Beyond Hours: The rise of Skill-Based Billing in Home Care – And Why Its Not For Everyone
The home care landscape is evolving. For years, agencies have primarily billed based on the length of a caregiver’s shift. But a growing number are exploring a different approach: billing based on the skills of the caregiver providing the service.This shift isn’t without its challenges, but it represents a potential pathway to increased revenue and improved care quality. Let’s dive into what’s driving this trend, the benefits, the hurdles, and whether it’s the right move for your agency.
The Current Model: Why Length of Shift Dominates
Traditionally, home care billing has focused on time. Agencies like family & nursing Care, a Maryland-based provider with over $65 million in private pay revenue, have built accomplished businesses on this model. According to Kursban of family & Nursing Care, the simplicity is key.
“We’re going to go to a four-hour shift,” Kursban explains. “Because they’re still going to hop in the car, drive, go, work and come home. If they’re able to work longer hours, they’re usually willing to work. So it’s less about the skill.”
This approach acknowledges the logistical costs associated with each visit – travel time, administrative overhead – regardless of the specific care delivered. It’s a pragmatic system that has proven scalable.
Why the Shift Towards Skill-Based Billing?
However, a growing recognition of the value of specialized care is fueling the move toward skill-based billing. Clients and their families are increasingly seeking caregivers equipped to handle complex needs, such as dementia, orthopedic recovery, or diabetes management. Simply put, a caregiver trained in specialized techniques delivers a demonstrably higher level of care.
Here’s why agencies are considering this change:
* Increased Revenue Potential: You can charge a premium for specialized skills.
* Enhanced Care Quality: Clients receive more targeted and effective support.
* Competitive Differentiation: Stand out from agencies offering only basic services.
* Attracting & retaining Talent: Upskilling opportunities and higher wages attract qualified caregivers.
The Challenges of Implementing Skill-Based Billing
Transitioning to a skill-based model isn’t a simple flip of a switch. It requires important investment and a strategic approach. Here are the key hurdles:
* Training Costs: Upskilling your workforce requires financial commitment.
* Demonstrating Value: You must clearly articulate the benefits of specialized care to clients and families.
* Pricing Adjustments: Raising rates can be met with resistance.
* Insurance Coverage: Ensuring reimbursement from long-term care insurance requires careful navigation.
Operationalizing Skill-Based Care: A Step-by-Step Guide
Successfully implementing skill-based billing requires a structured plan. Here’s how to get started:
- Assess Community needs: Identify the most prevalent conditions in your service area – dementia, orthopedics, behavioral health, etc. Activated Insights reports dementia specialist programs are currently the most in-demand, followed by behavioral health and diabetes.
- Partner with a Training Provider: Choose a reputable provider offering up-to-date, industry-recognized certifications.
- Invest in Upskilling: Provide extensive training programs for your caregivers.
- Adjust Compensation: Increase wages for upskilled caregivers – even if you can’t instantly raise client rates. A $2-$3 per hour increase is a good starting point.
- Refine Your Invoicing: Itemize services to reflect the specific skills utilized. Such as,rather of “12 hours of care at $45/hour,” invoice for “Dementia Certified Caregiver,12 hours,at $45/hour.”
- Communicate Value effectively: Train all staff to articulate the benefits of specialized care. Focus on improved outcomes, reduced hospital readmissions, and enhanced quality of life.
- Address Pricing Concerns: Be prepared to discuss rate increases with clients. Highlight the value proposition and be willing to consider alternative solutions for those who resist.
Navigating Insurance and Client Concerns
Long-term care insurance generally covers upskilled caregiver services,though a small out-of-pocket cost may apply
