Welcome Back to Episode 2 of The Home Care Experience with T&A
We’re back with another insightful discussion on The Home Care Experience with T&A! In this episode, Amy Taylor and Troy Brooks take a deep dive into the current state of the home care industry. Since home care is constantly evolving, staying updated on trends, regulations, and financial shifts is crucial for professionals navigating this space. Let’s break down some of the biggest takeaways from this episode.
The Ever-Changing Landscape of Home Care
The home care industry is never stagnant, and as of late 2024, there are several major shifts happening. Here’s what we’re seeing:
1. Increased Scrutiny on Hospice Care
For years, hospice care was largely nonprofit-driven and didn’t face as much scrutiny as other sectors. However, as private investment has increased, so has regulatory oversight. A key change includes the 36-month rule, which prevents new hospice providers from selling or transferring ownership within their first three years of operation.
Additionally, new hospices are facing tougher claims audits and heightened monitoring, making it more challenging for newcomers to establish themselves. This scrutiny is likely to continue increasing over the next few years, making compliance and proper documentation more important than ever.
2. The Financial Aftermath of COVID-19
The financial landscape for home care providers has drastically changed since the pandemic. During COVID-19, many providers received significant federal funding, including PPP loans and Provider Relief Funds (PRF). Some agencies wisely invested this money into their businesses, paying off debt or expanding operations. Others, however, stretched themselves too thin and are now struggling to adjust as those funds have dried up.
One of the biggest challenges now? Wages and costs never came back down. Many agencies are still paying COVID-era wages and operating expenses despite not having the extra funding to support them. This financial strain is forcing agencies to reevaluate their spending and find new ways to remain profitable.
3. Medicaid & Managed Care Challenges
Providers operating in Medicaid home care programs—including personal assistant services (PAS) and pediatric home care—are facing growing scrutiny from Medicaid Managed Care Organizations (MCOs). These payers are increasing oversight on billing and documentation, which has led to more audits and recoupments for providers.
A few notable challenges include:
- Hospitalization Scrutiny: If a patient is hospitalized but an agency still bills for care, the MCO is demanding repayment.
- Electronic Visit Verification (EVV) Issues: Even with tracking systems in place, billing discrepancies are leading to provider audits.
- Fraudulent Billing Investigations: Some agencies have been flagged for services provided to ineligible recipients, creating compliance risks.
For pediatric providers, electronic medical records (EMRs) are becoming an audit risk. Auditors are flagging templates that appear too standardized, leading to claim denials and repayment demands.
4. The Rise of Private Pay & Commercial Insurance
As reimbursement rates from government programs become more restrictive, some providers are shifting their focus toward private pay and commercial insurance models. This allows for more flexibility in pricing and service offerings, but it also requires a different approach to marketing and business development.
Many new providers are choosing to start with private pay and add Medicare certification later, rather than jumping straight into government reimbursement programs.
5. A Changing Startup Landscape
While there was once a boom in home health startups, new agency growth is slowing. Instead, we’re seeing more investment in hospice care and a shift toward non-Medicare models. Many consultants who previously focused on launching new Medicare-certified home health agencies are now helping providers pivot toward private pay, commercial insurance, and other innovative service models.
Where Do We Go From Here?
Home care will always be an evolving industry, but one thing remains true: those who stay informed and adaptable will thrive.
Key takeaways for providers:
- Keep a close eye on regulatory changes and audit trends.
- Evaluate financial decisions carefully—COVID funding is gone, and new financial strategies are needed.
- Consider diversifying your service model—private pay and commercial insurance may be the future.
- Make compliance a priority—documentation errors are a top reason for audits and payment clawbacks.
Stay Connected
Want to stay updated on these trends and more? Make sure to subscribe to The Home Care Experience with T&A! We’ll continue breaking down industry shifts, providing expert insights, and helping home care professionals navigate this complex landscape.
Find us on your favorite streaming platform at The Home Care Experience with T&A and visit homecareexperience.com for more resources!
