What Home Health Providers Need to Know Before a Medicare Part B Expansion

Home health providers that are looking to tap into new revenue streams may turn to more Medicare Part B services moving forward.

But these companies need to have a firm understanding of the reimbursement rules in order for their efforts to be fruitful.

The Patient-Driven Groupings Model (PDGM), industry consolidation and the Review Choice Demonstration (RCD) are just a few of the reasons home health providers may expand to include more Medicare Part B services in the future, Beau Sorensen, chief operating officer at First Choice Home Health and Hospice, said Tuesday.


Sorensen spoke during a presentation at the National Association for Home Care & Hospice (NAHC) Financial Management Conference, held virtually in 2020.

Other reasons for exploring Part B options could simply be a desire to diversify and manage risk better.

“One of the key reasons for this is diversification,” Sorensen said. “If you’re just home health and hospice, you’re subject to a lot of whims. The whims of PDGM, Medicare Advantage plans and referral sources who are upstream from you.”


When it comes to Medicare Part B services, providers have a few options, including outpatient therapy, CLIA laboratory services and physician services.

The Clinical Laboratory Improvement Amendments (CLIA) program regulates laboratories that test human specimens and ensures they give accurate, reliable and timely patient test results regardless of where the test is performed, according to the Centers for Medicare & Medicaid Services (CMS).

Unlike traditional home health care, most Medicare Part B services come with co-pays.

“One of the nice things about these co-pays and Part B is that it’s upfront, expected and consistent,” Sorensen said. “You’re able to actually do those co-pays upfront like you’re in a doctor’s office, instead of trying to collect them on the backend.”

This can be helpful to providers’ cash flow because it gives companies the ability to collect payment early on, rather than a month, two months or six months past the date of service delivery. Working within the reimbursement frameworks of both fee-for-service Medicare and Medicare Advantage can come with hefty delays, according to Sorensen.

That’s especially true if there are documentation speed bumps along the way.

Providers that don’t have experience collecting co-pays need to keep in mind that attempting to do this on the backend can be challenging.

For providers that have a lot of patients in Medicare Advantage plans, an additional tranche of bills on the backend could overwhelm billing staff or cause large writeoffs.

Additionally, providers need to remember that Part B doesn’t work for every patient and that it’s crucial to check benefits and eligibility.

“We want to make sure that as we’re checking benefits and eligibility, we’re saying, ‘Are they on with another agency?’” Sorensen said. “‘Are they on with us? Have they hit their cap yet? With Medicare Advantage plans, are we contracted to actually service these patients under a Part B outpatient therapy, visiting physician or laboratory waiver programs?’ If we’re not, then we can bill those insurances all day long, and they will give us denials all day long.” 

Another thing providers need to stay on top of is making sure patients are in-network for these services — and not just with an agency for its home health business.

On the staffing side, providers that don’t have the proper workforce in place to pull off this sort of expansion into Part B may find it difficult to succeed.

“Now, you have a lot of skills in your agency already,” Sorensen said. “You have people who know how to bill. You have people who know how to care for patients. … You have a whole host of different people who do their jobs very well. That being said, the skills can be different when you’re looking at Medicare Part B. The reason why is because it’s a different market.”

It’s important for providers to determine what needs to be done to obtain these skills.

The answer can range from retraining current staff to recruiting additional workers, according to Sorensen.

Still, providers already have a number of things in place that will prepare them for this undertaking.

“You already have a Medicare Part B billing license,” Sorensen said. “You already have a CLIA waiver certificate. You already have clinicians — these staff members who may be waiting around hoping that you’ll have additional visits for them if they’re paid hourly or per visit. You have a lot of resources that somebody who’s just starting out wouldn’t have.”

Looking ahead, home health providers that choose to expand their service lines to include Medicare Part B services may find themselves better prepared for future changes.

“As the health care market continues to change rapidly, being diversified and having more lines of service is something that can really help you out in the future,” Sorensen said. “You’re not just stuck as a home health or hospice agency. There’s a lot of different things we can do as home health and hospice agencies that are in our wheelhouse, because we’ve been doing them for so long.”

Among other examples of Medicare Part B, services are diabetes screenings, EKG screenings, medical nutrition therapy services, and hearing and balance exams.

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