One of the many sweeping changes under the Patient-Driven Groupings Model (PDGM) is the move to 30-day payment periods. This change has implications for nearly every part of your agency.
In this informative blog, we’ll explore the implications of PDGM on your agency’s on capacity and cash flow, including:
- Predictions for increased claim submissions by agency size (based on CMS data) and how that impacts the associated workload in your billing department and
- The impact on cash flow from getting half the request for anticipated payment (RAP).
PDGM’s impact on your billing department’s capacity
Does the change to 30-day payment periods mean you’ll need to bill twice the number of claims in half the time?
It depends on how many of your episodes end in less than 30 days, because:
- Episodes <30 days: You submit one RAP and one final claim
- Episodes >30 days: You submit one RAP and two final claims
Therefore, for all episodes lasting more than 30 days, you’ll be billing twice the number of claims in half the time.
So how many is that? If you don’t have that data point at the ready for your agency, we’ve analyzed CMS data based on 2017 claims to calculate these averages for different size agencies:
Further, PDGM impacts your billing department beyond just the increasing the volume of claims, because claim submission is just one step in the larger process. Under PDGM, agencies also need to prepare for increased:
- Pre-bill edit reporting
- Payment verification
- Cash posting
- Posting LUPA adjustments
- Unpaid claim tracking and follow up
- And possibly, denied claims and/or additional documentation requests (ADRs)
Agencies should quantify this increased workload and create a plan to ensure they have the capacity they need to collect every dollar they’re due and maximize cash flow.
How getting half the RAP affects your agency’s cash flow
During the early months of PDGM, agencies need to prepare for a dip in cash flow. Specifically, when you submit a RAP for an episode you expect to last longer than 30 days, because you’ll be dropping claims every 30 days for that episode, your RAP payment will be half of what it is today.
Getting half the RAP will have the most impact during January and February, before final claim payments begin to catch up.
WellSky’s partner company Fazzi Associates offers outsourced billing services to help agencies with these challenges and more. To learn about Fazzi’s range of PDGM resources and services, get in touch with us here.