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Florida's PDGM Episodes: Post-Acute vs Community? Let’s Peruse YOUR Agency Data!

Wednesday, May 29, 2019   (0 Comments)

By Duane Blackwell, National Home Health Analytics

So, this Patient-Driven Groupings Model (PDGM) thing is getting real! Before you know it, the fat man will have come and gone (having flown right over my house), we’ll have toasted the new year (and perhaps gotten a bit “toasted” in the process), and then… ???  (Well, you fill in the blank.) I promise your guess is as good as mine as to what the Florida home health landscape will look like after the dust settles beginning January 1, 2020. That said, there are a few telltale data clues about what we might expect in Florida from that new-fangled payment scheme. Please keep reading, because I’m going to offer to give you some free and fabulous agency-specific data before we’re done here today.

Some PDGM Basics

We all know that there are 432 distinct payment buckets into which a patient can land under PDGM. And, we know that those 432 buckets are claims driven – therapy doesn’t drive reimbursement anymore (and that’s a good thing).

We also know that PDGM takes a sort of “decision tree” methodology; a tree with essentially five branches:

  1. Admission source (institutional vs. community);
  2. Timing (early vs. late);
  3. Clinical grouping;
  4. Functional impairment; and,
  5. Comorbidities.

Note that the very first branch in PDGM’s decision tree is admission source.

Post-Acute Episodes vs. Community Episodes

To be sure, PDGM places a significant financial premium on patients who are being admitted to home health within 14 days of discharge from an institutional setting. The argument – and it’s a good one – is that a patient coming to home health from an acute-care setting will require more resources (i.e., revenue) than one who is coming from the community. Accordingly, post-acute (i.e., institutional) patients deserve more attention (i.e., revenue). Even if we don’t agree, it is what it is.

If the patient is post-acute the agency will get more resources (i.e., revenue). It naturally follows that any episode not beginning within 14 days of an institutional stay is considered a community episode and allotted fewer resources (i.e. revenue). To be clear, every episode delivered under PDGM is either “post-acute” or “community”. And in every case the classification depends on whether or not there was an institutional stay within 14 days of the commencement of home health.

In 2017, 6,457,275 home health episodes of care were delivered to traditional Medicare beneficiaries nationwide (see chart above). Of those, 2,257,452 (35%) were initiated within 14 days of an institutional discharge while the other 4,199,823 (65%) were not. Also, keep in mind that we are looking at 2017 episodes, which means that all 6.5 million episodes were of the “60-day” variety. In 2020 and under PDGM, those 6.47 million episodes would represent up to 13 million 30-day periods of care – right?

Pause and ponder that for a second.

OK, so in 2017 35% of those 6.47 million (2.25 million) episodes were post-acute, meaning that care was initiated within 14 days of an institutional stay. Remembering that those 2.25 million 60-day episodes of care provided in 2017 will become potentially 4.5 million 30-day payment periods in 2020 is significant. It is significant because only the initial 30-day period will be considered post-acute for payment purposes. That second 30-day period will be a community (and late) episode because the institutional stay will have been more than 30 days before that second 30-day period began.

Now, remember that 35% of the 2017 episodes nationally were post-acute episodes. Under PDGM, that 35% will shrink to 17.5% if the period of care for the patient is still 60 days; one 30-day post-acute payment period and one 30-day community period. Make sense? This is potentially problematic because we know that post-acute episodes under PDGM will be paid at a higher rate than community episodes. But how much more?

I’m going to defer to the PDGM Ultimate Survival Guide, a pretty darn good PDGM summary document from the folks at PointClickCare, which indicates that a post-acute/institutional episode will be paid at a rate some 23% higher, on average, as compared to a community episode. Mucho moola!

The first chart above reveals that 205,019 of Florida’s total 577,881 episodes of care were of the post-acute variety in 2017. If Florida generates a similar number of episodes in 2020, it can reliably be projected that around 17.5% of them would qualify as post-acute. Incidentally, Florida’s metrics very closely align with the national metrics in terms of post-acute versus community episodes. But remember, averages are just that – averages. We’ll loop back a bit later and take a slightly deeper dive.

Early vs. Late Episodes

Once it has been determined that an episode is either post-acute or community, the next branch of the PDGM decision tree is the determination of whether an episode is “early” or “late”. And, incidentally, you don’t need to worry about “deciding” what’s what. The actual “decision” is made by the Centers of Medicare & Medicaid Services (CMS) using Medicare claims records.

The first 30-day period following admission is considered an early episode for the purposes of PDGM, while that second 30-day period is a late episode. Under the existing Prospective Payment System (PPS)  methodology, the first two 60-day episodes are considered “early” while the third and subsequent episodes are “late” – meaning that the first 120 days following admission are “early” under PPS, but only the first 30 days will be considered “early” under PDGM.

The 2017 Medicare claims from our National Home Health Analytics database tells us that the mean length of stay for a Florida home health patient was 1.80 episodes.  Nationally, that number was a very similar 1.89 episodes. Assuming that all of the 2017 episodes were 60 days long (they were certainly not, in reality), then the typical Florida patient would have been on service for 108 days (1.80 episodes × 60 days = 108), whereas nationally that figure would be 113 days (1.89 episodes × 60 days = 113 days).

If we look at Florida’s 108 days in 30-day tranches, that’s 3.6 PDGM “episodes” – of which one would be early and 2.6 late – 28% of the total episodes would be early and 72% would be late. In calculating the same math for the mean national patient there would be 3.8 mean PDGM episodes – of which one would be early and 2.8 late – 26% would be early and 74% late.

We know that early episodes will be paid higher than late episodes under PDGM. According to the same aforementioned Ultimate Survival Guide, the early episode payment value will be near 20% higher than that of a late episode. On average, Florida looks very much like the nation as a whole. On average. Let’s take that slightly deeper dive.

While reviewing national data, I noticed a bit of a trend with larger markets having a seeming abundance of community based episodes. So, I decided to take look at the very largest counties nationwide. Among the 10 largest counties in terms of total 2017 episodes delivered were: (1) Los Angeles County, CA; (2) Cook County, IL (Chicago); (3) Harris County, TX (Houston); (4) Dallas County, TX; and, Miami-Dade, FL ranked seventh.

Of these, Miami-Dade had the highest percentage of post-acute episodes delivered at 24.4%. In Dallas County, TX, post acute episodes accounted for a paltry 19.2% of the total. Remember, the national mean was 35% and Florida was also 35%. There is a bit of a message here I think. In a perverse sort of way, it’s a message about “patient choice”.  Best to choose post-acute patients! 

The Medicare Payment Advisory Commission, CMS, and the Office of the Inspector General have frequently and sometimes “enthusiastically” reminded us that home health was established as a post-acute Medicare service. It is clear that PDGM is a powerful weapon to help make certain the message comes across loud and clear.

In Summary, Long Live Post-Acute Episodes! Long Live Early Episodes!

If you have stayed with me this far, I truly appreciate your taking the time. You deserve a little lagniappe!

If you would like a copy of the complete 2017 “post-acute” versus “community” episode spreadsheet, just drop me an email at DBwell1@me.com with the subject line “Florida Episode Spreadsheet” and I’ll get it out to you post haste.

In the spreadsheet, you’ll find a table showing the breakout of episodes state-by-state. You will also find a tab revealing the county-by-county breakout in Florida and, perhaps most interestingly, you will find a breakout agency-by-agency for every home health agency in Florida. Pretty interesting reading If I do say so myself! Grab a bag of popcorn along with your favorite adult beverage and dig in! You are also sure to notice some geographical tendencies as well as the abundance of post-acute episodes at hospital affiliated agencies – surprise, surprise!

If after reviewing the data you have any questions or comments, I’d be more than happy to visit with you by phone (it’s sort of what I do).

In the meantime, we’ll leave the light on for you!

Cheers!

Duane Blackwell is Chief Executive Officer of National Home Health Analytics. Contact the author via email at DBwell1@me.com or call (318) 229-2246. Click here to download a PDF version of this article. Access additional PDGM resources at HomeCareFLA.org/PDGM.


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