Serving the home health, home care and hospice industry since 1999.

by Darcey Trescone, RN, BSN

Recently, we caught up with Chris Attaya, VP of Product Strategy at Strategic Healthcare Programs (SHP), to discuss utilization under PDGM and why this topic is key to an agency’s success. For clarity, we present Attaya's insights below with our questions removed.

Right out of the gate the most important thing agencies are going to need to understand is just where are they relative to themselves and to benchmarks because PDGM is so new. Insights related to what portion of their patients are going to be in each of the new PDGM categories is valuable to begin that understanding.

The revenue changes from how agencies had been paid to what they're going to be paid can be significant. What is interesting when looking at profitability based on nationalized standard rates and costs under PDGM is CMS has recalibrated revenues based on the costs. The case weight, visit volume, and supply cost data of today under PDGM demonstrates that the profitability percentage by clinical grouping will be about the same. That is how CMS designed PDGM. Overall, we can expect to see revenue decrease depending on how agencies adjust to expected behavioral changes, but there is still opportunity to make a profit.

The level of success for an agency will depend on knowing the mix of clinical groupings they service, and the detailed care they are providing to reach good outcomes. It should not be a surprise that the key element in planning and preparing for January one under PDGM is utilization. Internal process changes to accommodate shorter billing periods will not be enough.

Utilization includes not just the number of visits but also the care plan we provide by clinical grouping while addressing the socioeconomic and other risk factors for the populations served. A good example is a therapy case where today we are providing sixteen visits but the change in revenue for that Home Health Resource Group (HHRG) under PDGM does not provide the profitability we expect. So, we need to begin asking questions, such as:

  • "Can we do 14 or 12 therapy visits and achieve the same outcome?"
  • "Can we add another lower cost discipline to the case to offset less therapy visits?"
  • "What other socioeconomic determinants and known risk factors could impact a positive outcome? Have we planned for these?"
  • "How can we keep therapy involved but at a lower cost?"

Sometimes the answer is going to require the sixteen visits for a patient, but this may not be the norm for all patients, and we should be looking for those trends.

Utilization is going to take fine tuning. Visit utilization that is benchmarked by HHRG by period and by period sequence (first, second, third, etc.) is important. Comparing this data with quality outcomes to understand what the best practice should be for populations will be ideal. Identifying the right number of visits, the right resources and the right care plan to get good quality outcomes and then trying to manage to this will be important under PDGM.

CMS has been doing risk adjustments on outcomes for some time now. Their calculations include an agency and national predicted score based on these risk factors and they have recently updated their models with Oasis D data. So, we already kind of have the data needed to predict how a patient should do based on all potential risks.

SHP captures 65-70% of all Oasis episodes within our data set when comparing to the fee for service (FFS) episodes that Medicare processes yearly. We are releasing in October a PDGM Preview report that allows agencies to look at their 2019 payment episodes as applied to the PDGM 30-day payment periods and grouped by HHRG. One can sort the report for analysis of LUPA rates by HHRG, region and more to identify operational concerns under PDGM. Things like, “What is my LUPA rate by category and by period sequence?”, “Where are my overall visits and how does that look compared to each period relative to the case weights for each of the 432 groupings?” How does the data compare to state and national benchmarks?

What we are looking to provide as agencies start the year is PDGM patient level detail reports on both a stay and period level. This will allow agencies early on to identify the PDGM grouping for those patients who were admitted January one. Shortly after this we will be providing Scorecard level data that allows an agency to benchmark against others in their organization by team, by clinician, etc. as well as by SHP state and national benchmarks.

About Strategic Healthcare Programs
Strategic Healthcare Programs (SHP) is a leader in data analytics and benchmarking that drive daily clinical and operational decisions. Our solutions bring real-time data to post-acute providers, hospitals, and ACOs to better coordinate quality care and improve patient outcomes. Since 1996, SHP has helped more than 7,000 organizations nationwide raise the bar for healthcare performance. For more information visit

Darcey Trescone, RN, BSN is a Healthcare IS and Business Development Consultant in the Post-Acute Healthcare Market with a strong background working with both providers and vendors specific to Home Care and Hospice. She has worked as a home health nurse and held senior operational, product management and business development positions with various post-acute software firms. To learn more visit She can also be reached at

©2019 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Tim Rowan's Home Care Technology Report. One copy may be printed for personal use; further reproduction by permission only.