Agency discontinues private duty home care

When the decision was made to close the private duty home care division of Riverside Home Health in Kankankee, IL, the good news for employees was the opportunity to accept other positions in the Medicare-certified home health agency.

After 23 years of offering private duty service, the administrators decided that it was not possible to continue, explains Mary Newberry, RN, BSN, director of home health and outpatient services at the agency. Private duty home health relies upon the presence of a few long-term care patients who require a lot of hours each week to provide the stability you need to maintain staff and income, Newberry points out. "We began losing two long-term care patients at one time and only adding one to replace the two patients," she says. The agency reached the point that there were not enough long-term patients to sustain staff to provide services to all patients, Newberry says. "You cannot keep your caregivers on staff if you can't keep them busy," she adds.

Simultaneously, they found that they were pricing themselves out of the market, because they insisted on paying our private duty employees the same pay rates and benefits that employees in the Medicare-certified agency and the rest of the hospital received, says Newberry. "We knew that this would make our rates higher, but we did not think it was right to pay some employees less than other employees who were doing the same jobs, just in a different department," she says.

Telling patients

Communicating the closing to patients was difficult for everyone, admits Newberry. Nurses and managers spent time with the patients, explaining options, identifying other community resources, and listening to their concerns, she says.

While established agencies might have to evaluate closing a branch office or a service when financial pressures arise, some agencies are having difficulty getting off the ground, says Terry Cichon, CPA, director of homecare operations, FR&R Healthcare Consulting, Deerfield, IL. "The ability for new agencies to generate referrals is especially difficult in Illinois, Florida, California, and Texas, where there are a large number of established agencies," she says. "I've had some clients take months to get enough referrals to apply for Medicare certification."

Because competition for referrals is increasing, Cichon suggests that agencies make sure they have a good marketing staff. "There is more emphasis on marketing for all agencies, but especially for agencies that offer hospice and private duty service," she says.

Data are the key

Successful agencies that can survive tough financial times are agencies that are data-driven, points out Cichon. "Their staff members understand how OASIS [Outcome and Assessment Information Set] affects reimbursements, and they make sure that OASIS is accurate," she says. Agency managers also need to make sure they are constantly monitoring income, expenses, productivity, and all other agency activities on a regular basis so that they have an opportunity to make tough decisions to ensure the future of the agency, rather than close the doors, Cichon adds.