Home health operators wondering how therapy utilization will change following the Jan. 1 implementation of the Patient-Driven Groupings Model (PDGM) need only look to their post-acute care brethren for answers.

The beginning of October marked the official start of the Patient-Driven Payment Model (PDPM), another major payment overhaul from the Centers for Medicare & Medicaid Services (CMS) for skilled nursing facilities (SNFs). Similar to the upcoming home health model, PDPM is a departure from the previous SNF payment structure, specifically in that it more closely ties therapy reimbursement to the complexity of nursing home patients’ needs rather than the volume of services delivered.

In the days and months leading up to PDPM, many SNF stockholders projected there would be a drop in therapy utilization.

The same kind of chatter has been happening in the home health world preceding PDGM as well.

So far, in the first 16 days of PDPM, the drop in SNF therapy utilization appears to be more of a reckless leap off a cliff than a cautious step down a ladder. Thousands of physical, occupational and speech therapists have reportedly been laid off by their skilled nursing employers, with one of the nation’s top operators alone responsible for the layoffs of about 585 rehab employees.

“That broke pretty quickly after the implementation date of Oct. 1, though there were rumors of that happening in the period leading up to that date,” Cindy Krafft, president of consulting firm Kornetti & Krafft Health Care Solutions, told Home Health Care News. “Unfortunately, I can’t say that I’m shocked — and I don’t necessarily believe that CMS is either.”

If nothing changes, the SNF-related therapy layoffs are surely a precursor to what the home health industry will see in the wake of PDGM.

A June survey compiled by the National Association for Home Care & Hospice found that nearly half of home health providers anticipate decreasing therapy utilization in 2020 because of PDGM. The survey included responses from nearly 700 providers across the U.S., the majority of which were freestanding agencies.

“If we saw utilization change on a dime for PDPM, wee could see that happen in January for home health,” said Krafft, a physical therapy by training.

The therapy conundrum

In general, CMS says it’s changing how therapy services are paid for in the home health and SNF spaces as a way to combat fraud, waste and abuse, all while putting patients at the center of their care plans.

Federal watchdogs have frequently gone after providers accused of billing Medicare for unnecessary therapy visits, and the Medicare Payment Advisory Commission (MedPAC) has repeatedly flagged overutilization as a post-acute care concern for years. Historically, home health’s reliance on therapy coincides with the shift from the old nursing-centric payment system to the current therapy-centric Prospective Payment System (PPS).

Overall, the mix of services changed from predominantly aide services in 1997 to predominantly nursing visits in 2000, MedPAC data shows. With PPS, therapy visits increased between 1997 and 2016 — from 10% of visits to 39%.

“We … recommend, as we have for the last six years, that Medicare eliminate the use of the number of therapy visits as a payment factor in the home health PPS concurrent with rebasing,” MedPAC officials wrote in a 2018 report. “A review of utilization trends and further research by the Commission and others suggest that this aspect of the PPS creates financial incentives that distract agencies from focusing on patient characteristics when setting plans of care.”

There are similar concerns with SNFs, particularly when it comes to the “ultra-high” therapy visit Resource Utilization Group (RUG), Krafft said.

“There was concern for years about what policymakers felt was an overuse of the ‘ultra-high’ payment category, the ultra-high therapy RUG category,” Krafft said. “I think an abrupt drop in that speaks volumes about whether this was truly medically necessary — or an operational plan to maximize therapy minutes.”

As part of its business, Krafft & Kornetti provides revenue protection strategies for home health agencies through auditing, data. Analysis, education, mentorship and clinical management strategies focused on patient-centered care.

Overwhelmingly, documentation reviewed by Krafft & Kornetti does not support the amount of therapy services delivered by home health agencies, according to Krafft. In fact, only 50% to 75% of it is typically defensible, she estimated.

A word of caution

Kennett Square, Pennsylvania-based SNF operator Genesis HealthCare (NYSE: GEN) confirmed to HHCN sister site Skilled Nursing News that the company cut just under 6% of its 10,000 rehab-focused workforce following PDPM.

Moving forward, blunt layoffs probably aren’t the answer for SNF or home health providers hoping to stay afloat in a new Medicare reimbursement climate, but not all adjustments should be automatically viewed as negative.

“The battle cry [from therapists] is that patients will suffer,” said Krafft, who spent “a very brief stint” in the skilled nursing setting. “But I’ve had families in skilled nursing facilities pushed into ultra-high when it was ragingly inappropriate to do so. I had to fight the facility to provide less therapy because [the person] didn’t need it. It was hurting him, not helping him.”

Additionally, home health agencies contemplating therapy cuts should remember that CMS is paying close attention.

“PDGM is benchmarked against the average utilization of therapy in 2017, so If 2020 marks a significant departure from that, it’s going to be pretty darn clear what the triggering event was,” Krafft said. “If we have major cuts, it’s not like half of the therapists quit and joined the circus — it could only be the payment methodology.”

Today, home health agencies also have to keep an eye on Home Health Compare, quality of services and patient satisfaction.

Agencies “trimming the fat” in their therapy plans won’t know the ultimate quality impact for months, however. By then, the pendulum could start swinging in the other direction.

“The downstream of that hitting Home Health Compare will probably be where they’re going to have to come back to some sort of reasonableness in their therapy strategies,” Krafft said. “Unfortunately, we have to deal with a time delay.”

The post PDPM Aftermath Offers Glimpse of Home Health Therapy Changes to Come appeared first on Home Health Care News.