A Home Health Agency Playbook to Expanding into Medicare Part B

Hoping to create new revenue streams, home health agencies are more frequently turning to Medicare Part B.

In fact, some agencies are finding that delivering services under Part B is a natural progression for them.

In the case of First Choice Home Health and Hospice, deciding to offer Medicare Part B services was a case of navigating payment policy to finally profit from a service the company had long been providing.


“When it came to laboratory services, it really was looking at things and saying, ‘We’re already doing these services, and we’re not getting paid,’” Beau Sorensen, the company’s chief operating officer, told Home Health Care News. “We thought that if we could get paid, it would be a good way to take care of the company and provide an additional revenue stream for services that were already being rendered.”

Founded in 1996, Orem, Utah-based First Choice Home Health and Hospice services the Wasatch Front region. The company has differentiated itself by providing a number of Medicare Part B services, including outpatient therapy and Clinical Laboratory Improvement Amendments (CLIA) laboratory services.

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


When it comes to Medicare Part B services, agencies have a few options. They include physician services, infusion services and the aforementioned CLIA laboratory services — but it’s outpatient therapy that has become popular among home health providers.

For First Choice Home Health and Hospice, providing outpatient therapy was closely linked to the work the company had already been doing.

Providing it allowed First Choice Home Health and Hospice to hold on to patients that no longer fit the category of “homebound.”

“It lets us take care of the patient a little bit longer in a way that we couldn’t with the traditional home health benefit,” Sorensen said. “One of the big reasons behind providing the service was we noticed we were referring a lot of patients to outpatient therapy. We decided, instead of referring them out, let’s see what we can do to service them with our existing staff.”

For home health providers, a big appeal of offering outpatient therapy is the opportunity to refer patients to their own service, Jim Plonsey, president of Medicare Training & Consulting, told HHCN.

Prior to operating his consulting company, Plonsey owned a home health agency until 2008.

“If we have somebody who wasn’t homebound, we couldn’t admit them under home health. Instead, you admit them under outpatient therapy,” Plonsey said. “That’s one advantage. The other side of that is, on the back end, we had patients who didn’t want to be at a congregate setting to do outpatient therapy. They wanted to do the therapy one-on-one in the home.”

In a sense, this flow of patients allows home health agencies to be one-stop-shops when it comes to providing care.

Lansing, Illinois-based Medicare Training & Consulting provides reimbursement training for home health agencies, hospices, hospitals and federally qualified health centers (FQHCs).

Another appeal of stepping into the Medicare Part B services space is the fact that many home health providers already have a lot of the resources they need to get up and running.

These resources include a Medicare Part B billing license, a CLIA waiver certificate and a staff of clinicians, according to Sorensen.

While moving into the Medicare Part B space, providers need to pay attention to regulatory standards depending on the state their agency operates in.

“A thing we warn people about is there are certain states like Wisconsin and Pennsylvania that prohibit home health from doing it under their Medicare number,” Plonsey said. “They have to actually do an alternative, which is to get each therapist individually a billing submitter ID. That’s probably No. 1 — check with your state and regulations to see if you can provide these services.”

Home health providers also need to familiarize themselves with a different reimbursement structure, which may include co-pays, in order to avoid costly mistakes.

“A lot of it comes down to the very first time you’re getting set up in the system — knowing the bill rate code that you’re doing and the form that you’re supposed to [use], and ultimately the intermediary that you’re supposed to send these to,” Sorensen said. “If you just send it in blindly to your standard home health intermediary, using all your home health codes, … it’ll get rejected.”

Another company that has seen success from its outpatient therapy services is home- and community-based health services provider BrightSpring Health Services.

The Louisville, Kentucky-based company provides these services through Rehab Without Walls NeuroSolutions, a subsidiary of BrightSpring Health Services. Rehab Without Walls has a home-and-community division and an outpatient division that operates in 10 states.

Rehab without Walls views its outpatient therapy services as a key to the company’s bottom line, Geoffrey Diek, national director of outpatient rehabilitation at Rehab without Walls, told HHCN.

“Outpatient therapy services have allowed us to diversify our payer mix,” Diek said. “It’s absolutely been a vital service line for the company. It’s definitely been additive and cumulative to our financial success.”

For providers looking to enter the space, Diek can’t stress the importance of due diligence enough.

“The most important aspect of starting this business is ensuring that there are enough Medicare beneficiaries in the area and that it absolutely supports the need for a Part B delivery model without a lot of competitors as well,” he said. “The other thing I would look at is the number of open insurance networks because Medicare is only 35% to 40% of our payer mix.”

While Diek sees Medicare part B services as a “viable opportunity” for home health agencies, he believes that having a keen understanding of the rules and regulations will determine which providers will sink or swim when transitioning into this space.

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