PDGM

Since January 1, 2020, Medicare has paid home health agencies a national, standardized rate for each 30-day period of care, and PDGM decides how that rate is adjusted. Every period falls into one of 432 case-mix groups, built from five things: the admission source (community or institutional), the timing of the period (early or late), a clinical grouping from the principal diagnosis (twelve subgroups), a comorbidity adjustment from the secondary diagnoses (none, low or high), and a functional impairment level (low, medium or high). On the claim, each group is a five-character HIPPS code on the revenue code 0023 line.

Most of those inputs come from data the agency submits before the claim. The functional level comes from the OASIS assessment, the clinical group and comorbidity level come from the diagnoses the agency reports, and Medicare’s grouper calculates the HIPPS code during processing, so an OASIS that is missing or does not match stops the claim. The rest is timing. The agency opens the admission with a notice of admission within five calendar days, bills each period after it ends or at discharge on type of bill 0329, and cannot send that claim until the plan of care and any later verbal orders are signed. A period with fewer visits than its group’s threshold is paid per visit instead, as a low utilization payment adjustment.

The mistake is treating PDGM as a coding exercise done after the period closes. The group is set by the referral source, the timing, the diagnoses and the OASIS, so check all four against the plan of care while the period is still open, and watch which periods sit near their visit threshold before the last visit is scheduled.