Current Margins in a PDGM Payment Model
Home Health providers worried about reimbursement and margins under CMS's Patient Driven Groupings Model can take a breath.....
In other Medicare certified healthcare sectors, providers have been forced to develop efficiencies to live within the strictures of tightening payment rules. Home Health providers have yet to scratch the surface of efficiencies, so rest easy, there is plenty margin in the episode when efficiencies are implemented.
One major component of home health efficiency is nursing workflow patterns. Improving this area more than makes up for annual reimbursement rate reductions. In general, however, innovation in this area has remained at best unchanged over the past two decades. Until now.
Systematized efficiency gains in clinical practice that parallel the usual and customary best practices of the rest of the Medicare-Certified continuum result in margins equal to the early days of PPS. Adding automated and live interactive quality assurance to an already high clinical standard of practice, provides you a nurse recruitment and retention tool as well.
Historically, clinical practice patterns are shaped by payment systems, which drive the need to attain process efficiencies in order to survive. When Diagnosis Related Groupings were implemented in hospitals, for example, that sector's care delivery model changed from Procedure-Recovery-Discharge to Procedure-Discharge- Recovery. At the same time, lengths of stay went from 10-12 days to 2-3 days on average, seemingly overnight.
Hospitals became efficient in ways initially thought unimaginable; they "leaned out" in order to survive. The hospital industry as we know it today is a testament to resilience and creativity. CMS is convinced that Home Health providers will follow.
As we move to the 30-day PDGM care period, our current practice of assessment-based care planning in 8-12 days will eat up 40-50% of the provision of care without treatment. HHA's recertification practices will rapidly change in a similar manner, just as BID diabetic care changed under payment pressure a few years ago.
Combine all of this with the fact that patients come to us much sicker than ever before, and with the mandate we keep them out of the hospital for at least 30 days, and it is easy to see that we cannot continue the practices of the past twenty years.
My team and I have designed a process and paired it with a third-party software product; and today the system to transition agencies into PDGM. Efficiencies resulting from the clinical practices we teach are keeping our clients ahead of the shrinking reimbursement rate curve.