Launching a New Service Line in 2023?

Consultants outline considerations for 4 new home health service lines

With prospects for next year’s margins growing tighter, home health providers are looking for ways to boost profitability with home health service line expansions.

SimiTree financial consultants say it’s generally a good idea to diversify streams of revenue, but caution providers to look before leaping to avoid being blindsided by unexpected setup fees, unfavorable market conditions – or in some cases, the need for a new EMR.

“Launching some new lines of service can require a substantial investment upfront, from staff training to hefty new accreditation fees,” said Lynn Labarta, SimiTree’s VP of Post-Acute Revenue Cycle Management.

“It may not always pay to make that investment unless you have the infrastructure in place to support it. Do you have the right market conditions and referral connections? Do you have a fully trained and knowledgeable billing staff ready to make sure you see uninterrupted cash flow from your new service line from the start?”

Working with a knowledgeable coding partner may also be a key component of success under a new service line.

Some home health service lines, such as palliative care, require specialized coding knowledge. This is particularly important in light of new palliative coding revisions issued in November by the Centers for Medicare and Medicaid Services (CMS).

SimiTree offers resources to help

SimiTree consultants work with agencies to explore the many factors which are part of the decision-making process for launching new home health service lines, including an assessment of initial costs as well as an evaluation of necessary referral sources and existing resources.

A solid market analysis informed by market intelligence provided by SimiTree’s MAP (the Market Analysis Platform) can quickly fill in key details about market needs, referral sources, and competitors, bringing into sharper focus important considerations.

“The right data presented in a meaningful way makes all the difference when it comes to home health agencies and hospices focusing precious time and resources for the greatest impact,” said Christine Lang, Director of Data Analytics at SimiTree.

"Market data can help providers identify strong new referral partners, evaluate possibilities through the lens of crucial market intelligence, and decide whether to launch the new service line,” she said.

Four popular new home health service lines

Four types of home health services growing in popularity include: 

  • Home infusion therapy, which allows home health providers to monitor, educate, and provide skilled nursing services to patients receiving certain classes of drugs in the home 
  • The Acute Hospital at Home program, which allows home health agencies to provide higher acuity care to homebound patients 
  • Palliative care, which focuses on long-term symptom management for patients with serious and chronic conditions 
  • Therapy allowed to be provided to patients in their home by home health agencies under Medicare Part B

If your agency is considering one of these new home health service lines, the consultants at SimiTree advise taking a careful look at the considerations outlined here for each.

Home Infusion Therapy (HIT)


  • Upfront costs 
  • Billing knowledge 
  • Referral connections

Effective since Jan. 1, 2021, Medicare’s Home Infusion Therapy (HIT) benefit allows home health and several other types of providers to create a new service line around the provision of certain types of home infusion drugs.

HIT covers professional home health service lines such as skilled nursing, patient monitoring, and patient education – services not otherwise covered under the Durable Medical Equipment (DME) benefit.

One of the first considerations for agencies considering HIT professional services is to determine whether existing or potential referral partners are seeing patients who qualify for the specific types of infusion drugs which are administered under the benefit. The benefit covers certain anti-infective, subcutaneous immunotherapy, and highly complex intravenous infusion drugs.

“Do your referral sources have these types of patients, or do you have connections to the referral sources who do?” Labarta asked. “If not, does your sales and marketing staff have the bandwidth to pursue the connections you need? It will take a while to get established, so you will want to make certain you can justify the upfront expense while you build the business.”

Another consideration is cost. Special accreditation is required to become a HIT provider, and SimiTree consultants say many providers are surprised by the initial cost of the hefty accreditation fee required to offer professional services under HIT.

“If your agency is already accredited by CHAP or ACHC or another accrediting organization, you are not automatically eligible,” Labarta said. “A separate accreditation will be required for HIT.”

Once agencies are accredited and begin offering professional home health service lines under HIT, it is not uncommon to experience payment delays and denials due to billing issues.

Claims are frequently rejected due to a tricky enrollment process. Other issues include confusion about the need for a corresponding DME claim and misunderstanding about Medicare’s policies for G codes used for HIT. Duplicate billing is particularly easy for HIT claims, and often causes problems for agencies.

“Much of the confusion we see is around understanding what is and what isn’t covered,” Labarta said. “HIT only covers services that are not already covered by DME.”

Palliative care


  • Coding and billing 
  • EMR setup 
  • Symptom management vs. primary care

Palliative care is the provision of services to patients with serious, long-term illnesses. Although palliative patients may have terminal diseases, they differ from hospice patients because they do not have physician certification that they are expected to live less than six months.

The focus of palliative care is on symptom management and stress relief to improve patient quality of life, encouraging remission potential, and creating opportunities for advance care planning.

Home health providers are allowed to bill Medicare for providing palliative care under Part B Professional Services to recoup the cost of direct care.

“An excellent starting point is having a thorough understanding of what palliative care is and what it entails,” said SimiTree Clinical Operations Senior Manager Maureen Kelleher. “A common misconception is that it’s hospice lite.”

Optimized billing and coding are essential components for a successful palliative care program, SimiTree consultants say, and it can be helpful to providers to rely on knowledgeable outsourcing partners for needed expertise.

In addition, home health providers launching palliative services may need to consider using a second EMR specifically for the new line, as documentation and quality reporting requirements are much different for palliative care than for home health.

“The providers who have had more success with palliative care are the ones who have a separate EMR set up specifically to handle the different requirements,” Kelleher said. “Practice management systems may be less expensive than the ones for home health or hospice but have a wide range of options and costs.”

While Kelleher describes documentation requirements for palliative care as generally “less onerous” than for home health, she said successful agencies will need to excel in time management skills to provide effective palliative care.

Hospital at Home program


  • Medicare scrutiny 
  • Contract negotiations 
  • Coordination of care with hospital

Some home health agencies are subcontracting to hospitals to provide higher acuity, hospital level care to certain patients in the home. The Centers for Medicare and Medicaid Services (CMS) approved the Acute Hospital Care at Home program in November 2020.

Patients are admitted only from emergency departments or inpatient hospital beds, so the face-to-face encounter required for home health admission is replaced by in-person physician evaluation and screening protocols to assess medical and non-medical factors before care at home begins.

Once a home health provider is performing in the subcontractor role, the agency will send a registered nurse to the home to evaluate each patient daily. Remote evaluations may also take place. Two additional in-person visits will be made daily by either registered nurses or mobile integrated health paramedics. Visits are based on the care plan and on hospital policies.

Permission is required from CMS to participate in the Hospital at Home program as a subcontractor.

“Hospital at Home is a new but growing area,” said Charles Breznicky, SimiTree Director of Clinical Operations. “This means it is likely to become an area of increasing scrutiny and oversight as we move forward.”

Two of the important considerations for home health providers participating will be the contract negotiated as a subcontractor, SimiTree consultants say, and the agency’s effectiveness at care coordination. The latter will be particularly important because the home health agency will be functioning as an extension of the hospital managing the care and will need to effectively coordinate care within the policy framework of the hospital.

Outpatient Therapy at Home


  • EMR setup for billing

Medicare’s Conditions of Participation (CoPs) allow home health agencies to provide skilled physical therapy services, sometimes called Outpatient Therapy at Home, and be reimbursed under Medicare Part B.

“Many home health providers are opting to provide therapy under the home health license after the patient is discharged from home health,” said SimiTree Operations Consulting Director John Rabbia. “You’d want to discharge traditional home health first, then initiate Medicare Part B therapy.”

As with home health services, the patient will need a patient specific plan of care which is overseen by a physician who certifies that services provided are safe and effective for the patient’s condition. The plan of care must meet all Medicare specifications and requirements for outpatient therapy care plans.

While the patient’s primary problem must be complex enough to require the skills of a physical therapist, other requirements may not be as stringent as providers are accustomed to meeting for the provision of home health services. For example, neither an OASIS nor Face to Face encounter are required.

In addition, ICD-10 coding is significantly simpler, only requiring ICD-10 coding to represent the patient’s impairments such as weakness or difficulty walking. These codes are not billable as primary diagnoses under Medicare’s Patient Driven Groupings Model (PDGM).

One of the primary considerations for home health providers considering offering rehabilitative therapy under Part B is having the right EMR setup, Rabbia said. Most home health EMRs do not offer workarounds which meet billing requirements for the Medicare Physician Fee Schedule. Payment is driven by Current Procedural Terminology (CPT) procedural units rather than by home health’s episodic 30 day billing periods.

“Although some EMRs have more flexibilities than others, home health EMRs in general are not really set up for this,” Rabbia said. “Our clients have had the best luck with a separate EMR for outpatient therapy, which really isn’t as bad as it sounds. EMRs designed for physical therapy tend to be much more affordable and are much easier to set up, so having a second EMR is much less of a headache than what you might initially imagine.”

Hospital-based home health providers may have an advantage, Rabbia said. Ambulatory care modules can often be easily adapted to accommodate billing for outpatient therapy at home. See related article.

SimiTree can help

If your agency is considering a new home health service line, the consultants at SimiTree can help weigh the pros and cons and determine whether it’s the best move.

SimiTree MAP delivers the market intelligence needed for more informed decision-making. 

Our independent information technology consultants are not affiliated with any EMR companies and can help clients make the right decision regarding any EMR changes or adaptations needed.

The coding, billing, and collections outsourcing experts at SimiTree have the industry expertise and training to make certain agencies receive payment faster after launching new service lines, reducing startup hiccups that can impact cash flow. 

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