Hospice Agencies Bring Value

to Skilled Home Care Companies

At our last Hospice Advisors Boot Camp in Atlanta, Bill McArdle, the Owner and CEO of Trinity Home Care and Hospice out of Texas shared a strategy on how hospices can bring greater value to home care companies and increase hospice referrals along the way.

This strategy also assists home care companies strengthen their financial performance.  A true win-win for both hospices and home care companies.  Hospice companies can develop a new source of referrals and home care companies perform better.  Bill’s experience in both home care and hospice provides him a great deal of insight and expertise on the topic.

Bill started by saying that many home care companies truly don’t know the details to their census.  He went on to say, “a big census does not always equate to profitability.  More sometimes can be less!”  Embedded in home care companies census are those patients who have been on service a long time and may have increasing service needs. These patients, from a financial perspective, do not strengthen the overall position for the home care company.  Some home care Administrators of smaller and medium size home care companies do not drill down to the extent necessary to understand what patients are in a loss position financially.  This provides hospices a strong talking point to open a dialogue on how hospice can assist better care for these patients.  Bill went on to say, “this is going to become even more significant in 2020 when the Patient-Driven Groupings Model (PDGM) hits home care companies”.  This value-based reimbursement model will drastically change how home care companies are reimbursed.  This will further drive home care companies to better understand the make-up of their census and how best to case manage these patients.  Bill gave the example that non-institutional referrals will be more challenging then every before not only in terms of a lower reimbursement rates, but the length of time to bill.  Home care companies will need to better case manage these types of patients of which some could be hospice eligible.  By doing so the home care company provides better care and along the way strengthens their financial performance.

By a hospice companies understanding the “pain-pleasure points” of their home care colleague’s business, they become a more valuable resource to the home care company.  Once home care companies understand this, they all a soon become interested in learning how to work with hospices.  The hospice that can better craft a value proposition and deliver upon it will “win”. Following are some recommendations and steps for a hospice to follow to develop this information into a growth strategy.

  1. You need to get in front of the Administrator and/or CFO who are accountable for financial management. The biggest challenge is building trust. Trust can be built by first demonstrating that you understand the challenges home care companies face.  Second, is by articulating and showing the home care company how hospice can assist improve the performance of their economic engine.  The engine being a quality low cost number of visits in a care episode that drives improved financial performance.  Remember, all home care census is not good census.  If a home care company acknowledges this point a working relationship will emerge.
  2. Bill indicated as you work with a home care company, respectfully ask them to share what their average cost per visit is. This will help get the dialogue flowing.  To calculate this figure, you simply add up the total monthly expenses and divide by the number of visits. This will give you an average cost per visit.  It’s that straight forward.  Then determine what the per visit reimbursement is. (this will be discussed below).  Once this is complete, you can drill down by patient to identify outliers. For example, an average cost per visit may run between $105 to $130. If you are averaging 15 to 20 visits for that case, you would generate a cost on the low end of $1,575 to the high-end of $2,600.  And if service needs are higher, the cost will increase. If your reimbursement was $2,200 you could be in a loss position for the case. Helping a home care company find those costly patients and providing them an alternative care path is where the sweet-spot is at.
  3. Bill in his years of home care experience, stated about 5-6% of home care patients are in a loss position in the company’s overall census. By trimming this census, a home care company will improve their overall performance. These patients and families could benefit from an alternative care path such as hospice and palliative care. Helping the company identity such patients delivers a strong value proposition first and foremost.  Once these patients have been identified, determine if a hospice and palliative care path is most appropriate. Have the home care and hospice clinical teams agree upon the best approach to assess hospice eligibility. The value proposition for the hospice to the home care company is helping them move eligible hospice patients off their census that are hurting financial performance.
  4. Become more knowledgeable on how the home care reimbursement world works. This is vital!!   Start with understand the Home Health Resource Group (HHRG) by Metropolitan Statistical Area (MSA). The Home Care Resource Group (HHRG) is the code that results from the point tabulations from responses provided on the OASIS – C1 document following a comprehensive assessment of the patient. Once these points are tabulated, they are plugged into the Four Equation Model and the results = HHRG.  Understanding the reimbursement model will help you compare the cost per visit to what is being reimbursed. Here is a link to a PDF which will get you started, https://www.cms.gov/Outreach-and-Education/Outreach/NPC/Downloads/2017-01-18-HH-Presentation.pdf
  5. Bill suggested that if you can walk into a home care company with a worksheet tool they can use to “plug and play” it will help build trust and accelerates the process. Here is a website Bill suggested and a group you could work with to construct such a tool, http://www.mlacpas.com/
  6. Finally, Bill indicated that hospices should talk with home care companies about patients that meet the criteria for dual-diagnosis. There are usually a hand-full of patients in a home care census that meet criteria for accessing their hospice benefit while still being able to receive skilled home care services. Once trust is developed with the home care company explore this opportunity.

In conclusion, there is a place for hospices to work with home care companies and deliver a great value. The value comes from helping home care companies move census that is costing them money!  It starts by understanding what the home care business economic engine is.  And how hospice can assist strengthen that engine.  Bill suggested that by simply working with a home care company to calculate the cost per visit and comparing that to reimbursement rates, you can assist a home care company develop more appropriate care paths for the patients and along the way strengthen financial performance.

In today’s competitive hospice environment, the ability to unlock a new referral source by delivering value and being a partner and problem-solver is truly a win-win.  Further, this growth strategy is very agnostic.  You could work with ten home care companies to assist them strengthen quality and financial performance. This is because you are  working within a company’s framework to achieve improvement.  You are not forced into showing favoritism and get caught in the middle.

This in not a “silver-bullet” strategy but is a way to incrementally find a new source of referrals and serve more patients and grow.

Hospice Advisors hopes you found this paper helpful as you explore your growth strategies!!

About Hospice Advisors

Hospice Advisors is a boutique hospice and home care consulting, coaching and training company.  Principles Greg Grabowski and Kurt Kazanowski along with their Associates have a passion for assisting organizations serve more people, growth and strengthen financial performance. To lean more about Hospice Advisors, please visit, www.hospiceadvisors.com and/or call Kurt Kazanowski at 734.658.6162

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