When CMS launched PDGM in 2020, it was billed as a shift toward value — a smarter, more patient-centered way to pay for home health. But five years in, the reality is more complicated: reimbursement is shrinking, documentation is tightening, and the margin for error is razor-thin.

And yet, most payers still treat PDGM claims like they’re low-risk.

What PDGM Actually Does

• Replaces the old 60-day episode model with 30-day payment periods
• Assigns each period to one of 432 case-mix groups, based on:
  • Admission source (community vs. institutional)
  • Timing (early vs. late)
  • Clinical grouping (12 categories)
  • Functional impairment level
  • Comorbidity adjustment (none, low, or high)
• Eliminates therapy volume as a payment driver
• Introduces variable LUPA thresholds (Low Utilization Payment Adjustment)

> Translation: It’s no longer about how many visits — it’s about how well the patient fits the model.

Where the Risk Lives

• Unacceptable primary diagnoses (e.g., vague symptom codes) lead to RTPs (Returned to Provider)
• Incorrect functional scoring can shift payment by thousands
• Comorbidity coding is often under- or over-reported
• LUPA gaming — stretching visits to avoid payment cuts — is on the rise
• Documentation gaps delay or deny payment entirely

And CMS isn’t just watching — it’s cutting. Three consecutive years of payment reductions have already hit the industry2.

What’s Happening Now

• Bayada and other major HHAs are laying off staff due to unsustainable margins
• Republican senators are urging CMS to halt further cuts, citing access concerns and rising readmissions
• The market is consolidating — and smaller agencies are struggling to keep up with compliance demands

Meanwhile, fraudulent billing and AI-generated documentation are creeping into the space — and most payers don’t have a PDGM-specific review strategy to catch it.

What We Do Differently

We don’t just review home health claims. We decode PDGM logic.

• We validate diagnosis coding against CMS’s clinical groupings
• We flag functional scoring mismatches and comorbidity inflation
• We identify LUPA manipulation patterns
• We help payers build prepayment review strategies that reduce false positives and protect provider relationships

This isn’t about denying care. It’s about paying for the care that was actually delivered — and documented — within the rules of the model.

Final Word: PDGM Isn’t Broken — But It’s Being Bent

If you’re a healthcare executive still treating home health as low-risk, you’re missing the shift. PDGM is complex, evolving, and increasingly vulnerable to misuse.

Let’s bring clarity to the chaos — and build a smarter standard for what home health integrity looks like.

This is Off Script. We don’t just review claims. We review the model behind them.