[Sponsored] 4 Essential Approaches for Financial Recovery in Home Health

While the launch of the Patient-Driven Groupings Model (PDGM) mixed with the COVID-19 pandemic potentially spells double trouble for home health agencies in 2020, financial decision-making and outcomes can improve with a clear path to the right data.

With mid-year results soon available and stimulus fund reporting well underway, home health agencies are looking for answers on ways to account for pandemic funding, reforecast their budgets and assess internal and external data to meet requirements and end the year on a more successful note. The ability to access and interpret key metrics in the wake of these far-reaching regulatory and public health developments is critical.

Organizations of all sizes and scopes can make big gains in understanding and strategy development using the right data, tools and approaches to positively impact the bottom line. Here is a look at four essential approaches home health agencies can take to drive financial recovery.


Get a clear picture of where you are

While COVID-19 has disrupted all areas of operations, one of its biggest impacts that has gone under-discussed is the setback it posed to PDGM. To succeed under the payment model, operators need data. Yet for three months in early 2020, the pandemic soiled that.

“We don’t have clean data from April to June of how we performed, so it’s hard to paint a clear picture of where you are in the PDGM world,” says Robert Simione, director of financial consulting at Simione Healthcare Consultants.

Simione provides financial expertise to help agencies implement strategies focused on recovery, bringing clarity amidst multiple challenges and overlapping priorities. COVID-19 disrupts that clarity. But there are steps that agencies can take to rebuild it, even during the pandemic.


The lack of “clean” data from the spring doesn’t make analysis of the data a less important activity, but more important. A detailed view of the drivers of revenue and cost will allow you to better assess specifically what areas of the business were impacted and how that fell to the bottom line. Benchmarks, like those available through Simione Financial Monitor, with the same metrics lend context to understanding how you managed the challenges relative to other agencies.

Both of those views can be used to better plan for the future and manage performance as the year progresses. First, they must more tightly manage their staffing in order to handle the vast fluctuations in patient volumes, both surges brought by COVID and drops due to lack of elective surgery. Determine the financial outcome you want at the end of the year, and reverse engineer staff based on that, Simione says.

Second, just as agencies spent much of 2019 educating clinicians about PDGM, they must now re-educate clinicians about PDGM within the context of COVID-19. Simione recommends looking at the most recent data from the summer to develop new data scorecards that will reveal insights on patient functional impairments and comorbidities. Clean, recent data will also, crucially, help agencies manage LUPAs (low-utilization payment adjustments).

Rethink your budget

Operators next must rethink their budgets to match that new, clear picture. This was already necessary due to the move from PPS to PDGM; COVID-19 makes it more critical. When an operator understands her operational picture as well as her agency’s financial outcome goals for the year, she can then direct the budget to supporting the elements that will enable those goals.

If an operator has a preferred case mix and wants to improve functional impairment, or wants to improve institutional versus community referrals, or improve LUPA management, they have to budget for each of those outcomes.

“It all has to be a perfect symphony on the budget,” Simione says. “We need to give actual data back to those users so that they can make sure they are lock-stepping what their financial expectations are going to be. You have to get to a fine level of detail.”

Get your revenue cycle moving more efficiently and re-examine cash flow

The 20/80 percent revenue split under PDGM creates a new need for speed with closing episodes. Simione Healthcare Consultants is now looking at revenue cycle differently, changing focus from days-to-RAP payment and days-to-final to billing processes and each person’s area of accountability within the billing cycle.

The key, Simione says, is to examine all timelines between moves — from start-of-care to OASIS, to quality review, to RAP submission, and then looking at time to close visits, percentage of submitting documentation within 24 hours, and orders turnaround.

“Those are all critical components that we need to look at, and we need to break down each area to see where there is the holdup,” he says.

What Simione is finding with a lot of agencies are a lot of the same things they’ve always found: Clinicians that lack education and knowledge about billing requirements, intake departments that don’t collect all information, or don’t do so in a timely manner, and other standard challenges that really add up.

“Sometimes billing is on what I call, ‘The Island of Billing,’” Simione says. “We have to build that bridge over to ‘The Island of Everyone Else’ sometimes.”

Get insights on effecting change to drive quality improvement

With those first three approaches complete, home health agencies seeking to drive financial recovery must put it all together to drive quality improvement. That means taking a holistic view at all elements, says Christine Lang, director of data consulting at Simione.

“The fundamentals of understanding and evaluating quality versus financial impact — they are not dramatically different than they were,” Lang says. “It’s all about figuring out the right balance in terms of the amount of services that patients need, and then how that fits into your financial models.”

Data and full-picture insights ensure that operators are pursuing quality adjustments. This is where benchmarking fits in, too, which is vital for both COVID-19 and PDGM.

“I’m a fan of the PDGM model, because it’s so much easier to describe cost control, revenue and what makes sense to a clinical person from a financial standpoint,” Simione says. “If we touch upon these three things — look at the functional impairments, document the comorbidities and look at the LUPAs — and we can manage that, the financials are going to work themselves out.”

Learn more and achieve stronger financial performance with Simione Healthcare Consultants at Simione.com or call 844-293-1530.

Companies featured in this article: