Home Health · Cash flow

PDGM and what it does to home health cash flow

Short answer

The Patient-Driven Groupings Model (PDGM) has paid home health since 2020: 30-day payment periods, case-mix based on diagnosis and admission source instead of therapy volume, and — since 2022 — a Notice of Admission (NOA) that replaced the upfront RAP cash. The practical effect is that cash arrives later and depends heavily on accurate coding and filing the NOA on time.

What changed under PDGM

PDGM cut the payment period from 60 days to 30 days and removed therapy-visit thresholds as a payment driver. Case-mix now comes from clinical grouping (primary diagnosis), admission source, timing (early vs. late), functional level, and comorbidities.

Translation: coding and documentation drive revenue far more than visit volume does.

The cash-flow squeeze

The old RAP gave agencies a meaningful cash advance at the start of care. The Notice of Admission (NOA) that replaced it carries no payment — and if it’s filed late, your payment for that period is reduced for every day it’s late. Revenue is more back-loaded than it used to be.

What it means for your books

  • Recognize revenue by 30-day period, not by patient episode
  • Run a rolling 13-week cash forecast — the gap between money out (payroll) and money in (claims) is where agencies get squeezed
  • Track NOA timeliness and claim denials as financial metrics, not just clinical ones
Let NavSuccess handle itWe build the 30-day revenue model and the weekly cash forecast that keeps you liquid between claim cycles.

NavSuccess does this for home care & healthcare agencies — see Cash flow & forecasting.

Book a consultation

Common questions

Does PDGM change how much I get paid?

It changes what drives your payment — clinical grouping and coding, not therapy volume. Two agencies with the same visits can be paid very differently based on documentation.

What is a NOA?

A Notice of Admission. It replaced the RAP, carries no cash, and must be filed promptly — late filing reduces the period’s payment.

How do I forecast cash under PDGM?

With a period-based (30-day) revenue model and a rolling weekly cash forecast that accounts for claim timing and denials.

Talk to an accountant who knows your agency

Book a free 30-minute consultation. We’ll look at where your books and compliance stand and show you exactly what we’d take off your plate.