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More home care funding is coming. What does this mean for agencies?


Demand to age in place at home has grown steadily for decades and has spiked over the last few years. Meanwhile, many home care agencies are struggling. And families are facing months-long waitlists for care due to the ongoing caregiver shortage. “I’ve never heard such frustration over finding workers, and I’ve been doing this for 20 years,” said Vicki Hoak, executive director of the Home Care Association of America.

Policymakers are finally taking note. The Biden administration’s Build Back Better Plan, before it was defeated, originally included $400 million earmarked for home care aimed at increasing wages and reducing waitlist times. And New York State’s recent budget includes a $3/hour raise for home care workers over the next two years.  

Public funds are starting to pour into home care, pushing rates up. But what does this mean for providers? 

Adrian Schauer, Co-Founder, and CEO of AlayaCare, predicts there will be strings attached – and this will lead to an increased expectation for home care organizations to demonstrate improved health outcomes. 

Value-based payments vs. fee-for-service 

Linking reimbursement rates to outcomes with value-based payments is old news in the healthcare industry. But despite looming on the horizon for years, the home care industry still primarily operates on a “fee-for-service” or FFS model. Providers are mostly reimbursed at set rates for every visit – regardless of location, travel time, company structure, or size.  

While FFS makes payment simply because you always know how much you’ll be reimbursed for a service, it can incentivize unnecessary procedures and doesn’t hold providers accountable for care quality. Moreover – FFS doesn’t recognize or reimburse you for the actual value of your services. Many home care leaders feel a cold shudder when their services are referred to as “unskilled care,” knowing that what they offer is anything but unskilled. 

Adapting to value-based payments presents some hurdles for home care agencies, especially when proving how they are delivering these better outcomes. And it offers a watershed opportunity to be paid more fairly for the exceptional care they provide. 

On Home Health 360, AlayaCare’s podcast offering global perspectives on home healthcare, host Jeff Howell has explored how leading home care organizations to deliver and measure better outcomes for their clients. Here’s how they’re approaching this impending shift: 

Deliver outcome-based training programs 

How can organizations deliver even better outcomes to their clients while using the same human resources? Traditional caregiver training may no longer be enough in this new reimbursement landscape. 

In Episode 2 of Home Health 360, Mari Baxter, COO, and David Chandler, Senior Director of Strategic Programs at Senior Helpers Franchising, discuss their modern caregiver training to avoid hospital admissions and keep clients living independently. 

At Senior Helpers, their training facilities include a four-room apartment, with a bedroom, bathroom, kitchen, and living room, for hands-on exercises. 

“Caregivers are usually trained at a conference table,” says Mari Baxter, “We don’t do that. We bring them into a living space and give them 30 seconds to find all the hazards. To show us how to transfer a client from their wheelchair to their bed. If they don’t have the skills, we give it to them.” 

The results speak for themselves. Baxter shares, “Our ability to keep clients in their homes has increased by almost two months.” 

Download our VBP guide

Collecting better data on health outcomes 

Home care leaders know that coming up with a safe, effective care plan that improves outcomes goes deeper than reading referral notes. And measuring these outcomes goes well beyond checking off an ADL list.  

Home care leaders know the impact companionship, maintaining independence, and engaging in hobbies have on clients. But how can you demonstrate this to payers? 

You need to measure and track your KPIs. While KPIs might evoke tedious accounting metrics, almost any activity can be quantified and harnessed into a data set. This is where you’ll want to lean on your home care software provider for support. While nearly all home care platforms offer scheduling, invoicing, and payroll features – many private duty platforms don’t include a clinical documentation suite 

You’ll want this to create care plans, recommend interventions, set goals and measure progress. And you’ll need this to demonstrate outcomes in a value-based payment system. 

At Senior Helpers, David Chandler oversees the use of an innovative assessment tool called Life Profile. This questionnaire measures risk factors across 144 data points to produce an “Autonomy Profile Score” between 0 and 51. “If they score below 34, their risk of going to the hospital in the next six months is at least 80%. And if we can get them above 45, we can reduce it to less than 10%,” explains Chandler. 

By focusing on improving the risk factors measured in Life Profile, Chandlers shares, “We’ve gone from 3 – 4 residents moving out each month in 2019, down to 1 – 2 in 2021.” 

Prioritizing caregiver experience  

Value-based payment models will ensure your agency is reimbursed for the unique mix of services offered by home care – whether that captures travel time, social determinants of health, or care plan outcomes. 

So how can you ensure you not only have enough caregivers on staff but are enabling them to do their most impactful work? 

In Episode 8 of Home Health 360, Jennifer Tucker, COO of Homewatch CareGivers, notes, “We have to be very creative to put together the right packages in each community.” She recommends that home care leaders ask themselves, “What will it take to get someone to come work for you? It could be more PTO for some, 40 hours a week for some, and a certain amount of overtime for others.”  

To engage your staff: don’t just schedule caregivers; schedule the right caregivers at the right cadence to ensure you can offer your clients the most effective care. 

Whether you have 10 or 1000 staff, keeping track of everyone’s availability, preferences and skills can be exhausting. Home care agencies looking to offer schedules that improve employee experience should look for a platform that minimizes scheduling chaos for you with complex recurrences, availability and conflict harmonization, overtime optimization, and client-caregiver matching. 

And if you want to take employee experience to the next level, consider building travel and route optimization into your schedule. While caregiving may be a calling for some of your staff, driving between client houses likely is not. Discover how AlayaCare clients use machine learning and AI to minimize travel between sites. 

The future of value-based payments 

When this reimbursement model will sweep home care is unclear. But what is apparent? Agencies that want higher reimbursement rates under VBP will need the right technology. 

A recent report by Health Affairs regarding policy changes signaling the rise of VBP in-home care calls for “improvements to the data collected for home-based care (for example, who is receiving care), updated quality measures, and investments to data infrastructure (for example, admissions, discharge, and transfer systems).”  

Preparing for this shift will require a multi-faceted approach to innovation across training, data collection, and employee experience. AlayaCare helps home care agencies of all sizes and service lines collect, measure, and use data to improve client and caregiver experience.  

And for a deeper look into what value-based payments mean for our industry, you won’t want to miss our Ultimate Guide to Value-Based Purchasing.