New Medicare home health payment feature has implications for physician orders

Home health agencies may soon be asking physicians to be more specific about their patients' diagnoses when writing orders for their services. That's because Medicare is implementing a new Home Health Prospective Payment System case-mix adjustment methodology in 2020. It’s named the Patient-Driven Groupings Model (PDGM). While it won’t impact physician payment, PDGM may change how you order home health services for your Medicare patients.

Under PDGM, the principal diagnosis code on the home health claim will assign the home health period of care to a clinical group that explains the primary reason the patient is receiving home health services. However, there are certain diagnoses that are vague, unspecified, or not allowed to be reported as a principal diagnosis by ICD-10 coding guidelines that will not be assigned into a clinical group. If a home health claim is submitted with such a diagnosis, the claim will be returned to the home health agency for more definitive diagnosis coding.

To avoid home health agencies pestering you for those more definitive codes, you should use the most specific diagnosis you can when ordering home health for your Medicare patients. For instance, one of the vague diagnosis codes that Medicare will not be accepting is R26.89, “Other abnormalities of gait and mobility.” That means abnormal gait cannot be a principal diagnosis. Rather, if a gait abnormality is related to a neurological diagnosis, such as Parkinson’s disease (G20), then Medicare will expect the neurological diagnosis to be primary.

Similarly, if a gait abnormality is due to an injury, such as a fracture of the head and neck of the femur (S72.0), then the principal diagnosis should reflect the injury. Put another way, patients with an abnormal gait or other vague diagnosis may still receive Medicare-covered home health in 2020, but only if there is a more specific principal diagnosis on the home health claim, and home health agencies may be looking to your order for that more specific diagnosis.

An overview of the PDGM can be found on the Centers for Medicare & Medicaid Services’ website, as can additional information on payments and payment adjustments under PDGM.

— Kent Moore, Senior Strategist for Physician Payment at the American Academy of Family Physicians