Center for Medicare and Medicaid (CMS) revised PDGM and implemented the No-Pay RAP.

With the No-Pay RAP, CMS did away with the partial reimbursement and split the 60-day episode of care into two 30-day payment periods. Agencies are required to complete and submit a No-Pay RAP every 30 days during the 60-day episode of care.

Notice of Admission (NOA)

Starting on January 2022, CMS will be implementing the Notice of Admission or NOA. The NOA is like the Notice of Election (NOE) for Hospice Care. It will only be required at the Start of Care (SOC) for a patient.

CMS wants to bring home health and hospice care closer together, making it easier for billing and continuous process across the two primary post-acute types.

Why Effective Coding Practices for PDGM are Important

Effective coding practice for the Patient-Driven Groupings Model is essential for every agency. The ICD-10 codes were created to help identify disease processes and determine how much the agency receives when submitting for reimbursement.

Agencies need to make sure they have established effective coding practices with their caregivers when creating the SOC. If codes are inaccurate or misread, patients could be misdiagnosed, thus leading to Medicare potentially not reimbursing correctly.

Agencies won’t have to worry about codes being inactive or incorrect as the codes would be updated every time CMS has a yearly update, as well as making sure caregivers are as detailed as possible when inputting codes into the SOC and color-coding the codes in the system to let users know which codes are active or inactive.

The Transition from Two 30-Day Payment Periods to Only One Submission  

As stated previously, at the beginning of 2021, agencies had to switch from receiving a percentage of their reimbursement upfront to submitting two No-Pay RAPs every 30 days during a 60-day episode of care. Starting in 2022, home health agencies must submit an NOA at the start of care and won’t have to submit an NOA again until the 60-day episode of care is over. Like the No-Pay RAP, the NOA must be submitted five days after the SOC. If the NOA is submitted a day after or later, agencies will lose 1/30th of their reimbursement for every day they are late. Agencies must submit the NOA as soon as they can.

How LUPAs Work in the Patient-Driven Groupings Model

What is a LUPA?

LUPA stands for Low Utilization Payment Adjustment. Home Health agencies receive a LUPA when a patient has four or fewer scheduled visits in a 60-day episode of care. Last year, CMS predicated the LUPA rate on being at 7 percent. However, it was recorded at 8.9 percent.

If an agency receives a LUPA for one of their patients, they will receive a per-visit payment from CMS instead of a 60-day period episode payment.

Having an EMR that can track, monitor, and adjust anticipated payments. It can help agencies focus more time on their patients rather than worrying about what happened to the LUPA once it was submitted.

Regarding LUPAs for PDGM

Recently, clinical groupings have been factored into LUPA claims, and CMS has decided to let “Occupational therapy conduct initial and comprehensive assessments for all Medicare beneficiaries under the home health benefit when the POC doesn’t initially include skilled nursing care but includes either physical therapy or speech-language pathology.”

Due to this assessment, CMS will use the LUPA add-on factor for physical therapy until the data collected for 2022 is available to calculate a more precise occupational therapy add-on for LUPAs.

Handling PDGM Changes with Ease

Home health agencies need an EMR to help transition from No-Pay RAPs to NOAs, especially during the first few months. There can be an expected overlap of RAPs and NOA and adjusting to only the NOA. They should also track when the submission is due after the SOC. For example, five days, four days, three days, two days, one day, due, and overdue so users can track when they need to send the NOA in.

With the right EMR, your agency can handle all of these changes with a breeze and focus on what matters: the patients.

KanTime’s enterprise-based solution allows agencies to have peace of mind when new regulatory changes happen, like the Patient-Driven Groupings Model. Agencies can focus on the patient and let KanTime work for them by tracking LUPAs, configuring an effective coding strategy in the system, reminding users of when the NOA/No-Pay RAP is due, and more.

Schedule a custom demo to learn how our EMR can help your agency handle regulatory changes easily.