Administrative costs account for 1/3 of healthcare expenditures in the United States. While this number takes into account many other types of healthcare, home health and hospice administrative costs were included in this often cited and quite comprehensive study published in the New England Journal of Medicine. In fact, CMS recently introduced regulatory changes to decrease administrative burdens on home health and hospice agencies. These high administrative costs are often because of outdated, manual processes. With the right systems in place, this can mostly be avoided. Let’s dive into recognizing where your administrative costs may be too high, and what you can do to change them.
What’s Included in Home Health and Hospice Administrative Costs?
Home health and hospice administrative costs consist of costs that are related to your agency as a whole, and aren’t tied to a specific function. They include charges necessary for the basic operation of your agency and managing them is vital to ensuring efficiency and effectiveness. Some examples of administrative costs include:
- Costs associated with quality, OASIS, CAHPS, and cost reporting
- Billing and insurance-related costs
- Claims review
- Quality Assurance
- Office management
How to Reduce Home Health and Hospice Administrative Costs
A lot of home health and hospice agencies spend a tremendous amount of dollars on administrative costs. Unfortunately, these expenses are a necessary evil that often become your number one priority, with patient care taking a backseat. So, what are some things your agency can do to reduce administrative costs? We’ll tell you:
Tighten Up Your Coding & Billing – and Outsource if Necessary
Out of all administrative time and costs, coding and billing are likely where your agency spends a lot of dollars. Accurate reimbursement can be difficult with complex regulatory requirements and a high risk of errors. Without the right resources, billing can be slow and complicated. Ensure that you have a solid billing system in place that allows you to electronically check eligibility, validate claims, easily submit claims, manage the remittance process, and gives you total visibility into all of your claims.
Finally, if you find that your coding and billing is causing you to lose a tremendous amount of reimbursement dollars, and costing you administrative time and money, consider working with a coding and billing services company. By outsourcing these tasks, you can improve processes, reduce errors, increase reimbursement, and save associated administrative costs.
As the old saying goes, “time is money.” Doing tasks manually can be one of the biggest drains on home health and hospice agencies. Billing…clinical documentation…orders…referrals…all of these things can, and should, be digitized. Manual management of your processes opens your agency up to more risk because of a higher probability of mistakes. Also, reimbursement can be slowed. Waiting for written documentation, then transcribing, reviewing, coding, and billing…doing all of this “on paper” is a huge time waster.
Luckily, most home health and hospice EHR systems have functionality in place to help you automate practically all of your processes. You can document, review, and bill all within the same system, saving tons of time. But, are you worried about the cost of an EHR? When you choose the right EHR, the money you save by automating so many of your processes will be worth the investment.
You can’t completely eliminate home health and hospice administrative costs. However, It’s important to optimize workflows to reduce burdens and increase efficiencies. Staff are more productive when they don’t have to worry about unnecessary or difficult workflows. But, how do you know what’s working and what’s not? Ask them! They’re a great resource in giving you firsthand knowledge on where they stumble and offering suggestions on how to improve.
Take advantage of your EHR system to help you accomplish this task. While this may mean a change to your current processes, you may find that your software facilitates a faster, easier way to do things. Additionally, ask your EHR vendor about other vendors they partner with to see if you can simplify workflows even further. For example, HEALTHCAREfirst’s EHR software integrates and interfaces with more than a dozen industry-leading companies to improve interoperability and help streamline operations, including EVV management, Pharmacy Benefit Management, and inbound and outbound documentation automation.
Use Financial Analytics & Reporting
Finally, do you know where you’re spending your money? Examine your financial statements, general ledger, and payroll data. Review your Medicare cost report to give you a nice idea of where you stand. Also, you can leverage financial analytics. With analytics, you can pinpoint how and where you’re losing money. They can also give you good insight into what you should do to improve. If you’re not taking advantage of financial analytics, consider working with a vendor that offers them.
What HEALTHCAREfirst Can Do For You
HEALTHCAREfirst offers a number of products and services designed to help you reduce home health and hospice administrative costs. From EHR software, coding services, billing services, CAHPS, and analytics, we have everything that you need for success.
The HEALTHCAREfirst Difference
HEALTHCAREfirst gives home health and hospice agencies the solutions they need to ensure accurate reimbursement, lower costs, and achieve success.