Healthcare providers are heading into another year where financial uncertainty remains a top concern. While many for-profit and nonprofit organizations reported improved margins in 2024, industry analysts warn that rising expenses and process inefficiencies could put those gains at risk. Home-based care agencies, in particular, continue to face workforce shortages, changing reimbursement structures and administrative challenges – making revenue cycle management (RCM) a critical tool for financial stability.
The Case for Outsourcing RCM
Billing, coding, claims processing and compliance require deep expertise and constant adaptation to evolving regulations. Many agencies struggle to keep up, especially with staffing shortages and payer rules frequently shifting. The administrative workload can slow down revenue collection and divert attention from patient care.
To address these challenges, many agencies are looking to protect margins without compromising care quality by outsourcing RCM to specialized providers. This partnership allows home-based care organizations to reduce administrative costs, improve cash flow and maintain billing accuracy at a time when reimbursement rates are under pressure.
Reducing Claim Denials and Accelerating Reimbursements
Denied claims and delayed payments continue to be a major challenge for home health and hospice agencies. Coding errors, incomplete documentation and compliance issues can trigger denials, disrupting cash flow and creating extra work for staff. A specialized RCM provider helps prevent these setbacks by streamlining claim submissions and ensuring higher acceptance rates.
One example of this in action is GrandCare Health Services, a home health provider that improved its revenue cycle performance through outsourcing. The organization experienced difficulties with managing claims, particularly with Medicare and Medicare Advantage payers. After outsourcing its RCM, GrandCare saw fewer denials, more predictable cash flow and a reduction in uncollected revenue after 60 days from 5.6% to 3.6%.
Relieving Administrative Overload
Managing RCM requires dedicated staff with a strong understanding of payer policies, compliance rules and coding updates. Hiring and retaining these professionals is an ongoing challenge, especially as administrative costs rise and staffing shortages continue to impact healthcare.
By outsourcing RCM, agencies can shift internal resources back toward patient care. GrandCare, for instance, reduced its in-house RCM team from five employees to just one overseeing the process – redirecting other staff to focus on eligibility verification, authorization approvals and specialized cases. This change allowed the organization to improve their workflow without losing financial control.
Strengthening Financial Stability and Supporting Growth
With already tight margins in home-based care, maintaining financial health is critical for long-term success. RCM partners bring automated tools, proven best practices and data analysis that help agencies optimize their revenue cycle performance. Identifying claim patterns, tracking trends and addressing billing inefficiencies can significantly improve an agency’s bottom line.
Outsourcing also gives agencies flexibility as they grow. Instead of expanding internal billing departments to handle more claims, they can rely on RCM partners to scale with their needs. Looking again at GrandCare, the company shifted its approach from chasing outstanding balances to proactively preventing payment delays. Working with a more efficient revenue cycle process, it now aims to collect over 90% of non-Medicare balances within 60 days and 99.5% of Medicare balances within the same time frame.
Improving Cash Flow Management
RCM isn’t just about reducing denials – it also provides better visibility into cash flow. Agencies working with specialized RCM partners get access to analytics and reporting tools that track payment trends, flag bottlenecks and create better collection strategies. Monitoring key metrics like denial rates and days in accounts receivable helps providers make informed financial decisions that support their long-term financial stability.
Preparing for Future Payment Models
With payment models shifting toward value-based care, home health and hospice providers must ensure their revenue cycle processes align with evolving requirements. This includes tracking patient outcomes, managing bundled payments and meeting new quality reporting standards. RCM providers that specialize in home-based care have the expertise that agencies need to navigate these changes and maximize reimbursement opportunities.
Keeping Up with Regulatory Changes
Payer rules and healthcare regulations are constantly changing, creating risks for agencies that don’t stay ahead of compliance updates. Billing errors or documentation gaps can lead to audits, penalties and reimbursement delays.
Experienced RCM partners actively monitor regulatory changes, ensuring that agencies stay compliant and avoid costly setbacks. For home-based care providers, this oversight is essential as reimbursement structures continue to shift.
Looking Ahead: Why RCM Matters in 2025
With no reduction of financial pressures in sight, home-based care agencies must continue refining their revenue cycle operations. Outsourcing RCM is proving to be a practical way to manage costs, improve billing efficiency and maintain a strong focus on patient care.
As more providers reassess their financial strategies, building a structured and efficient revenue cycle will be key to their future stability. Agencies that take a proactive approach to managing claims, optimizing reimbursements and improving financial transparency will be in the best position to succeed in the coming years.
About Meghan May
Meghan May brings over 10 years of experience in the healthcare software industry to her role as the Senior Manager of Client Success, TES at Homecare Homebase. She works tirelessly to build partnerships with clients utilizing HCHB Services by helping strategize and ensure each client is receiving the full value of the services offered. Meghan’s previous roles at HCHB as Operations PMO Manager, Senior Project Manager and Implementation Consultant serve as a foundation of expertise in Homecare Homebase’s EHR capabilities, allowing her to offer innovative solutions to solve client needs.
