The final phase of PDGM: What to expect & actions to take now
Coming in 2022, the final phase of PDGM is a continuation of CMS’ three-year progression of other PDGM implementations. The first of these implementations began in 2020, when the reimbursement landscape changed for home health agencies from receiving 50 or 60 percent upfront for a 60-day period to receiving 20 percent upfront for just a 30-day period—a significant cash flow impact to home health agencies in PDGM’s first year.
In 2021, CMS has now implemented no-pay RAPs, taking reimbursements from 20 percent upfront to zero—essentially turning Medicare home health into a 30-day payment period with reimbursements happening after care is provided. This approach is not unlike fee-for-service payers where insurance providers are billed for the month; however, the implementation in 2020 and 2021 created double claims, forcing home health agencies to send an average of two claims per month per patient.
The good news is that some relief is coming to the industry in 2022. With PDGM’s final phase, RAP claims will be eliminated, taking agencies back to the one-claim-per-patient-per-month concept. This process is called the Notice of Admission (NOA), which will happen at the beginning of the patient’s admission.
What is PDGM’s Notice of Admission?
A one-time submission of the NOA is due within five calendar days of the start of care (SOC). This NOA establishes that the beneficiary is under a Medicare home health period of care and opens a home health admission period, which is the period between the from date of an NOA and the discharge date of a final claim. An admission period may contain several 30-day periods of care and their corresponding claims. If a patient is discharged and has subsequent readmission, a new NOA would be required within five calendar days of the new SOC. If a patient transfers from one home health agency to another, an NOA will still be submitted. But you should report a Condition Code 47 to indicate the transfer, which is like the current RAP claim process.
There is also special transition guidance that will require a one-time artificial “admission date” that corresponds to the “from date” of the first period that begins in 2022 for patients who will continue services into 2022. In addition, there will be a non-timely submission reduction in payment amount tied to any late NOA submissions when the HHA does not submit the NOA within five calendar days from the SOC, like the no-pay RAP reduction in 2021. If an agency fails to file a timely filed NOA, the agency may request an exception, and if approved, CMS will waive the consequences of late filing.
What actions can home health agencies take right now?
With the no-pay RAP implementation, Medicare Advantage plans took too much time notifying providers how they would reimburse or if they would be following Medicare rules. This lack of communication caused confusion in the claims process, and home health agencies should expect that same delay in communication with this final implementation.
What home health agencies can start doing right now is contacting their Medicare Advantage plans often. Work assertively to get answers so they can solidify their process. Some good questions to ask include:
- Will you require an NOA?
- Will that NOA be due within five days from the admission date?
- Will there be a penalty for an untimely NOA?
- Will you accept an electronic NOA claim?
- Will you still require RAP claims?
By asking these questions now, home health agencies can streamline their processes and contact their EMR to discuss how these new workflows can be supported.
As the home health industry continues to adapt to the current PDGM implementation, more change is on the horizon. Agencies that prepare for these coming changes long before 2022 arrives will not only have a solid understanding of how their Medicare Advantage plans will implement, but they will also have processes and workflows in place to support this final PDGM phase.