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Can home health care centers survive the challenges of 2020?

2020 is a year that has tested businesses in every marketplace. The home health system is no exception. This niche area of health care has had to navigate many issues throughout the year, some novel, some that have been building over the years. Two of the most notable include dealing with the decision by the Centers for Medicare and Medicaid Services (CMS) to eliminate home health pre-payments and addressing the current coronavirus pandemic.

CMS removes major source of funds for home health centers

This first example is one that has been slowly brewing over recent years. The CMS recently decided to eliminate home health pre-payments. The agency began phasing out these pre-payments, also known as Requests for Anticipated Payment (RAPs), within its 2020 home health payment rule. The agency has stated its ultimate goal is to eliminate the RAPs completely by 2021.

This makes it even more difficult for smaller operations to deal with one of the home health care system's biggest issues, cash flow.

Larger businesses will likely weather this change. This is because the larger the business, the bigger the cash flow. As such, these larger home health care organizations may be able to absorb the removal of RAPs. Smaller businesses may consider merging with other local businesses or a joint venture to provide the capital needed to survive these changes.

Home health agencies must also navigate the current pandemic

As if dealing with a shortage of funds was not enough, these health care facilities must also address the coronavirus pandemic. This means the need for increased personal protective equipment to help reduce staff's risk of exposure as well as having plans in place to help provide coverage and support in the event staff test positive for the virus. Both of which put a further strain on resources. To survive, these businesses will likely need to take advantage of federal programs as part of their plan to address any cash flow issues.

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