Curbing Transportation Costs

Curbing Hospice Transportation Costs SimiTree

Fuel pump prices prompt agencies to seek new ways to pump up morale, keep staff on the road

Fuel costs are driving new frustration for agency leaders fighting to retain staff, improve job satisfaction and build overall morale. SimiTree consultants offer some pointers.

Fuel costs hovering around the $4 per gallon mark for most of the country (significantly more in some locations) are charting a challenging course for home health and hospice agencies navigating the staffing shortage.

With no way to predict the trajectory of gas prices, agency leaders are worried the worst may be down the road as vacation season accelerates travel. Increased demand from vacationers could push prices at the pump even higher, driving a new round of resignations from road-weary clinicians who say they can’t afford transportation costs associated with providing care in the home.

“Gas prices typically increase in the spring and summer anyway, due to higher demand. Everyone is just a little nervous about what that could mean as we head into the season with prices this high,” said Laura Wilson, SimiTree Managing Director for Clinical Operations Consulting.

“The cost of fuel right now and uncertainty about what could be next is sending the message that it’s time for us as an industry to re-evaluate how we reimburse for transportation,” Wilson said.

Is 2.5 cents worth it?

There’s no industry standard for home health and hospice mileage reimbursement. Some agencies provide a fleet of cars to field some or all their care team workers. Some pay mileage instead. Of those who pay mileage, some match the IRS standard and others pay a variety of rates.

A new, higher IRS standard took effect at the beginning of the year. Mileage rates for business purposes increased from 56 cents per mile in 2021 to 58.5 cents per mile at the beginning of 2022.

But the IRS standard was based on fuel costs and other factors calculated prior to Russia’s invasion of Ukraine in March. The attack prompted record-breaking prices at the pump over the next few weeks. Fuel prices jumped to more than 25 cents above February prices, $1.31 per gallon higher than the same time period in 2021. The spike in price shattered a previous record of $4.10 per gallon from just before the financial crisis of 2008. Since then, the release of millions of barrels of crude oil from the Strategic Petroleum Reserve helped stabilize skyrocketing gas prices, and a new COVID-19 lockdown throughout China has lessened the worldwide demand for gas. It’s impossible to predict whether or when prices will rise again.

And there is widespread concern that the extra 2.5 cents per mile approved by the IRS this year isn’t enough to offset the current cost of filling the tank.

With agency morale running on empty, and agency leaders looking for ways to curb costs and retain staff, SimiTree consultants shared some of the best and most creative approaches they’re seeing among clients.

Gas card advantages and disadvantages

One of the most common attempts to ease pain at the pump for health care workers is the distribution of gas cards. While some agencies just hand them to care team members, others have tied gas card distribution to weekly office drawings, contests to “guess the number of jellybeans” and other limited distribution tactics.

“I had one client who offered gas cards to anyone who completed all their documentation on the same day as the visits for two weeks,” said SimiTree Clinical Consulting Senior Manager Maureen Kelleher. “I haven’t heard back yet how that went.”

Judy Connelly, another SimiTree Clinical Consulting Senior Manager, cautions that gas card distribution can inadvertently create an additional workload for busy agencies.

“I’ve seen agencies using mileage-based gas cards in the past,” Connelly said. “While I don’t recall the specifics of the process now, the value of the card was based on mileage, and it required supervisory oversight to evaluate aberrancies in comparison to previously recorded mileage. The agency also had to make certain the cards distributed were redeemable at gas stations within the service area.

“It was a lot of administrative work,” she said. “It was easier to just provide a bonus in pay.”

Another word of caution to agencies handing out gas cards: Make certain your employees know that gas cards may constitute renumeration for work, and as such may need to be reported as taxable income.

Market-based adjustment

SimiTree consultants appreciate agency creativity, but they say overall morale is best served by a reimbursement system that recognizes market fluctuation.

“There’s room for creativity but adjusting the mileage rate or travel reimbursement based on the market really is critical,” Wilson said.

Wilson said she worked in the past with an organization that used the AAA website as a benchmark for gasoline prices, making adjustment in reimbursement at the first of each month.

“The staff loved it because it was based on a visible number and addressed a real issue,” she said.

Connelly recounted a similar experience at an agency with a policy requiring quarterly adjustments to mileage/reimbursement based on the average cost per gallon of fuel during the previous quarter.

“The CFO sent an email to all staff each quarter indicating executive leadership support and awareness,” Connelly said. “This became routine practice. The staff loved it and felt appreciated – even when reimbursement went down or stayed the same.”

Mileage considerations for rural areas

In agencies serving rural areas, the issue of transportation cost can be exacerbated.

Most agencies do not pay mileage from the clinician’s home to the first visit of the day, or from the last visit back to home.

“This is considered driving to and from work,” said Lisa Brochey, one of SimiTree’s team of qualified Interim Managers who help clients maintain peak performance during times of transition. “But for those clinicians seeing patients in rural areas, this can mean high travel mileage to the first visit.“

Brochey suggests agencies consider paying mileage after the first 40 miles (or the distance the agency believes to be fair) for both the trip to the first visit of the day and the trip home from the last visit of the day.

Brochey suggests agencies also consider offering similar reimbursement to per diem staff who must travel farther to see patients.

“In most cases, per diem staff don’t get paid for mileage. Agencies may want to offer an enhanced rate for those traveling a certain, pre-determined distance daily or weekly,” she said.

Curb mileage with these tips

Here are a few of the SimiTree team’s recommendations for helping curtail unnecessary mileage.

Limit trips to the office. Are your clinicians still driving to the office each day? Save mileage by allowing them to skip checking in at the office before heading out for the first visit of the day. Look at alternative ways to provide necessary supplies, from drop shipping to setting up designated days and times for pickup of necessary items.

“You can decrease clinician trips to the agency by setting up meeting points for assigned office staff to deliver needed items such as SOC packets, paperwork, car stock, therapy supplies and more,” Brochey said. “Set up the meeting point so that it’s on the way to or from work.”

And go virtual. In-person meetings just aren’t necessary, SimiTree consultants say.

Use telehealth. Going virtual includes virtual visits for patients. Telehealth offers numerous benefits beyond curtailing travel costs, SimiTree consultants say. Virtual visits increase interaction with the patient, improve patient outcomes and satisfaction, improve productivity by reducing time on the road, and boost agency morale by allowing clinicians a little taste of the work-at-home club.

“While workers in other industries were working at home during the pandemic, our clinicians didn’t have that same luxury,” Wilson said. “Why not allow them day a week to work from home, conducting virtual visits? It’s both a retention strategy and a means of cost-saving.”

Virtual visits must be included in the plan of care for the patient and can’t be used in place of regular home visits, Wilson cautions.

“Virtual visits aren’t billable, but we can easily demonstrate to agencies how to get the full ROI on it,” Wilson said.

Smarter scheduling. If your agency hasn’t made scheduling changes to address fuel costs this year, it’s time to look at efficiency. Teach clinicians how to plan visits with as little mileage as possible, including consideration for time of day, geographic location of patients, routes used to access patients and more. Apps can be added to many EMRs to help with this, and smart phones offer apps as well.

Consider confirmation calls. To avoid unnecessary trips, most agencies rely on a confirmation call to the patient the night before a scheduled visit. It may be helpful for clinicians to add a second, “I’m headed your way!” call to the patient before beginning the drive.

“There’s always a chance something occurred with the patient between the time of the confirmation call the night before and the time of the scheduled visit,” Brochey said. “The patient may have forgotten about an MD visit, or had to go to the ER. Anything could have happened, and a quick phone call can save a long, unnecessary drive.”

Make the tank go farther

It’s common practice for clinicians to sit in their cars to make notes or close out documentation in between visits to patients – and in many parts of the country, that means an idling engine with the air conditioner providing some relief on warm spring and hot summer days.

But clinicians may want to reconsider that habit, turning off the engine, because an idling engine burns gas quickly.

Here are a few other gas-saving tips SimiTree consultants recommend agencies share with their clinicians. Most are from the GasBuddy travel and navigation app.

Fill up on Mondays. Studies by Gas Buddy found that the average price across 30 states was lowest on Mondays in 2019, 2018 and 2017. The study also found that weekends were the most expensive time to fill up. Prices were highest on Fridays and Saturdays. Sunday was the third worst day to fill up.
Pay with cash or use a card that offers rewards. Some gas stations offer discounts of a few cents for customers who pay with cash rather than a card. However, using a card that offers rewards for gas purchases may offset the discount.
Keep weight in the car light. Leave those heavy boxes of files at home and remove the bicycle rack. Extra pounds decrease gas mileage.
Make sure tires are fully inflated.
Perform routine maintenance such as oil changes. Respond promptly to “check engine” notifications.
Keep foot off brake while driving. Accelerate and deaccelerate smoothly, driving slowly.

SimiTree can help

SimiTree offers the full clinical, financial, and operational resources and expertise your agency needs to become stronger and healthier overall. Some of the ways we can help in your agency’s quest for accountability include:

Operational assessments to identify your agency’s weaknesses and develop a plan for shoring up efficiency and profitability.
Interim management services to ensure peak performance during times of transition.
Leadership development services to help empower your team for stronger performance, direction, and management.
Technological project management to help your agency create a dashboard for tracking accountability.

Use the form below to contact us today and let’s start the conversation about what we can do for your organization.