Blog

Starting an Adult Day Services Program: 3 Funding Options You May Not Have Considered

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:

1. 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.
2. 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.)
3. 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.