Patient-Driven Grouping Model and Home Health Use Among Traditional Medicare Beneficiaries

In January 2020, the Centers for Medicare & Medicaid Services implemented the Patient-Driven Groupings Model (PDGM), the most substantial revision to Medicare's home health (HH) prospective payment system since its introduction in 2000. PDGM shortened the payment period from 60 to 30 days and eliminated therapy visit thresholds from payment calculations. Because Medicare's HH payment policies have historically shaped patterns of service use, payment changes under PDGM were expected to influence service intensity and episode length. The aim of this study is to examine whether PDGM influences HH utilization among Medicare beneficiaries, particularly those with Alzheimer's disease and related dementias (ADRD).

Cross-sectional cohort study.

A 20% random sample of traditional Medicare beneficiaries who used HH services in 2019 (pre-PDGM) and 2021 (post-PDGM).

We compared total HH visits and length of stay (LOS) during a standardized 60-day episode in the pre- and post-PDGM periods. Generalized linear models were used to estimate changes in visit volume and LOS following PDGM implementation, comparing beneficiaries with ADRD and without ADRD.

Beneficiaries with ADRD experienced a steeper decline in total visits (from 22.4 to 17.9) compared with those without ADRD (from 18.2 to 15.4), driven by reductions in therapy visits, which fell from 12.9 to 9.9 among beneficiaries with ADRD and from 9.8 to 8.3 among those without ADRD. The average LOS within a 60-day episode also decreased after PDGM implementation. Adjusting for patient-level characteristics, beneficiaries with ADRD in the post-PDGM period received 2.04 fewer total visits, including 1.4 fewer therapy visits, than those without ADRD. These patterns differed by the severity of ADRD.

PDGM's reimbursement changes and the shortening of the payment period may disproportionately affect Medicare beneficiaries with ADRD, underscoring the need to assess the implications for patient outcomes and future refinements of the payment policy.