Senior Living Business: HCBS Programs Generate Ancillary Revenue-
On Your Own Or Partnering With An Existing Home-Care Agency
Adding a home and community-based services (HCBS) program to its continuum of care can help a senior living provider gain a bigger footprint in the market that it already serves in a residential capacity and generate ancillary revenue. Some organizations, recognizing that their residents may qualify for Medicare or Medicaid home health-care services, provide HCBS services directly; others partner with an outside agency.
Bringing health care into private homes serves a population that also may need residential placement at some point; therefore, HCBS programs also offer opportunities to develop a next-generation customer base for the provider’s residential units.
That future advantage is something that organizations often don’t plan, according to William A. Dombi, Vice President for Law and Director of The Center for Health Care Law at the National Association for Home Care & Hospice (NAHC) in Washington, D.C. They realize after the fact that, as a residential facility, their relationship with the individual gives them a leg up on the competition. “Home health care provides an opportunity for the facility to introduce itself to a likely market in a less abrupt sense than might be the case when an individual actually might need to move to the facility,” he explained.
Setting up a home health-care program is primarily a business decision; but for not-for-profit organizations, it’s clearly a combination of mission and margin—creating a viable, revenue-producing program that serves a community of people needing the organization’s support.
Most senior living facilities set up a relationship with an outside home health-care agency (HHA) through a preferred-partner arrangement or a joint venture leading to partial ownership. That’s the quick way to get into the home health-care business. The specific criteria and reporting responsibilities can be resolved rather quickly, but the provider must be very careful not to violate the federal anti-kickback law, Dombi advised.
For example, if a CCRC with 500 residents determines that 10% of its residents need home health-care services at any given time, that translates to 50 patients per month coming into the HCBS program. To the CCRC, that represents value. If the CCRC then asks for partial ownership of the HHA in exchange for that value—without committing any other capital to the investment—that arrangement crosses the lines of the anti-kickback law. In essence, “the investment interest gained must be funded by something of comparable fair value [e.g., dollars] if you expect a return [revenue],” said Dombi...Want to read more? Click here for a free trial to Senior Living Business and download the current issue today