Starting an Adult Day Services Program: 3 Funding Options You May Not Have Considered
Posted On April 2, 2018
A lot of people with whom I speak about opening an Adult Day Health Care Center, focus only on the Medicaid reimbursement- not knowing that there are other avenues of reimbursement streams available. Although Medicaid reimbursement may end up being your center’s primary income source, diversifying revenue is vital to a center’s long-term success. Below are three more revenue streams you may not have considered:
- Veteran’s Administration
- In general, in order to receive funds from the Veteran’s administration, your center will, at a minimum, need at least a full-time RN on the center premises daily.
- A contract with the VA is required.
- The VA may have differing requirements for staffing and site than the regulations of your state require, be sure to check these when determining if your center will have a contract with the VA.
- The VA may pay more per participant/per hour than Medicaid reimbursement for the same.
- Private Pay
- This is one area of income, that in my experience, has been vastly undervalued. I can’t stress enough, when opening an Adult Day Program, to plan for this source of revenue. There is a massive untapped market need for serving those who do not receive Medicaid– and who need the services of an Adult Day Program.
- It may be less expensive to run a “social” day program within the Adult Day Health Care Program as you don’t have to follow the “certification” regulations, only the licensing regulations, which will generally have fewer professional staffing requirements.
- Create a fee structure. Because a center only has to follow licensing regulations and not certification, a center does not have to follow the Medicaid reimbursement structure either. I’ve helped centers develop membership, hourly and daily reimbursement structures. I’ve worked with centers to develop add-on services to their private pay participants based on the participant’s activities of daily living (ADL) and personal needs (such as showers, transportation, salon services, etc.)
- Long-Term Care Insurance
- Adult Day Services are covered by long-term care insurance.
- If you have a participant who is private pay, ask if they have this type of insurance during the center tour, or your first contacts.
- Use the fact that long-term care insurance is a payer for Adult Day Services as a marketing tool.
- For long-term care insurance reimbursement, you will bill the participant, and they will receive reimbursement from their long-term care insurance carrier.