After industry-wide scrutiny of the overhaul of the current home health prospective payment system, the proposed home health groupings model (HHGM) has resurfaced in an updated form—the Patient-Driven Groupings Model (PDGM).

No doubt, the proposed PDGM rule is now the most significant transformation looming over the home health industry since 2000.  Not only does it substantially change episode timing, but it also focuses on transitioning to a value-based payment system.  As this proposed rule continues to take shape, it is important for home health agencies to understand the shift from volume to value.

What do you need to know about the new payment model?

Key Elements of 2020 New Payment Model

  • 30-day payment periods
  • No reliance on therapy. Therapy thresholds are removed.
  • Case mix adjustment model with 432 payment groups using measures such as “early” or “late” time period; institutional or community referrals; comorbidity adjustment
  • Behavioral adjustment to base rates to account for diagnosis coding and visit volume changes (-6.42%)
  • Budget neutral rate setting except for behavioral adjustment (combined the proposed 30-day payment unit increases from the 2017 HHGM proposal at just over $1600)
  • 30-day LUPA ranging from 2-7 visits depending on case mix category


Here’s what our advocating partner organization, National Association for Home Care and Hospice (NAHC), is saying about PDGM:

In the 600-page proposed regulation, it appears that the 2020 model is a modestly adjusted and “warmed-over” version of the highly criticized Home Health Groupings Model re-labeled as the Patient-Driven Groupings Model. Many of the same weaknesses present in HHGM exist in this new version.

NAHC remains very concerned that the new model still includes a significant “behavioral adjustment” based on assumptions that would trigger a 6.42% reduction in base payment rates. Many of these assumptions are driven by CMS’s design with unnecessary changes to the current model. We do not want to prematurely judge the 2020 version of payment reform as it is complex, detailed, and will require deep analysis. However, we are concerned that CMS may have been relegated to using too much from its HHGM design because CMS is pressed by a deadline. We hope that Congress can recognize the value of providing a more flexible timeframe to CMS.

We are thoroughly reviewing the proposed rule and conferring with our industry partners.  McBee will continue to advocate for fair home health industry regulations.  Stay connected with us to remain up-to-date, so you have the insights needed to understand the proposed PDGM.