Now that we’ve said so long to 2020, here's some advice for the new year from the experts at Simione Healthcare Consultants With the first round of Covid-19 vaccines becoming available to frontline health care workers throughout the country, this year’s flip of the calendar offers a glimpse of hope that the pandemic will loosen its grip on home health and hospice over the next few months.
But the new year ushers in plenty of new distractions and uncertainties. Making sure vaccines are available to vulnerable homebound patients and home care staff is just the first step. Home health agencies must also stay on top of new billing and coding for Covid-19 treatments and prevention, navigate the impact of quarantines on scheduling, and address the ongoing challenges of managing a remote work force, including telehealth services to patients.
The arrival of 2021 brings new financial concerns as well. Agencies are warily skirting the threat of cash flow shortages and stiff penalties under Medicare’s revised requirements for submitting Requests for Anticipated Payment (RAPs), effective Jan. 1. While RAPs no longer trigger any upfront payment, they now generate penalties when agencies fail to submit within a new 5-day window.
“It’s not unusual for a new year to bring plenty of new changes to home health – but because of the pandemic and ongoing public health emergency, 2021 will be particularly challenging to an agency’s profitability,” said J’non Griffin, President of Home Health Solutions, a Simione Coding Company.
Seven resolutions for profitability
With so many distractions, where should agency leaders focus efforts for maximum profitability?
Griffin and William J. Simione III, Managing Principal at Simione Healthcare Consultants, have pulled together a short list of areas needing attention as the first quarter unfolds – a list of seven recommended resolutions for increasing profitability this year.
1. Make the procedural and operational changes needed to avoid RAP penalties. Faster turnaround times, prioritized oversight for timeliness, efficient EMR processes and smart decisions about where not to cut corners are key elements for successfully navigating new RAP requirements in 2021, according to Simione. “And it’s important not to cut clinical corners in trying to adapt to the new RAP timeframe,” Griffin cautioned. “Agencies will need to be smart about how they approach this.” Sign up for Simione’s Jan. 7 complimentary webinar, “Revenue Cycle Shakeup: Key Strategies to Quiet the Aftershock of PDGM and RAP Changes.” 2. Consider making official application to join the GEO model. CMS plans to begin testing a new geographical-based care and payment model in select markets over the next few years – and the new model will make use of preferred provider networks operating under the direction of a contractor. The official name of the new model is the Geographical Direct Contracting Model, but it is quickly becoming known as the GEO model. In December, CMS asked agencies to signify their interest in participating by submitting a non-binding Letter of Interest and ranking 15 potential markets. The official application process will begin this year, and it’s worth your consideration to apply and get in on the ground level as CMS develops these proposed preferred provider networks.
3. Take another look at whether infusion therapy is right for your agency.
When CMS first announced that it would allow home health providers to bill for home infusion therapy, there was excitement in the home health field. Initial enthusiasm was replaced with ambivalence when it became apparent that the benefit might not be the opportunity home health providers had hoped for.
It’s worth taking a second look at the home infusion benefit in 2021, now that CMS has made some changes that may make a difference for Medicare as well as private pay beneficiaries.
4. Develop a data-driven strategic plan for growth.
Strategic-thinking organizations can thrive in today’s rapidly changing healthcare environment, but a solid foundation is necessary to shore up revenue, establish priorities and develop a long-term plan to move forward, sustain growth and adapt to meet the unexpected.
Need help developing your plan? Simione is recognized throughout the industry for its market intelligence, analysis of industry trends and implementation support.
“We facilitate the strategic direction for many organizations every year, helping leadership teams and boards of directors identify priorities and potential opportunities for both long-term and short-term growth,” Simione said.
5. Look for ways to diversify.
Last year’s implementation of Medicare’s new Patient-Driven Groupings Model (PDGM) was an industry eye-opener, doing away with therapy volume as the primary means of home health reimbursement and shaking up some previously successful business models largely dependent upon providing therapy services provided to a limited group of beneficiaries. As an example, agencies primarily serving residents of assisted living facilities with therapy services found themselves particularly vulnerable to PDGM changes.
Diversification of income is essential for the long-term growth and profitability of any business, and home health agencies are no exception. Both Griffin and Simione advise obtaining a professional evaluation of your market, your existing resources and current utilization and organizational structure to determine what makes sense for your organization in developing a path to diversification and growth.
6. Prioritize talent recruitment.
Having the right personnel in key positions is essential for agency success but recruiting and retaining talent continues to be a struggle throughout the industry. In a highly competitive market, some agencies feel shut out and fail to devote the necessary focus to this key aspect of profitability.
“We understand that developing compensation packages based on current industry dynamics and conducting a comprehensive searches to find the right candidates for jobs can be challenging and time-consuming endeavors,” Simione said. “But doing this carefully, with attention to detail, pays off by fortifying an agency against market challenges and positioning it to grow despite those challenges. “
Exact Recruiting, a Simione Talent Solution, has completed approximately 2000 searches nationwide, developing the largest network in the middle and senior management sector of the industry that includes operational, clinical, financial and sales leaders.
7. Shore up your revenue cycle.
With upfront payments gone under RAPs changes, many agencies are expected to experience a cash drought in the first quarter of the new year, making it more important than ever to maximize reimbursement. Since accurate coding accounts for three-fifths of an agency’s reimbursement under PDGM, the incentive to outsource coding services is increasing, Griffin said.
“It makes sense to focus on improving your agency’s level of coding expertise to avoid those reimbursement losses,” she said. “Since outsourcing can impact your bottom line by eliminating other fixed costs as well, it’s a sound way to tighten up financially and get on track for profitability this year.”
Simione is now offering outsourced billing services as well as coding and OASIS review, and bundled packages are available for cost savings.
Read more here about Simione’s outsourcing services and get your free quote.