Home Health & Hospice Week

Hint: Take a close look at travel organization, productivity.

Rural home health agencies will be in for a bumpy ride when the 5 percent rural add-on expires next month (see story, p. 59).
 
And that may mean doing some serious budget belt-tightening to survive. "You have to take a close look at every item" in your expenses to find places to cut costs, says Pat West, administrator for Pioneer Home Health in Bishop, CA.
 
Rural agencies can soften the blow of the reimbursement shortfall by evaluating the following areas for budget trimming:

 1. Productivity. Rural agencies have to get the absolute most out of their clinicians to keep costs down, stresses reimbursement consultant Vern Peterschmidt with Peterschmidt & Associates in Albuquerque, NM. "See if clinicians are being productive," he urges.

 2. Travel. In rural areas, home care visiting staff have to travel great distances to reach their patients. But many rural agencies still are neglecting to organize travel carefully to minimize costs and maximize productivity, notes Abilene, TX-based reimbursement consultant Bobby Dusek.
 
Clinicians can't see as many patients per day if they are zig-zagging all over your service area to reach them. Assign clinicians to cases by districts to keep travel time to a minimum, Dusek advises.

 3. Vendors. Now is the time to negotiate with vendors for rock-bottom prices, West counsels. You might be surprised by who is willing to bend on price, and how far. Anyone you write a check to is fair game for rate negotiation. Some examples are the landlord for your office space, your medical supply company and your insurance carrier.

 4. Raises. This year Pioneer is keeping its performance improvement raises for staff but scrapping the usual cost of living adjustment increase, West says. Agencies will have to judge how far they can go in curtailing pay raises before they lose valuable staff.

 5. Mileage. Starting Jan. 1, the Internal Revenue Service set the mileage reimbursement rate at 40.5 cents, a 3-cent raise over the previous rate (see Eli's HCW, Vol. XIII, No. 42, p. 336). But Pioneer still reimburses its employees at the even older 34 cent rate to cut costs, West says.

Caution: Reducing mileage reimbursement is an even bigger burden for rural staff, because they travel so far to see patients, West notes. As with salaries, agencies will have to gauge how far they can take this cost-saving measure before losing staff.

 6. OASIS education. In contrast to other items, HHAs should make sure to spend enough money educating clinicians on how to fill out the OASIS instrument - which sets reimbursement levels - properly, Peterschmidt urges.
 
"The price of ignorance will hurt them even more" than paying the money for education, he expects. Especially with a small agency, getting your rightful reimbursement for every patient makes a big difference.

 7. Grants. HHAs should explore grant opportunities, especially those focusing on rural health issues. Pioneer will be able to continue operations under the rate cut because it has secured outside grant funding to supplement its operating budget, West tells Eli. The agency won a three-year Healthy Aging grant from the California Wellness Foundation, whose goals include addressing health needs of underserved populations, including rural residents.

 8. Outsourcing. By using outsourcing, agencies can get the most experienced staff and reduce their salary and fringe benefit obligations, Peterschmidt advises. Some areas apt for outsourcing are quality assurance, accounting and financial services, he says.

 9. Telemedicine. If you have the capital to invest in telemedicine units, they can reduce visits and save your organization money - especially considering the extensive travel distances often required for rural visits.
 
Pioneer, which carries a patient census of around 40, has used its grant funding to invest in two telemedicine units, and it plans to purchase six more, West relates. The units reduce visits while at the same time improving outcomes and keeping patients out of the hospital and emergency room, she cheers.

 10. Lawmakers. The bills to extend the rural add-on are in the legislative system (see story, p. 59), West notes. Agencies should lobby their members of Congress to support them. Even if the expiration date passes, the add-on can be reinstated later. "We have fought this battle before and won," she says. 
 
Editor's Note: For information on filling out OASIS correctly to receive your rightful reimbursement, see Eli's OASIS Alert at www.elihealthcare.com/spec_oasis.htm.