Balancing cost control and high-quality care is one of the biggest challenges non-medical homecare agencies face, especially given the low reimbursement rates and rising operational costs. Here are some key strategies agencies can implement to navigate this difficult balance:
Optimize your workforce management by using automated scheduling software to ensure your caregivers are assigned efficiently, reducing travel time and optimizing coverage.
Reduce turnover by offering more competitive wages, flexible scheduling, and career development opportunities. These things will help retain staff. High caregiver turnover increases your recruitment and training costs. Offering competitive wages, flexible scheduling, and career development opportunities helps retain staff and reduces the cost of advertising, hiring, and then having to replace staff again in an endless cycle.
Implement a tiered care model where you assign less complex tasks to lower-cost staff while reserving higher-skilled caregivers for specialized cases. This helps manage costs more effectively.
Implement technology to increase efficiency. Electronic Visit Verification (EVV) ensures accurate tracking of services provided, reducing billing errors and fraud risks. EVV can also automate both billing and payroll in more sophisticated modern systems.
AI-driven tools for automatically scheduling from authorizations, requiring mandatory documentation, and compliance tracking will all reduce administrative burdens and labor costs.
Consider using new telehealth & remote monitoring systems. These technologies allow agencies to support clients remotely, without requiring in-person visits for all services. This can increase the number of client touchpoints while reducing overall costs of care. These technologies can also differentiate your agency from the mass of competitors you face.
Another efficiency strategy is to diversify revenue streams. Private pay, VA, and long-term care insurance can help you expand beyond Medicaid waivers and offer services directly to private-pay clients and other payers that can help offset financial constraints.
Develop value-based contracts by partnering with managed care organizations (MCOs) that incentivize quality outcomes. They pay better for better outcomes and this can increase revenue opportunities. Just be sure that the base rate always covers your costs in case you miss the threshold for the incentive payments.
To control administrative costs without compromising care consider outsourcing non-core functions to third parties. This can work especially well for services such as payroll, billing, and compliance management, and can dramatically reduce overhead expenses.
Implementing performance-based incentives will encourage caregivers to meet performance benchmarks through bonuses or recognition programs. It can also improve service quality while maintaining efficiency. Also, simplifying administrative workflows will ensure more time is dedicated to care rather than paperwork.
Ensure compliance to avoid reimbursement denials. Maintaining accurate documentation and adherence to state and aggregator guidelines prevents revenue losses due to audits and claim rejections. Using a system like Compliance Plus can significantly improve your program compliance and oversight
Homecare agencies must be strategic in how they manage costs while upholding quality. By leveraging technology, optimizing workforce management, and diversifying revenue streams, agencies can create a sustainable balance between financial viability and exceptional client care. Investing in efficiency does not have to come at the expense of quality—it can, in fact, enhance it.
About the author: David Cole is a senior project manager for Compliance Plus. His background spans 35 years including having been a pioneer in the development of EVV, owner of several non-medical homecare agencies, and serving as the administrator for Interim Healthcare in Atlanta, Georgia. (www.davidscole.com)