The Impact of the Pandemic on the Home Health Patient Driven Groupings Model

May 20, 2021


Last year came roaring in with a lot of change and difficulty. For home health care, the industry was unsettled starting on January 1, 2020, two months before COVID-19. This was due to Medicare (CMS) introducing the Patient-Driven Groupings Model (PDGM) and replacing the Prospective Payment System (PPS) in home health.

PDGM vs. PPS in Home Health

PDGM and PPS were created as a reimbursement system/model for home health agencies to submit to Medicare. Below are the two main differences between PDGM and PPS:

PPS had a combined 60 days clinical and payment episodic period. Agencies received 40% of the episode reimbursement upfront in the form of a RAP and the other 60% after submitting the final claim.

Patient driven groupings model, now with the addition of the No-Pay RAP, is a 60-day clinical episode with two 30-day payment periods. Agencies no longer receive the 40% reimbursement upfront. They will collect the reimbursements after each 30-day payment period once the claim is approved.

Some additional changes due to PDGM in home health are: 

Admission Source and Episode Timing 

Clinical Grouping 

Functional Impairment Level 

Comorbidity Adjustments

I’m sure CMS had multiple reasons for implementing PDGM. One of the reasons was that there were risks that agencies were manipulating therapy utilization as a crutch for higher reimbursement. 

Impacts of the No-Pay RAP 

Most RCM experts have expressed that CMS is trying to match Medicare payments to the Hospice model where claims are submitted once a month, and no pre-payment is provided.  One of the impacts has been a significant change to the revenue cycle; and at least for the first quarter of 2021, a significant reduction in revenue as agencies transitioned to this new program. Although CMS has made it permissible for agencies to submit both RAPs concurrently, EMRs have made that efficiency driving option available.

Agencies have 5 days to submit the RAP. If agencies submit it one day late the penalty is calculated as though they had zero days to submit the RAP.  For example:

An agency has 5 days from the Start of Care (SOC) to submit a RAP. If the SOC was January 1 and the RAP was submitted January 7, which is one day late, the penalty will be calculated for the entire six days since the SOC. Which is 6/30 or a 20% penalty. Few agencies could survive this for long. 

On a more positive note, with the new implementation of the Zero Pay RAP, the pre-requisites for submission are greatly reduced. 

CMS no longer requires completion of the assessment, submission of the OASIS data or transmission of the POC to the physician as a pre-requisite to the submission of the RAP. All that is required is receipt of the initial order and completion of the assessment visit.

If the agency has completed the initial assessment and OASIS data great. Then the RAP can be populated with the correct diagnosis. This of course also facilitates earlier calculation of AR.

If the agency has not completed the initial assessment but needs to turn in the RAP, the agency can put a placeholder diagnosis on the RAP to achieve timely submission. Lastly, CMS allows agencies to transmit both 30-day payment period RAPs at the same time if they choose to enhance efficiency.

Agencies need to feel confident in their software’s ability to work for and with them, especially when it comes to the five-day submission period for the No-Pay RAP.

KanTime and the No-Pay RAP 

Having software that works for you helps relieve the unnecessary stress of remembering when the five days are up.

KanTime has many efficiencies. Below are four examples of how KanTime helps your agency with PDGM and the No-Pay RAP in home health:

As many consultant experts have recommended, KanTime has dashboard alerts that notify the agency in real-time of the aging status of all available RAPs.

Alerts include 5 days, 4 days, 3 days, 2 days, 1 day, as well as those that are due today. In addition, should you have them with KanTime, those that are overdue. These features bring the needed level of clarity to users and management to ensure that these requirements are met and penalties are avoided.

As permitted by CMS, if the assessment hasn’t been completed a placeholder diagnosis can be submitted with the RAP, and KanTime will auto-populate that for your agency based on the status of the assessment at RAP submission.

CMS has allowed for agencies to submit both RAPs for the 60-day clinical period simultaneously. KanTime can be configured to always submit both at the same time or to require user intervention to determine whether both should be submitted simultaneously. Most software it seems has not made this available to their users. 

PDGM came crashing into 2020 like a bulldozer demolishing a building. Agencies are still trying to figure out the new rules and adjustments to the No-Pay RAP deadlines. With KanTime, agencies don’t need to stress about the new regulations and can focus on what matters: quality patient care. 

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