The Patient-Driven Groupings Model (PDGM) has reshaped the landscape of Medicare reimbursement for home health agencies. While it brings new challenges, it also presents opportunities for agencies that adapt strategically—especially in how they handle therapy services, documentation, and patient assessments.
Whether you’re still navigating PDGM or just want to make sure you’re on the right track, this article breaks down what you need to know—and how to thrive under the new model.
🔹 What Is PDGM?
Introduced by CMS in January 2020, PDGM replaced the traditional fee-for-service, visit-based model with a system that focuses on patient characteristics and clinical needs rather than the volume of therapy visits.
Under PDGM, each 30-day home health episode is categorized based on:
- Admission source (community vs. institutional)
- Timing (early vs. late)
- Clinical grouping (based on primary diagnosis)
- Functional impairment level (low, medium, or high)
- Comorbidity adjustment (none, low, or high)
🔹 What Changed for Therapy?
The most significant shift: therapy volume no longer drives payment.
This means your agency:
- No longer gets paid more for higher numbers of therapy visits
- Must focus on functional improvement and clinical justification for therapy services
- Needs therapists who are skilled in accurate, compliant documentation—not just visit delivery
Agencies that relied heavily on therapy volume now need to optimize clinical documentation and assessment quality to maintain healthy revenue.
🔹 Why Functional Scoring Matters More Than Ever
PDGM ties reimbursement to functional impairment scores from the OASIS assessment (particularly GG items). That means your therapy team’s ability to:
- Accurately assess the patient
- Document baseline functional status
- Identify meaningful goals for improvement
…is directly tied to reimbursement levels.
Inaccurate or overly conservative scoring can lead to lower payments—even if the patient’s needs are high.
🔹 Documentation Quality is Non-Negotiable
CMS is paying close attention to:
- Clinical necessity of therapy
- Timeliness and completeness of documentation
- Alignment between assessments, goals, and care plans
Therapists must be able to produce audit-ready, defensible documentation that clearly supports every visit and justifies continued care.
This is where having a skilled, PDGM-literate therapy partner can make or break your audit risk.
🔹 Strategies for Succeeding Under PDGM
Here’s what top-performing agencies are doing:
- Investing in documentation training – especially for therapists and nurses completing OASIS
- Using credentialed, compliant-focused therapy staffing who understand PDGM
- Monitoring functional scoring and episode-level outcomes
- Working closely with QA/Compliance teams to flag risks early
- Strengthening care coordination so therapy and nursing teams are aligned
🔹 How Distinctive Therapy Services Can Help
At Distinctive Therapy Services, we work with home health agencies to ensure that every therapy visit:
✅ Meets Medicare’s medical necessity criteria
✅ Aligns with functional goals and OASIS scoring
✅ Supports PDGM reimbursement
✅ Strengthens patient outcomes and satisfaction
Our therapists are trained in PDGM best practices, documentation compliance, and functional improvement tracking—so you can feel confident in both your care quality and your reimbursement accuracy.
Ready to Strengthen Your PDGM Strategy?
PDGM rewards agencies that are clinically strong, documentation-savvy, and flexible in how they manage therapy delivery. If you’re looking for a therapy partner who understands these demands, we’re ready to help.
📞 Let’s connect and talk through your agency’s current goals and challenges.