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What is the Patient-Driven Groupings Model?

The home care industry is full of changes. New recommendations, new guidelines, new policies, and new best practices are a regular part of life when you are a home care executive. Most recently, the conversation about value-based payment and the PDGM, or patient-driven groupings model, has gotten a lot of attention.

Here is what you need to know about this change, which took place in January of 2020.

What is the Patient-Driven Groupings Model?

The Patient-Driven Groupings Model started officially on January 1, 2020, but it has been in the process for years. Aspects of health care, including senior care, have shifted to focus on preventing potential hospitalizations and providing quality care over the quantity of care.

Essentially, PDGM follows this quality over quantity rule of thumb. This new reimbursement model uses 30 day windows as a basis for payment of home care services. There are 432 case-mix groups that each 30 day period can fit into. 

CMS provides guidance on the new broad categories that include subgroups:

Admission source (two subgroups): community or institutional admission source

Timing of the 30-day period (two subgroups): early or late

Clinical grouping (twelve subgroups): musculoskeletal rehabilitation; neuro/stroke rehabilitation; wounds; medication management, teaching, and assessment (MMTA) – surgical aftercare; MMTA – cardiac and circulatory; MMTA – endocrine; MMTA – gastrointestinal tract and genitourinary system; MMTA – infectious disease, neoplasms, and blood-forming diseases; MMTA – respiratory; MMTA- other; behavioral health; or complex nursing interventions

Functional impairment level (three subgroups): low, medium, or high

Comorbidity adjustment (three subgroups): none, low, or high based on secondary diagnoses.

How Does PGDM Affect My Revenue?

The Patient-Driven Groupings Model will affect your agency’s revenue, though it is not uniform across the home care industry. Depending on your services, you could make more money via Medicare. However, it is projected that more than 40% of home health providers could see a decrease in reimbursement from CMS.

Early reports are suggesting agencies with less than 100 episodes annually, as well as nonprofit and facility-based agencies, could see an increase in reimbursement. In contrast, payments are expected to decrease for agencies with more than 1,000 episodes per year as well as for-profit agencies.

It appears that the timing and admission source categories have the highest potential to affect your agency’s revenue. For example, traditionally the first 60 day episodes were classified as early. In the PGDM, only the first 30-day episode is considered early. All subsequent episodes are considered late unless there is a qualifying hospital stay within the 14 days prior.

Many within home health agree that the Patient-Driven Groupings Model is a step in the right direction to ensure quality patient care. However, it is also a big change that can cause some confusion. We are cheering you on as you face this change and adapt as needed.




Hi, my name is Wendell Scott and I help Home Care Agencies who are experiencing high caregiver turnover rates, have trouble coordinating client care and feel frustrated with their team to easily increase efficiency and scale their Home Care business.

I’d like to share with you my Caregiver Recruitment Engine™ framework. In it, are the tools to help you develop a system to easily attract & hire caregivers (aka a repeatable system for recruiting quality staff), so you can organize your process, reliably recruit new caregivers and efficiently scale your home care team.



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