Ready, set, succeed: 3 ways to address leaner margins expected in 2023

Medicares Value Based Performance VBP Program for Home Health

Home health and hospice providers are bracing for leaner margins in 2023, looking for ways to tighten productivity and set in place efficiencies to make a bottom-line difference.

Economic indicators, a proposed pay decrease and nationwide changes ahead under Value-Based Purchasing are increasing the pressure for home health stakeholders. Inflation continues to drive the cost of doing business, with the Consumer Price Index released Sept. 13 by the U.S. Bureau of Labor Statistics showing key metrics hovering at accelerated rates despite dropping fuel prices.

Meanwhile, next year’s 4.2 percent pay decrease from Medicare is adding to the anxiety. Industry advocates say proposed legislation known as the Preserving Access to Home Health Act is gaining support in Congress and would freeze Medicare cuts through 2026, but SimiTree leaders caution agencies that Congress has not yet acted.

“We can’t count on Congress holding off the rate decrease for next year,” said SimiTree Principal J’non Griffin. “At this point we have to move forward as if there will be a significant pay cut.”

Medicare’s rate decrease is one of several pain points ahead for 2023 with the potential to significantly impact home health finances.

Next year will also be the first performance year under Medicare’s nationwide Value-Based Performance (VBP) program for home health. Agencies will be scored on their performance in several areas and total performance scores in 2023 will determine payment adjustments for 2025.

Crucial VBP performance areas include several parts of the OASIS, a patient assessment instrument used at various timepoints throughout an episode of care. Certain OASIS items already determine payment amounts under Medicare’s PDGM payment model, and VBP will heighten the importance of the assessment instrument to overall reimbursement.

As it grows in importance to reimbursement, the OASIS is also undergoing the most extensive renovation since its implementation decades ago, with a new and more complex version known as OASIS E set to launch Jan. 1, 2023.

Together, these changes will require some intensive preparation on the part of home health providers, and SimiTree leaders say savvy agencies will devote the fourth quarter to readiness efforts.

“These are all significant changes, and they are going to necessitate some intense preparation,” Griffin said.

SimiTree’s financial and clinical operations experts say there are three starting points in the readiness process: assessment, training and forging the right partnerships.

1. Take stock with assessments

Preparations for 2023 should begin with a fuller understanding of how Medicare’s proposed rate cut is expected to impact agency finances, and where operations can be tightened for increased efficiency, productivity and profitability.

Professional assessments in these five crucial areas quickly pay for themselves in increased revenue, accelerated cash flow and stronger overall productivity.

PDGM Impact Analysis. Remove some of the uncertainty about next year’s reimbursement with an impact analysis from SimiTree analysts. Using the latest CMS data, our analysts quickly provide an individualized report showing anticipated figures for your organization.
Profitability. Agencies need to drill down on revenue capture in 2023, strengthening cash flow and optimizing reimbursement. Knowing where and how to boost profitability is essential. SimiTree financial experts review agency finances and identify where cost efficiencies, best practices and revenue enhancements will make a significant difference in the revenue cycle.
Clinical Operations. Infrastructure, intake, staffing, workflow. Most agencies have room for tightening processes and reaping the value of increased productivity. Our experienced clinical operations consultants evaluate processes and organizational structure to help agencies achieve peak performance while delivering higher quality care.
Market analysis. Increased sales and marketing efficiency will be critical in 2023. SimiTree delivers important market data to strengthen growth opportunities by pinpointing higher value referral targets with helpful information about practices, patient volume and quality scores.
IT Assessment. Is your agency software fully aligned with your agency needs? Almost every EMR generates useful reports, but few agencies effectively use them. Customizing reports expedites claims processing, improves operational efficiency, tracks accountability, and more. SimiTree IT consultants are not affiliated with any software, and help agencies see increased benefits from any system.

2. Schedule the necessary training

SimiTree consultants say fourth quarter readiness training will be essential for navigating the new and more complex OASIS E. The new version of the important assessment instrument adds many new assessment items for clinicians, significantly changes some guidance for current items and restructures the form to create a much greater degree of cross-functionality among post-acute care settings.

“There will be a learning curve, and we encourage agencies to go ahead and schedule the staff training which is going to be necessary,” Griffin said. “Training is especially important because certain OASIS-based measures will play such an important role in an agency’s total performance score under VBP.”

VBP performance scores will be a mix of OASIS-based measures, claims-based measures, and certain scores from a 34-item HHCAHPS survey used to capture patient perspective of services received.

Total VBP performance scores for 2023 will in turn determine whether the agency receives a payment increase or decrease in 2025.

“Every home health agency needs to understand there are increasing financial ramifications tied to OASIS E. Understanding the way OASIS measures impact an agency’s VBP score will be an essential part of success next year,” Griffin said.

SimiTree offers a variety of OASIS E training, from virtual classroom instruction to individualized agency sessions, and can customize training programs as requested.

3. Find the right outsourcing partner

One of the most crucial pieces for success in 2023 may be having the right outsourcing partner in place, Griffin said.

“The right outsourcing arrangement will inspire confidence based on the reliability and expertise of the provider,” she said. “Certainly, price is one of the important factors to consider, but it is by no means the only factor – and making a decision based solely on price will lead to issues in other areas.”

She recommends choosing a partner based on four factors: quality of work, spectrum of expertise, industry reputation, and, perhaps most importantly, likeability.

“You want your outsourcing provider to be knowledgeable, trustworthy, dependable, and friendly – capable of becoming a seamless extension of your own staff,” Griffin said. “Don’t settle for less.”

Vet the provider’s reputation in the industry for reliability, she said, and look for an established provider with a history of happy clients.

“Weigh the overall expertise of the provider to determine overall capability, because success in today’s market really hinges on full interdisciplinary support and overall understanding,” Griffin said.

“Knowledge is interrelated. If your agency is selected for an audit or receives an ADR, it makes a real difference to be able to ask your trusted outsourcing partner for assistance there, too, and know that you are going to quickly be directed to the knowledgeable support you need for any issue that arises.”

Make certain the outsourcing provider routinely supplies the metrics that matter for success, Griffin said, helping your agency identify issues that slow claims processing and impede profitability.

“And finally, ask yourself: Will this outsourcing provider be a good fit for you, overall? Does it have a track record of working with agencies like yours? Does it have people who have been in your shoes and really understand the problems you face?”

SimiTree can help

SimiTree’s outsourcing team gives healthcare organizations access to a robust array of crucial services, from coding and OASIS review to full revenue cycle management. Our experts handle billing, collections, insurance verification, cash posting, and all aspects.

We offer full QAPI outsourcing and Review Choice Demonstration outsourcing as well.

SimiTree’s expertise is the foundation for your agency’s growth and profitability. Use the form below to reach out to us today so that we can get started making your organization stronger and healthier overall in 2023.