Home Health & Hospice Week

Share information on where to buy the cheapest gas.

Prices are finally leveling off at the gas pump, but near-record highs are still squeezing the budgets of home care providers and their employees.

Fuel prices have risen drastically in the last three months (see Eli's HCW, Vol. XV, No. 17). And while they appeared to have stopped climbing at press time, the average national price for unleaded gas was sky high at $2.92 per gallon, according to AAA.

That compares to an average of $2.78 a month ago and $2.16 a year ago, AAA notes on its Web site www.fuelgaugereport.com. That's very near the record high of $3.06 set last September after Hurricane Katrina.

Bad news: And experts don't expect fuel prices to drop any time soon.

With prices so high, home health agencies are having a hard time finding relief for themselves and their employees, notes Nancy Nelson with the Illinois HomeCare Council. "Our members are feeling the pinch," agrees Neil Johnson with the Minnesota Home-Care Association.

Eighty-four percent of respondents to a transportation survey MHCA conducted said they reimburse staff for mileage, even though payors don't increase reimbursement for travel payments, Johnson tells Eli.

Compare your rates: Forty-three percent of respondents to a survey conducted by the Tennessee Association for Home Care said they reimburse employees for mileage at the 44.5 cents per mile rate allowed by the Internal Revenue Service, reports TAHC's Gayla Sasser. The remaining agencies pay in the range of 37 to 42.5 cents, the survey found.

The fuel cost problem is especially troublesome for rural HHAs and their employees, for whom daily travel may exceed 100 miles, Sasser notes.

In Minnesota, however, rural and urban agencies reported similar distances at least for the first trips of the day, Johnson notes--13.17 miles from the office to the client's home for the metro area and 13.13 for the rural areas.

HHAs are continuing the battle against high gas prices with these strategies:

1. Information sharing. IHCC and trade association Associated Home Health Industries of Florida suggest passing the word on MSN's gas price comparison Web site http://autos.msn.com/everyday/gasstations.aspx.

"Just enter your zip code and it tells you which gas stations have the cheapest prices--and the highest--on gas in your area," explains AHHIF's Gene Tischer. "It's updated every evening."

2. Add-ons. One Volunteer State HHA has developed an "add-on policy" for mileage, Sasser relates. For example, when the base mileage rate is 40.5 cents, the agency applies a 2 cent add-on to increase the rate to 42.5 cents while gas prices remain high. "This 'add-on' is a flexible number depending on the gas prices over a period of time," Sasser explains.

The beauty of this strategy is that agencies aren't stuck with higher-than-usual mileage reimbursement rates if gas prices recede.

3. Trip fees. Taking a page from the playbook of taxi and pizza delivery drivers, another non-Medicare agency in Tennessee is considering adding a "trip fee" for each visit, Sasser says. The agency will then pass on that fee directly to employees.

4. Tax credits. While it's more of a long-term goal, agencies in Minnesota are lobbying their congressional representatives for a tax credit when gas prices surge, Johnson notes. The credit would be similar to one enjoyed by farmers, he adds.