Patient-Driven Grouping Model (PDGM)

Changes being implemented January 1, 2020. 

For the first time in 20 years Medicare is making a major change to home health care payments, namely a change from a 60-day payment episode to a 30-day payment period: a dissolution of the payment based on therapy utilization; and a payment based on the primary diagnosis and the comorbidities. The new payment system is called “Patient Driven Grouper Model” (PDGM). 

What Has Changed?

30-day Payment PeriodNo change in the frequency of signatures on the Plan of Care. The Plan of Care will continue to be updated at the 60-day point for recertification (except for care plan updates if there is an unexpected change in the condition, or a resumption of care after an in-patient stay) but payment will move to a 30-day episode payment period. Signatures will need to be obtained from the physicians in a much shorter time period.  

Clinical Grouper (Primary diagnosis) and Comorbidities – Primary diagnosis will have a large impact on the payment.  Patients are placed in one of twelve groups based on the diagnosis. Medicare has eliminated all symptom codes (“R” codes) from the list of acceptable primary diagnoses. 

Further Clarification

NO LONGER ACCEPTED AS PRIMARY DIAGNOSIS TO QUALIFY FOR HOME HEALTH:  Weakness, abnormal gait, syncope, bradycardia, and other such “vague” diagnoses will require the “WHY” from the Physician.  For example, general weakness might be caused by Osteoarthritis.  If so the documentation must give further details, i.e. what joints are affected? What side? Is it Rheumatoid?  Is it seronegative? Seropositive? Juvenile type? Organ involvement? 

Muscle atrophy will work IF the documentation states location of atrophy.  

Home Health agencies will be asking for more detail because many of the unspecified codes will also not be acceptable.  Wounds are especially important in the payment system and must be coded correctly.  For example, the wound might be caused by diabetes, or was it a pressure ulcer? Chronic ulcer?  If it’s an open wound the documentation must state the etiology. 

Medication compliance issues?  This is not an acceptable diagnosis but “under dosing” or “over dosing” on medication is acceptable. 

Other common “R” codes NOT ALLOWED AS A PRIMARY DIAGNOSIS (or if this is the reason a stronger diagnosis as to why they are having these symptoms must be documented.  Medicare is looking for the “WHY”):

  • Abnormal Gait
  • Shortness of Breath
  • Edema
  • Nausea and Vomiting
  • Syncope
  • Unsteadiness on Feet
  • Difficulty Walking
  • Ataxic Gait
  • Urinary Retention
  • Malaise and Fatigue
  • Pain Unspecified
  • Weakness

For a complete list of “R” codes which will not be accepted please refer to:


San Angelo Home Health will work with you to determine a valid diagnosis in order to care for your patients.

What Has NOT Changed?

To be eligible for home health services covered by Medicare and many of the Medicare alternatives, i.e. Medicare Advantage, the patient must:

  • Be confined to the home*
  • Need skilled services (Nursing or Therapy)
  • Be under the care of a Physician
  • Receive services under a “Plan of Care” established and reviewed by a Physician, and
  • Have had a “Face-to-Face” encounter with a Physician or Non-Physician Practitioner (NPP)

* Homebound does not mean the patient cannot leave their home, it simply means the patient requires assistance to leave home. The patient may leave home on an infrequent basis for periods of short duration.

To be homebound means:

  • Patient has trouble leaving home without help (like using a cane, wheelchair, walker, or crutches; special transportation; or help from another person) because of an illness or injury, or leaving home isn’t recommended because of patients’ condition.
  • Patient normally is unable to leave home, but if they do it requires a major effort.

Patient must still require Medically Necessary Skilled Services.

Patient must still be under the care of a Physician and receiving care under a Plan of Care.

Patient must have a Face-to-Face encounter (office visit) with the Physician or (NPP) within 90-days prior to, or within 30-days after, the Start of Care.

Additional Resources

Overview of Patient-Driven Grouping Model (PDGM) for Physicians

Payments and Payment Adjustments Under New Patient-Driven Grouping Model (PDGM)