Homecare Billing 101: Who Pays for Homecare Services? 

There’s no getting around it, homecare billing is complex. There are many ways clients may pay for their personal care services, and that means there are multiple payers that homecare agencies could potentially submit claims to. Let’s explore the various payer sources for homecare services and discuss how an automated billing system can help simplify the complicated world of homecare billing.  

Who Do Homecare Agencies Bill? 

While there are many programs that help people pay for personal care services such as charitable organizations, county funding, grants, PACE programs, and sometimes even Medicare Advantage, they are not as common as payer sources like private pay, Medicaid, HCBS waivers, managed care organizations (MCOs), and Veterans programs. Here we dive into the details of these frequently used payer sources:  

Private Pay 

Private pay means that clients or their families will pay out-of-pocket for their homecare services. They might fund this through their own savings, individual retirement accounts (IRAs), health savings accounts (HSAs), pensions, investments, annuities, real estate, and even Social Security benefits. It is important to note that some clients may start out as private pay clients and then spend down their assets until they qualify for Medicaid.  

According to the HCP Benchmarking report, in 2021 homecare agencies indicated that about 65% of their annual revenue came from private pay clientele. While this is currently the largest payment source, it has been steadily decreasing over the years. According to Home Health Care News, this is partially because the costs of homecare are increasing, and providers want to ensure that they diversify their payer sources in case those in the private-pay population are not able to keep up with these costs.  

Medicaid  

Original Medicaid (also called State Medicaid) does often cover in-home care services. This joint state and federal program provides healthcare services to low-income seniors. Medicaid pays for non-medical home care, home health care, and other in-home supports to help individuals remain living in their homes. Because Medicaid benefits change on a state-by-state basis, eligibility and services covered can vary. It’s for this reason that some states expand their coverage with HCBS waivers to provide support for people who may not be eligible for the long-term care they need under original Medicaid.  

HCBS Waivers 

Home and Community Based Services (HCBS) Waivers, also called Medicaid Waivers or 1915(c) Waivers, are funded through Medicaid and are meant to meet the needs of people who prefer to get long-term services and supports (LTSS) in their home or community. According to Medicaid.gov, State HCBS Waiver programs must: 

• Demonstrate that providing waiver services won’t cost more than providing these services in an institution 
• Ensure the protection of people’s health and welfare 
• Provide adequate and reasonable provider standards to meet the needs of the target population 
• Ensure that services follow an individualized and person-centered plan of care 

States can use these waivers to target specific populations, based on things like age or diagnosis and provide them with any number of helpful homecare services. To be eligible for an HCBS waiver, individuals must demonstrate a high need for care that would otherwise make them eligible for care in an institutional setting. 

Managed Care Organizations 

According to KFF, 72% of Medicaid beneficiaries are enrolled in comprehensive managed care organizations (MCOs). Medicaid managed care is a way of delivering Medicaid health benefits and additional services through contracted arrangements between state Medicaid agencies and privately run managed care organizations (MCOs). For this reason, many homecare clients receive their homecare benefit coverage through MCOs. 

Veterans Programs 

The department of Veterans Affairs (VA) can help veterans pay for homecare services. Veterans who need long-term help with activities of daily living may be able to use a monthly disability payment known as “aid and attendance”, provided by the VA. Other cash benefits programs such as “Improved Pension” and “Housebound” can also be used to pay for homecare services. 

How Does Automated Billing Work? 

Now that we’ve covered the payer sources, the question is, how do you submit your claims and get paid? Homecare providers usually bill directly to the third-party payer, or Medicaid. Any uncovered costs are later billed to the client. Manually, this process involves time sheets, checking for errors, generating an 837 claim, sending that into the clearinghouse, and oftentimes repeating the process if there is a denial.  

Enter automated billing. Depending on their configuration, providers may be able to use HHAeXchange’s automated billing function which directly connects payers and providers for a seamless billing experience. Here’s how it works: 

• As soon as a caregiver clocks in and clocks out with EVV, that data appears in HHAeXchange, allowing schedulers to manage any exceptions, like missed or late visits. 
• After these exceptions are cleared, HHAeXchange’s pre-billing function will automatically verify that the visit matched the contract, authorization, and plan of care. 
• Once this pre-billing process is complete, providers can perform a final billing review to resolve any remaining contractual issues with the visits. 
• HHAeXchange will then generate the 837 file to be sent electronically to payers in their preferred format. 
• Based on the verified visit and EVV data, HHAeXchange will generate the payroll file to be exported to your payroll system. 
• Once the 835 is received, HHAeXchange will match it against the 837, automatically reconciling claims and allowing you to work denials and AR. 

If you are interested in learning how your homecare agency can utilize automated billing to simplify your claim submissions, request a demo today!