Opening your own shop: Three must-have papers in private pay

Design is critical, so make sure yours is a winner

"The three most important documents in your private pay home care business are also some of your top management tools," says Kathleen Bailey, whose Lancaster, PA, home health care consulting firm, Private Duty Solutions, specializes in private duty/private pay services.

Bailey says these documents govern the course your private pay services take, so making sure they cover all the bases is essential.

"The first document you must have is a request-for-service form, and everyone in your office will use the information it contains," she says. (See form, inserted in this issue.)

Bailey explains that in a small company, "anyone who answers the phone should be able to take down the information required from that client to provide the requested service. And, from the client’s point of view, the faster they are accommodated by the agency, the happier they are going to be. People don’t want to be transferred or put on hold. They want whoever answers the phone to help them. This is customer service, and private pay is very, very customer-oriented. Don’t put a caller on hold unless you absolutely have to."

Check the details

Bailey recommends thinking of your request-for-service form as a work order. The nurse who does the case evaluation, the care coordinator, and the account manager all use the information. "You need to have the client’s identity information on this form, and the name and phone number of a contact person. There should also be space for writing very good, clear directions to the client’s home."

The request-for-service form will also house all necessary medical information, including diagnosis, any physical limitations, mental status, special diet requirements, physician’s name, address, telephone number, notation of any special equipment used, and the client’s preferred hospital. "If they have to go to the hospital, you better make sure they go to the right one," Bailey says.

A member of your nursing staff will evaluate the client based upon that information, and your coordinator will choose which people to schedule.

"If you are only providing companion services," Bailey says, "then you don’t need to have an RN do an assessment. But sometimes family members are too optimistic about what the client can do. You can face two very different scenarios. There may be a daughter who says, My mother is really independent and I think she only needs a companion.’ Then the caregiver gets there and here’s Mom, who’s really not able to care for herself at all."

Sometimes, clients may have to make do’

Bailey points out that assigning a home health care worker who is able to accommodate the client’s special needs isn’t always possible when care is requested with no advance notice. "Often, people need service started immediately. Sometimes, they’ll ask me to have someone there in an hour."

She acknowledges that when this happens, the choice of personnel to send on a new case may well not include someone who can fulfill the client’s entire wants.

"Sometimes, it’s better to have someone there who may not know all the intricacies of how to care for that patient for a little while until you can get someone with all the necessary skills. Then you just have to say, I can send someone right away who can do most of what you need done. Can you manage without some of the services you’ve requested for now?’ This way, the family and client will have some support until you can get someone for them who can do everything they need."

She adds that the difficulty in finding employees created by a tight labor market is compounding that problem. "Finding employees on a one-hour notice who can do it all is becoming increasingly more difficult. But you need to be very clear. Do they want to have someone there right away or do they want to wait until you have someone with all the proper skills? If they choose to have someone come in who may not be able to do everything they need to have done, then you need to document that."

Bailey emphasizes the private pay home care agency’s need for good, conscientious, detail- oriented employees. "You need to document this and every conversation, with everyone," she says. "That way, you always have a paper trail, some evidence to back up what you’re saying in case a client becomes dissatisfied later. If you’ve got someone who’s not documenting, you’re opening yourself up for mega-lawsuits," she says.

She especially urges documenting all conversations with insurance company employees, including the employee’s name, and the date and time of the conversation.

Psychology of personality is paramount

Bailey feels so strongly about the need for psychological understanding and preparedness in general that she hired a consultant to come to conduct a workshop for her office staff.

"I thought it was important for them in order to be able to work well with each other and also to be able to relate to the caregiving employees. It’s a little like being in sales," she says. "When you approach someone, you have to be able to figure out how that person thinks. You approach a left-brained person who likes structure very differently than someone who is right-brained and laissez-faire. It’s important for people in a service industry to understand these things."

Your request-for-service form should also have space for the billing information your account manager requires. Whoever answers your phone can get as much of that information as possible without inconveniencing the client.

"Always get a direct-dial number to the person who handles the client’s insurance if your services are covered under a client’s policy," Bailey says. "That saves you a lot of time. If this is a precertifying from an insurance company, you need the name of the person authorizing the pre-cert."

And, she counsels, "be sure you know the status of the insurance policy: If there’s a lifetime maximum on the policy, how close is the client to reaching it? If it’s a million dollars, and the client is at $999,000, you’ve got a very limited time you can provide service. Is there a deductible? If so, and it hasn’t been met, then the client will have to pay out of pocket, and you need to tell them you’ll be sending a bill they have to pay. Maybe the insurance will only pay for 240 hours. Then, you must be very careful not to give more than that or the client has agreed to pay the bill after that point."

Bailey also cautions that any special client requirements — such as the caregiver having to walk down a long driveway and pick up the day’s mail — are noted on this form. "Your employees need to know what’s going to be expected of them," she says. "Their responsibilities aren’t limited to what you note on this form, but it helps them to know in advance what the requests will be. You want the surprises to be pleasant ones!"

Lastly, Bailey advises that your service request form should have space for referral/source information so you can track the effectiveness of your advertising dollars. "The way things are now," she says, "advertising for clients is not usually the issue. It’s advertising for employees. But it’s still important to keep before the public, and you want to use the most efficient, cost-effective means to do this."

Be specific about everyone’s role

"You need a service agreement that clearly outlines the responsibilities and rights of the agency and the client," Bailey says. The nurse who does the initial client evaluation should review this document with the client very carefully.

"You really need to be sure your service agreement covers everything, but it also needs to be user-friendly," she adds. "Visually, it has to be easy on the eyes. Don’t use one long page of solid type with no white space. It’s too difficult to read and clients will just tune you out right away. You may have to spread this one out over a couple of pages to make it more visually inviting."

Bailey advises keeping "whereas-and-wherefore" legalese out. "It can say what it needs to say without that. I worked hard with my attorneys to be sure my service agreement covers everything we need to cover and still gives the impression that we’re happy to be taking care of you and these are our responsibilities.’ Further into this document, we also put the client’s responsibilities."

Bailey advises having the evaluating nurse read this with the client, preferably before service starts, unless it’s a case taken on very short notice and the nurse can’t do an evaluation until the following day. "The service agreement should clearly state your rates for the services you are providing and describe differentials, such as higher rates charged for evenings or holidays," she says. "If the same employee works for the same client for more than 40 hours a week, that client is responsible for overtime pay. If you have an employee who works 25 hours for one client and 20 hours for another, you can’t charge the clients for overtime."

Name your price . . . in advance

She points out that evaluations sometimes reveal a higher level of client need than that indicated by the information given over the phone. "You may have been assured that companion services were necessary," she says. "But then the nurse arrives and discovers the client has to use a bedside commode and needs help getting dressed in the morning. That’s not companion work. It involves personal care. But the person who spoke with the client on the phone may have quoted the charge for companion services."

Bailey suggests that charges for services be filled in at the time the service agreement is signed. "There might be extenuating circumstances," she says. "What if the person receiving the care lives 25 miles out in the country? You’re going to have to pay your employee a little bit more to get there. Then, you want the client to agree to pay mileage or incorporate that additional amount into your hourly rate."

She adds that if the client wants the employee to provide chauffeuring services in the employee’s car, then the client is responsible for paying the mileage expense. "You can charge the client more than you pay the employee for this," she notes. "You have additional administrative work and you are carrying extra liability. If you are paying the employee 30 cents per mile, you may need to charge the client 60 cents per mile."

Bailey advises that a service agreement needs to have a space for consent to release information to insurance companies and physicians. A client who doesn’t feel comfortable with that can cross out that section and initial it. "In fact," she says, "any portion of the service agreement can be handled this way, and the remainder of the form will still be valid."

Even though private duty home care service to the client can end very abruptly, as in death or transfer to a hospital, your service agreement should also have a place for defining the terms for terminating provision of your services. "For management purposes, a three-day notice is nice to have. It gives you time to reschedule your employees," she says. "And if you need to terminate services to the client for any reason, do it in writing. Either hand-deliver or send a letter by certified mail with return receipt request, and be sure you give the client the names and phone numbers of every other private pay home care agency in town so you can’t be accused of abandonment."

Bailey says your service agreement should contain a section in which your client authorizes the insurance company to pay your bill. The agreement should also acknowledge that the client has received a copy of the patient’s bill of rights and a release of liability for your agency if the client receives chauffeur services from your employee.

A good agreement-to-standards

"My agreement-to-standards form clearly states that my employees are not promised a certain number of hours of work during any given week," Bailey says. "It also includes the most commonly violated employment policies, such as no call, no show,’ don’t take someone else to work with you, etc."

An agreement-to-standards can be included with your policy handbook. "Your employee should sign this form during orientation. Your agency should retain the original and give the employee a copy," Bailey says.

She notes that this form should include a requirement that the employee call your office when they are available for work. "If you don’t have this," she says, "you might document that you were unable to reach the employee by phone; but if you have to attend an unemployment hearing, your employee can say, I was available for work,’ and there’s no real proof to the contrary. Put the responsibility on them to notify you of their availability. If your employee files for unemployment benefits, you can just send a copy of your agreement-to-standards form to the unemployment office and not even have to go the hearing."

[Editor’s note: Bailey offers a complete start-up management program, as well as an analysis of current private pay services and recommendations for improvement. For further information, call (877) 509-4452.]

Kathleen Bailey, President, Private Duty Solutions Inc., 313 W. Liberty St., Suite 126, Lancaster, PA 17603. Telephone: (717) 509-4452. Fax: (717) 509-7397. E-mail: kbailey@