Having an eye towards growth also means being aware of potential roadblocks that could obstruct forward momentum. Home care leaders at companies like Comfort Keepers, Nova Leap and TheKey are navigating various barriers amid their efforts to further scale.
At Comfort Keepers, the Ensuring Access to Medicaid Services rule is top of mind. Specifically, the rule’s 80-20 provision, which requires providers to earmark 80% of reimbursement for home- and community-based services (HCBS) to caregiver wages.
That provision is set to go into effect – barring challenges – over five years from now.
“The 80-20 rule is kind of hanging like this big cloud over us all year long,” Ramzi Abdine, chief operating officer of Comfort Keepers, said during a panel discussion at Home Health Care News’ FUTURE conference last month.
Irvine, California-based Comfort Keepers is one of the largest personal home care providers in the U.S. The company has more than 600 locations, and about 70 company-owned locations.
Indiana’s transition to managed care for certain Medicaid services is another factor that Comfort Keepers sees as a challenge.
“The switch in Indiana caused some issues for some of our Medicaid folk in Indiana,” Abdine said. “To give you an example, when the reimbursement was from the state directly, it took seven days to get the money. Now, if everything goes to plan, which never does, it’s 21 days. This just puts more stress on the working capital requirements of our franchisees.”
As a majority private-pay company, Nova Leap views staffing shortages as its biggest growth barrier.
“We’d be a lot bigger if we had more staff,” Nova Leap President and CEO Chris Dobbin said during the discussion.
Nova Leap is a Canada-based home care organization that has been growing in the U.S. The company has operations in Nova Scotia and 11 different states.
In addition to growth barriers, leaders are also focused on managing client retention as home care billing rates continue to increase.
“Being primarily private pay, we do lean heavily into the clients that are able to afford in-home care,” Melissa Reyes, president of the west division at TheKey, said during the discussion. “We are very transparent and upfront with our clients from the very beginning, around our annual rate increases due to inflation, pay pressure and other competing market pressures. We have found that just by having that conversation early – and making sure they understand the methodology behind what we’re doing – really has paid off for us in the long run. Our economics show that our clients today are long-tenured clients that use a high volume of hours.”
Delray, Florida-based TheKey provides home care, memory care and specialized care services in more than 100 markets throughout the U.S., Canada and Australia.
On his end, Abdine has noticed a slight slowdown in billing rate increases, compared to two years ago.
“That’s also a function of the inflation, which is kind of like leveling off,” he said. “We are very methodical about our rate increases, so we work closely with our franchisees to make sure they are basing those on market research. We know exactly where we want to be.”
Likewise, Dobbin believes that the rate of rising billing rates will continue to come down.
“We’re trying to be 20% below the very top, or something like that,” he said. “I do agree, though, that the pace of increases is probably going to slow down a bit, which probably ties directly into what’s happening with inflation.”
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