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Patient-Driven Groupings Model (PDGM) Patient-Driven Groupings Model (PDGM)
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Patient-Driven Groupings Model (PDGM)
Flash Insights Report 2020

author - Paul Hess
Paul Hess
author - Jennifer Hickenlooper
Jennifer Hickenlooper
May 5, 2020 | Read Time: 2  minutes

The new Patient-Driven Groupings Model (PDGM) proposed by Medicare went into effect January 1, 2020. Now that the dust has settled, KLAS reached out to home health organizations to understand how this change has impacted their operations. 52 agencies responded, sharing insights into how smooth or disruptive the transition was, how helpful home health vendors have been, and how the new model has impacted the bottom line.

Note: The majority of responses came from agencies using Axxess, Brightree, Epic, Homecare Homebase, Netsmart, or WellSky.

Early Financial Impact Appears to Be Negative, Especially for Smaller Agencies

what type of financial impact has pdgm had on your organization

A little over 40% of respondents report that the change to PDGM has had a negative financial impact on their organization, including “cash-flow decreases and length- of-stay decreases.” This is especially true for small agencies (average daily census less than 200 patients), who often have a less robust patient pipeline and are unable to dedicate employees or teams to PDGM. Over half of these agencies report that the initial impact has been negative. An administrator at one smaller organization shared that they have seen a “decrease in RAP payments, leading to financial difficulties.” About one-third of respondents report that the change has had no financial impact or that it is too soon to tell what the impact will be.

financial impact by organization size
how smooth was the transition to pdgm for your organization

Transition to PDGM Was Smooth for ~50% of Respondents

A little over half of respondents feel their organization experienced a smooth transition to PDGM, despite the complexity of the changes. A director of business support noted, “[PDGM] introduced a lot of change to an already complicated payment model that had been relatively static for a number of years.” Many respondents who report a smooth experience did upfront work themselves to make sure needed processes were in place. Most feel their home health software vendor was ready for the transition; those who had a bumpier experience report minor software issues that were quickly resolved.

Home Health Vendors Helpful for Majority of Responding Organizations

Just under three-fourths of respondents report that their home health vendor was helpful in preparing them for the transition to PDGM. An IT director at a very large health system shared, “The vendor provided build guidance and it appeared to go smoothly.” A slightly higher percentage of smaller agencies reported that they didn’t get all the help they needed. Multiple vendors had customers who reported some small bumps in working with their vendor during the transition. Netsmart in particular had a handful of customers note that there were some gaps. A financial director whose organization uses Netsmart shared, “Netsmart generally did a good job on preparing for PDGM. There are always room for improvements. There have been a few hotfixes necessary for smooth operations.”

how helpful was your home health vendor at preparing you for the transition to pdgm
author - Elizabeth Pew
Elizabeth Pew
author - Madison Moniz
Madison Moniz
author - Robert Ellis
Project Manager
Robert Ellis
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This material is copyrighted. Any organization gaining unauthorized access to this report will be liable to compensate KLAS for the full retail price. Please see the KLAS DATA USE POLICY for information regarding use of this report. © 2024 KLAS Research, LLC. All Rights Reserved. NOTE: Performance scores may change significantly when including newly interviewed provider organizations, especially when added to a smaller sample size like in emerging markets with a small number of live clients. The findings presented are not meant to be conclusive data for an entire client base.

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