Mistakes that Can Put Your Agency Out of Business and How to Avoid Them

06/03/23-Operating a home health or personal care agency can be very rewarding if you and your staff know what you‘re doing. If you don’t know exactly what your job entails as a leader, administrator /owner, then you’re headed down the road of closure.

There are many agencies throughout the United States that are in jeopardy of closing because the Administrators, Managers, or Owners have no clue about how to operate a home health or home care agency. Their main focus is “greed”, how can I get my hands on “Free money from the government”? Surprise, there is no “Free Money”. Medicare/Medicaid Reimbursement is based on agencies providing Quality care to people who are in need of their services.

According to CMS Comprehensive Error Rate Testing (CERT), billing errors from home health agencies account for a loss of $41.1 billion from Medicare each year. And for the past three years, more than $130 billion.

Other Mistakes Agencies Make that can close your agency forever are:

  1. Poor Documentation of Care- When Surveyors cite an agency for poor documentation this indicates staff may not have been trained properly. Charts have not been audited by GB, and Clinicians on a quarterly basis. As the person in charge, it is your responsibility to make sure that all patient charts have proper documentation of care from all clinicians or caregivers. Do your own chart audits to be sure your staff is following proper guidelines and regulations related to documentation.
  2. Not knowing what your position entails- If you are new to your leadership position, you will find it difficult to know and understand all the tasks you must accomplish each day to be sure your agency operates properly. Therefore, if you don’t know what your job description is, get assistance from a home health or homecare consultant.
  3. Not having a care plan for each client- this goes with documentation. For Personal Care agencies it is the responsibility of management to check the charts on a quarterly basis for care plans and to be sure the PCW is following the care plan as ordered. All changes have to be initialed or noted by the consumer. Make sure the Plan of care is signed by the Supervisor, Client, and PCW and dated by all three every time there is a change with the POC.                                                                                                 For Home Health Agencies, it is a part of the licensed Clinicians to make sure the Plan of Care is correct, and up to date. The Patient and CNA must inform the Clinician if there are any changes to the POC that the Clinician is not aware of. There is no excuse the healthcare professional must be aware of any changes with the Plan of Care.
  4. Taking on a client your agency is not able to care for is a definite way to close your agency. There are so many Administrators that take on clients they don’t know how to care for. Their staff are not properly trained in the care or needs of their clients. The complexity of the client’s case is way beyond the agency’s scope of practice. Here is a great bit of advice. Please do not take a client if you cannot care for this client properly. If you do take a client that is beyond your scope of practice, you are opening your agency up for a huge lawsuit. The lawsuit can shut you down, Medicare/Medicaid, and the state in which you operate will pull your license and accreditation forever. Remember you could jeopardize your Clinician’s license as well.
  5. Too much Expenses- When starting an agency don’t try to go for the glitz and glamour! Keep It Simple to start out and as you become successful, then go for a more polished look. Be careful though! CMS does not take too kindly of agencies putting too much money on the agency rather than paying for good quality staff, and supplies.

A year after being in business and operating my consulting business from home, I moved my business to an office. I spent a total of $400.00 to furnish my business and it looks great!!!! I shopped at yard sales, second-hand stores, and Craigslist to find the bargains to fit my budget. I know of another consultant that spent $3,000 in furniture, and equipment. Her overhead was enormous. She started out with staff as well. Within 9 months she had to break her expensive lease and lay off her staff. She now has a part-time office manager and sold most of her office furniture also. So be careful!

  1. Last, Not Having a Plan for Growth- In the leadership Workshop that I conduct, I talk about creating a system to grow a successful business. If you don’t take the time to write out a 1–2-page business plan for your own purpose (not the financial investors), you will not know in what direction to grow your agency 1 year from now, 3 or 5 years from now. What will happen to your agency if something happens to you? Will it continue on or will all the hard work you put into your agency be lost because no one was put into place to keep the agency going, or even know how to operate the agency? I won’t even mention the financial problems that will arise from the lack of planning for the future.

So, there you have it Mistakes that Can Put Your Agency Out of Business and How to Avoid them. Good luck!

To Your Success!

Sharron