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The Home Care Association of Florida
www.homecarefla.org
FEATURE
Positioning Your Agency as a
Cost-Effective Provider of Care
By John M. Reisinger, CPA
T
imes have been fairly challenging
for the home health industry
over the last handful of years;
with continual reductions to our
annual updates (2015 makes eight years in
a row!), some years actually having absolute
reductions to industry reimbursement (which is
likely for all four years of rebasing), the ongoing
F2F issues, the ebb and flow of the RACs, the
periodic arrest/conviction of home health
owners/operators and employees for fraud and
abuse in the Medicare and Medicaid programs,
and on, and on and on… How is one to feel
comfortable or positive about operating a home
health agency?
Merely surviving the changing landscape of
home health has become challenging as many
agencies over the last few years have closed
their doors and thousands more are struggling
financially and operationally. Well, wherever
there are challenges, there are opportunities.
One silver lining in the above is that you are
still here operating in the industry and as such
you have a chance to help position your agency
to meet the upcoming changes in a positive
and proactive manner.
Some things to consider in this vein are all the
changes that have impacted the home health
industry and health care due to the passage
of the Patient Protection and Affordable Care
Act (PPACA) in 2010. The PPACA was a
significant piece of legislation that precipitated,
amongst other things, the Rebasing of and cuts
to home health reimbursement, Accountable
Care Organizations (ACOs), the Value-Based
Purchasing Model (VBPM), etc.
So what do Rebasing, ACOs and VBPM all
have in common in regards to their impact
to home health? The HHAs that are the most
cost-effective are going to be the agencies
that are the least negatively impacted by these
changes and are the ones most likely to survive
because of, or in spite of these changes! Now,
as a financial person and in the spirit of full-
disclosure, I cannot/will not opine on the
clinical operations/outcomes of agencies and
the industry in general, outside of my areas
of expertise. However, I will say that you will
not survive in the long-run if you put all your
focus on your agency’s financial outcomes/
results! Think Home Health Compare and the
new Star-Rating system being implemented
by CMS. These are all clinical measures and
if they are not good, it will not matter how
much profits you can make per episode/
patient encounter, because you will eventually
not have any episodes/patient encounters with
which to make any profits.
But again, cost-effective agencies are the
ones most likely to survive and do well in this
“brave new world” that we are entering in
home health. And, just because your agency
has been profitable for a number of years does
not, in and of-itself, indicate that you are a
cost-effective entity. Well, “how can that be?”
you might ask. The common misconception in
home health (and business in general) is that
“if I am profitable, I must be cost-effective.”
Being profitable may mean that, but it does
not have to mean that! And that is so very true
for home health, and a big part of the reason
for that has been to the extreme generosity
of home health reimbursements since the
inception of the Prospective Payment System
(PPS) in home health. Since the inception
of PPS back in October 2000, Medicare
reimbursements in home health have always
been very generous; and it is my contention
NOT J US T TO SURV I VE , BUT TO THR I VE TODAY AND TOMORROW
