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CGS Overview: Home Health Patient-Driven Groupings Model (PDGM)

Effective for claims with a “From” date on or after January 1, 2020, Change Request (CR) 11081 implements the policies of the home health Patient-Driven Groupings Model (PDGM) as described in the Calendar Year (CY) 2020 home health (HH) final rule (CMS-1711-FCExternal PDF). The PDGM changes the unit of payment from 60-day episodes of care to 30-day periods of care and eliminates the therapy thresholds used in determining home health payment.

For 60-day episodes that begin on or before December 31, 2019, and span January 1, 2020, the payment will be the calendar year (CY) national, standardized 60-day episode payment amount.

For HH periods of care that begin on or after January 1, 2020, the unit of payment will be the CY 2020 national, standardized 30-day payment amount.

Under PDGM, recertification for home health services, updates to the comprehensive assessment and updates to the HH plan of care continue on a 60-day basis.


This page includes the following information (click the title to access):

Home Health Prospective Payment System (HH PPS) vs PDGM

Claim Filing Elements

The following claims filing elements are new under the PDGM. 

Occurrence Code (OC)

NOTE: If OC 61 and 62 are not present, Medicare systems will use inpatient claims history to assign Institutional payment groups based on the most current information.

Treatment Authorization Code
The treatment authorization code, which is reported under HH PPS in the TREAT. AUTH.CODE field on the Fiscal Intermediary Standard System (FISS) Direct Data Entry (DDE), Claim Page 05, is no longer required. This field will only be used when required by the pre-claim review process when it actually represents an authorization number.

Principal and Other Diagnosis Code
The principle and other diagnosis ICD codes on the claim will be used for payment grouping rather than the OASIS item. As a result, the claim and OASIS diagnosis codes will no longer be expected to match in all cases. When diagnosis codes change between one 30-day claim and the next, HHAs are not required to complete an ‘other follow-up’ (RFA 05) assessment.  However, an ‘other follow-up’ (RFA 05) assessment is required when such a change would be considered a major decline or improvement in the patient’s hearth status.  Refer to the MM11272External PDF for additional information.

Health Insurance Prospective Payment System (HIPPS) Code

After January 1, 2020, under the Patient-Driven Payment Model, a case-mix adjusted payment for a 30 day period of care is made using one of 432 home health resources groups (HHRGS).  On Medicare claims, the HHRGs are represented as Health Insurance Prospective Payment System (HIPPS) Codes. The distinct 5-position, alphanumeric home health HIPPS codes are created as follows:

  • First Position - a numeric value representing a combination of the referral source (community or institutional) and the period timing (early or late).
  • Second and Third Positions - represent the clinical and functional domains of the HHRG coding system.
  • Fourth Position - represents the co-morbidity category that applies to the patient.
  • Fifth Position - a placeholder for future use, required only because the field used to report HIPPS codes requires five positions.

Using this structure, a second period for a patient with a hospital inpatient stay during the period (institutional late), in the Wounds group, high functional severity and no co-morbidity would be coded 4CC11. HIPPS codes continue to be reported with revenue code 0023.

Low Utilization Payment Adjustment (LUPA)

For periods of care beginning on or after January 1, 2020, if an HHA provides fewer than the threshold of visits specified for the period’s HHRG, they will be paid a standardized per visit payment instead of a payment for a 30-day period of care.  Under PDGM each of the 432 case-mix groups has a threshold to determine if the period of care would receive a LUPA. This threshold is determined by the 10th percentile of visits in each payment group with a minimum threshold of 2

Partial Payment Adjustment

A partial payment adjustment will apply if a beneficiary transfers from one HHA to another, or is discharged and readmitted to the same HHA within 30 days of the original 30-day period start date.  The adjustment is pro-rated based on the length of the 30-day period ending in transfer or discharge and readmission, resulting in a partial period of payment.

Outlier Payment

When cases “lie outside” expected home care experience by involving an unusually high level of services in 60-day episodes under HH PPS, or 30-day periods of care under PDGM, Medicare claims processing systems will provide extra or “outlier” payment. Outlier payments can result from medically necessary high utilization in any or all of the service disciplines.

Posted: 11.25.19


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