Mastering Home Health PDGM: A Guide to Thriving Under the New Payment Model
The Patient-Driven Groupings Model (PDGM) has reshaped the landscape of home health reimbursement. Designed by CMS to improve accuracy and reduce overreliance on therapy treatment volume, PDGM rewards patient characteristics and clinical needs rather than visit counts. To succeed, agencies must understand how to align clinical, operational, and financial processes with PDGM’s data-driven structure.
Understanding PDGM Basics
PDGM divides home health 60-day episodes into two 30-day payment periods and classifies patients based on five key categories:
- Admission Source – Community or Institutional
- Timing – Early or Late
- Clinical Grouping – The primary reason for home health services
- Functional Level – Based on OASIS assessment data
- Comorbidity Adjustment – Low, high, or none, based on secondary diagnoses
These components create 432 unique case-mix groups, each with its own payment weight.
Key Shifts Under PDGM
- Therapy thresholds are gone. Payment is now based on patient characteristics, not therapy visit counts.
- Shorter billing cycles. Two 30-day payment periods require more timely documentation and RAP/NOA submission.
- Increased importance of OASIS accuracy. Each response directly affects case-mix weight and reimbursement.
- Stronger emphasis on coding. Accurate diagnosis coding and sequencing are essential for correct grouping and payment.
Strategies for Mastering PDGM
Strengthening Intake and Referral Review
Front-end accuracy drives PDGM success. Ensure referral and intake teams collect comprehensive clinical information including hospital summaries, physician notes, and accurate diagnoses before SOC scheduling.
Elevate OASIS and Coding Accuracy
The OASIS assessment determines functional level, and coding determines clinical grouping and comorbidity adjustment. Invest in:
- Ongoing OASIS education and audits
- Certified home health coders
- Real-time collaboration between clinicians and QA/coding teams
Optimize Scheduling and Visit Utilization
PDGM requires efficient resource management. Coordinate skilled visits to deliver quality care within the appropriate time frame while avoiding overutilization.
Use visit pattern templates aligned with care pathways for each clinical grouping (e.g., post-op, cardiac, neuro).
Strengthening Clinical and Financial Collaboration
PDGM success depends on teamwork between clinical managers, QA staff, and billing teams.
Create weekly interdisciplinary reviews to ensure:
- Documentation supports the coded diagnoses
- Orders and visit notes align with the plan of care
- Timely submission of NOAs and final claims
Monitor Key PDGM Performance Metrics
Track PDGM performance through data analytics and scorecards.
Key metrics include:
- Case-mix weight trends
- LUPA (Low Utilization Payment Adjustment) rates
- Average length of stay per 30-day period
- Functional improvement outcome
- Timely OASIS and order completion
Common PDGM Pitfalls to Avoid
- Incomplete or inaccurate OASIS data
- Late NOA submissions
- Coding mismatched with documentation
- Over- or under-utilization of visits
- Ignoring comorbidities that increase case-mix weight
The Future of PDGM Success
Agencies thriving under PDGM are those that treat compliance and data as part of care quality, not as a burden. With the right training, technology, and collaboration, PDGM can be a tool to improve patient outcomes and agency efficiency.
Mastering PDGM isn’t about more paperwork, it’s about smarter, patient-centered care. Agencies that prioritize front-end accuracy, clinical documentation excellence, and interdisciplinary communication are best positioned to succeed in this evolving reimbursement landscape.
If your agency is needing assistance or support with PDGM success including ICD-10 coding contact Proactive.
Written By:
Nichole McClain, RN
Principal Consultant of Home Health Services
Proactive Medical Review
Contact Proactive to learn more about Five-Star Improvement support services and develop a road map to Five-Star success in 2025.