Top 4 Challenges in Home Care Billing and How Revenue Cycle Management Can Help

Billing and financial management are critical to running a successful home care agency.

However, these processes can be fraught with challenges that not only impede cash flow but also consume valuable resources that could be better spent on patient care.

Understanding these challenges is the first step in mitigating them, and effective Revenue Cycle Management (RCM) can be a game-changer. This blog post will explore the top five billing challenges faced by home care agencies and illustrate how RCM can provide solutions to these pervasive issues.

1. Denied Claims

One of the most frustrating parts of a home care biller’s day is likely dealing with denials. For Medicaid, this is especially frustrating—yet critical to the revenue cycle. 

When you’re managing day-to-day claims, it’s easy to get lost in a sea of denials. The key is staying on top of each, but more importantly, putting guardrails and policies in place that prevent it from happening again. 

For example, let’s say a common denial for your agency is inadequate documentation. This might be a good time to schedule an in-service training for your caregivers. 

Reinforce the importance of proper, adequate documentation. Proper documentation might look different to each caregiver that you work with. And that’s the opportunity you have with the training. Demonstrate what good task completion looks like and how to properly fill out shift note documentation, in your agency management system and in a client binder. 

Beyond that, share with caregivers why they should bother with proper documentation. This ties directly into your agency’s ability to get paid and in a timely manner. They might not have been able to make that connection on their own. 

Not all denial reasons will have a linear path to resolution like this example, but it goes to show that there are ways to solve and reduce your denials. 

Maybe your agency has its hands full, and there’s not enough bandwidth to scrub each claim and analyze the reasons for the denial. A robust RCM system helps minimize denials by ensuring accuracy at each step of the documentation and billing process. It can automate checks for common errors and provide alerts for missing or incorrect information before submission. 

Additionally, RCM services often include a dedicated team that focuses on denial management, working to quickly resolve issues and re-submit claims efficiently.

2. Complex Billing Codes

Billing codes change often! Make sure that you provide your team with the most updated coding manuals as there are new ones added on a regular basis. 

Beyond that, make sure that you keep up with each payer you work with, down to the MCO level, to ensure that you are aware of new and existing best practices to ensure accurate coding. 

For agencies that offer multiple service types or service lines like skilled nursing, this is further complicated with the sheer volume of codes used. Challenge: The constant updates to coding standards (like ICD-10 and CPT codes) can lead to errors and misclassifications. 

You might also find support by joining peer groups with home care owners and operators who can shed light on local/state nuances you might not be aware of. Some may be better connected to Medicaid and other officials or subscribe to newsletters or webinars that could help you get clarity on billing codes or practices that you’re unfamiliar with. 

Ultimately, this could lead to you becoming more comfortable with delegating billing as a task. You might also find respite in looking for RCM services that provide access to coding experts who stay on top of all updates and regulations. These professionals ensure that claims are accurately coded, which not only reduces the likelihood of denial but also ensures that the agency is reimbursed at the correct rate for the services provided.

3. Delayed Payments

As your agency grows, you need to pay even closer attention to delays in payments. This becomes harder to do at scale, since your biller will likely be working with more and more complex billing environments, like Medicaid, VA, Long Term Care Insurance, and others. 

Before you reach this stage of growth, be sure to sit down with your biller to implement policies and procedures around billing. You don’t want denials and payment delays to become normal (or at least not for stuff that’s preventable). 

Delays in billing might not be due to your errors or delays. Other times, it could be due to incorrect information, expired authorizations, and more. This makes it important to implement and reinforce your policies. One example that can illustrate this easily is EVV. When your caregivers utilize EVV correctly, this ensures real-time input of visit and claim information. When your caregivers are asking to be clocked in, bypassing task completion information and shift notes, this can further complicate the billing process on the back end. 

Make sure that you and your team are on the same page when it comes to shift processes as well as how to bill for each claim on the back end to avoid delays. These delays can severely disrupt cash flow, making it difficult to manage day-to-day operations and plan for future growth.

If you implement an effective RCM program, this streamlines the entire billing cycle, from claim creation to payment posting. It accelerates the billing process through automation and reduces errors that might lead to payment delays. Furthermore, some RCM systems offer electronic payment functionalities that facilitate quicker payer responses and settlements.

4. Inefficient Tracking of Billable Hours

Is your agency management system making it hard for you to keep track of billable hours? 

This can complicate how you bill and get paid for services, potentially resulting in delays and denials of payment. If your system can’t properly map hours to specific authorizations for services, consider switching to a new agency management system designed for Medicaid and other types of payer landscapes. 

Private pay is on the decline and in order to keep up with a rapidly changing and competitive environment, you need to utilize systems that support your growth and make your operations more efficient. 

Beyond that, make sure that you have a well-oiled revenue cycle management machine to keep the money flowing in consistently and on-time, every time. 

Modern RCM systems often include time-tracking functionalities integrated directly with billing software. This integration allows for real-time recording and billing of services rendered, ensuring that all billable hours are accurately captured and promptly billed.

Optimize your billing processes with proper revenue cycle management.

Navigating the complexities of home care billing can be daunting, but with the right tools and expertise, these challenges can be effectively managed. Implementing a robust Revenue Cycle Management system helps address common issues like denied claims, complex billing codes, delayed payments, inefficient tracking, and compliance risks.

By optimizing billing operations, home care agencies can improve cash flow, reduce administrative burdens, and focus more on delivering exceptional care to their clients.