By Nick Lamb

Home-based care providers are facing a perfect storm in 2025. Even with modest improvements in operating margins last year, financial stability remains elusive as administrative costs continue to climb at every level of the healthcare system. For example, industry data suggests that administrative overhead now makes up more than 40% of total hospital expenses, and home healthcare is no exception, seeing a 10% increase in home health costs.

Labor and drug costs are further straining the system. Analysts warn that providers risk significant financial setbacks without proactive cost control and strategic investments, particularly in areas like revenue cycle management (RCM). For home health and hospice agencies, reimbursement complexities and rising administrative costs pose formidable challenges. Many providers are turning to outsourced RCM as a strategic solution to combat these hurdles, improve revenue stability, streamline operations, and enhance patient care.
Focus on patients, not paperwork: Reducing administrative overload
Home health and hospice agencies often struggle under the weight of complex RCM. In-house RCM requires specialized expertise in billing, coding, claims processing, and compliance—where even minor errors can lead to denied claims, delayed payments, and ballooning administrative costs. Staying on top of ever-changing technology, payer negotiations, and regulatory compliance further strains already limited resources. This administrative burden takes clinicians away from patient care and impacts the bottom line.

Outsourcing RCM offers relief. By entrusting these intricate processes to specialized RCM providers, agencies free up their clinical teams to focus on what matters most: patient care—no more wrestling with billing errors or appealing denials. The result is a more predictable and consistent revenue stream. Additionally, partnering with an RCM provider eliminates the costly and time-consuming task of recruiting, training, and retaining qualified RCM staff in a system plagued by staffing shortages. This provides operational stability and allows agencies to redeploy internal resources to mission-critical areas.

Drive financial performance: Faster reimbursements, stronger cash flow
Home-based care providers know the challenge of operating with tight margins. Delayed reimbursements can create significant financial strain, impacting their ability to deliver the best care. Partnering with a dedicated RCM provider offers a solution. These specialists accelerate cash flow by streamlining the entire revenue cycle, from claim submission to payment receipt. Their expertise in automation and analytics allows them to catch potential errors early, preventing costly denials and ensuring compliance.

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