PDGM’s Impact On Home Health Therapy Utilization Is Still Unclear

Heading into 2020 — the first year of the Patient-Driven Groupings Model (PDGM) — many believed there would be an inevitable disruption to home health therapy utilization.

More than three years later, it’s still unclear exactly how PDGM has impacted therapy, and how the industry can differentiate PDGM’s impact versus the pandemic’s. More clarity should come in the next few months, two of the largest therapy associations in the U.S. told Home Health Care News.

“One of the things we’ve been struggling to figure out is: Was the drop in therapy utilization due to PDGM, or was it due to the pandemic?” Kate Gilliard, the director of public policy and payment for the American Physical Therapy Association (APTA) told HHCN. “The answer is probably both, but trying to figure out how much can be attributable to one versus the other has been very difficult and, frankly, has been something that CMS has been uninterested in getting to the bottom of.”

The U.S. Centers for Medicare & Medicaid Services (CMS) implemented PDGM on Jan. 1, 2020.

Prior to PDGM, home health agencies were paid per therapy visit under the home health benefit in Medicare Part A. Now, payment is tied to patient characteristics.

“We knew that they were taking away the utilization of therapy as a component of payment, so we were worried from the get-go that this was going to cause home health agencies to drop utilization,” Gilliard said. “Because now they weren’t being incentivized to provide it. We also knew that before PDGM, there were some actors who were over-utilizing therapy just to get the bump in payment.”

APTA and other associations are not opposed to the new payment system. In fact, they support it.

However, CMS seems reluctant to believe that therapy utilization is tied to the pandemic at all, Gilliard said.

“They’re currently undergoing this payment adjustment to make up for changes they’re seeing under PDGM, and they’re basing it all on this assumption that everything that changed from 2019 to 2020 was due to the payment model,” Gilliard said. “We think that’s kind of short sighted because the pandemic had a huge impact on the delivery of health care. Especially for folks who are in higher-acuity settings.”

In the next three months or so, CMS should release another proposed rule that will include therapy utilization numbers for 2022, Gilliard said. The therapy world and the home health industry both, understandably, are anxiously awaiting those numbers.

“We’ve seen from the proposed rules in the last couple of years that there was a pretty significant drop in therapy and physical therapy utilization,” Gilliard said.

In 2018, the average number of therapy visits per 30-day period was 3.3. In 2019, it rose slightly to 3.33. In 2020, that number dropped to 2.7.

“That’s half a visit drop, per patient, per 30-day period, that lines up right with PDGM and the pandemic,” Gilliard said. “When you consider how many patients don’t need therapy at all, a half a visit per 30-day period is significant.”

Yet 2021 showed slight improvement, up from 2.7 to 2.73.

“Seeing if the 2022 data reflects an actual rebound will be very telling as to what actually happened during the pandemic,” Gilliard said.

Workforce implications

Gilliard mentioned a third variable that is playing a major factor in therapy utilization: workforce issues.

“Home health agencies, we’ve found, don’t have as many therapists as they would like,” she said. “They can’t deliver as much care as they’d like to, but they know it’s better to send a therapist into a home once a week as opposed to not at all. At what point do we blame them and slash their payments, and call it a behavioral adjustment under PDGM?”

Home health agencies are indeed going through those issues.

Take, for example, the Dallas-based Enhabit Inc. (NYSE: EHAB). Enhabit delivers home health and hospice services across 24 states.

“The primary challenges for our rehab teams — which includes physical and occupational therapists and assistants, as well as speech-language pathologists — are consistent with the challenges facing nursing professionals,” Bud Langham, executive VP of clinical excellence and strategy for Enhabit, told HHCN in an email. “They include staffing the increasing scope and demand for home-based services, while obtaining reimbursement consistent with the value that these health care professionals create.”

Enhabit has not seen a drop in demand for therapy services. However, finding therapists continues to be a struggle.

Amidst those struggles, Langham said the company’s therapy teams have adjusted in an evolving landscape.

“Our rehab team members have really stepped up over the last few years and helped us meet our patients’ needs like never before,” Langham said. “Waivers allowed PTs, OTs and SLPs to perform more comprehensive assessments than they were previously able to perform. This was a huge help to agencies and patients.”

Part of that success involves making sure employees are working at the top of their licenses.

“We have always believed in and promoted a highly collaborative approach to care where nursing and rehab professionals work at the top of their licenses and see each other as partners,” Langham said. “We continue to challenge our rehab team members to embrace their full scope of practice, which means supporting full-body system comprehensive assessments, medication management, goals of care conversations and health screenings.”

Looking ahead

Despite being three years removed from the start of PDGM, many in the industry believe there is still a gray area between what has affected therapy utilization in the home.

“Unfortunately because of the timing, it’s difficult to separate the impact of the pandemic and PDGM,” Scott Trudeau, the productive aging practice manager for the American Occupational Therapy Association (AOTA), told HHCN. “I can say that we have heard repeatedly from practitioners that there have been lots of issues attributed mostly to PDGM. This usually includes concerns with limiting access to services, not generally for the benefit of the Medicare beneficiaries.”

Like Gilliard, Trudeau believes some of CMS’ intentions around therapy were misguided.

“The business case seems to be that if we don’t get paid more when more therapy services are provided, less service equates to more financial gain,” Trudeau said. “This is almost the exact opposite of CMS’ stated intent. They want beneficiaries to get the therapies that are clinically necessary. Not more but certainly not less.”

Langham also believes that it’s too difficult to distinguish which had a larger effect on therapy utilization. He also said it’s not just a two-horse race, with other factors muddying the waters.

“PDGM and the pandemic are not the only factors that have been impacting our industry,” he said. “The massive migration to Medicare Advantage, prior authorization and utilization management practices, significant regulatory shifts like RCD and HHVBP and the general move toward accountable value-based care are constantly creating an even greater need for more effective and efficient ways to care for patients.”

Despite the murkiness, home health providers still see the value in offering these critical services.

“Rehab professionals will continue to experience pressure from referral sources, payers — and the industry — to practice at the top of their license and scope in order to drive critically important outcomes,” Langham said. “Studies show that rehab interventions can lead to a reduced risk of hospitalization and improve the quality of life for patients. Now more than ever, we need our rehab teams to embrace their critically important role in the home.”