-
5 Hidden Money Leaks in Your Home Care Agency—and How to Plug Them
Running a home care agency isn’t just about delivering quality care—it’s about keeping the business side airtight. Margins are already thin in this industry. A few unnoticed inefficiencies can quietly drain tens of thousands a year.
Let’s break down five of the most common—and most expensive—money leaks agencies face, with practical steps to plug them.
1. Caregiver Turnover: The Silent Profit Killer
When a caregiver leaves, the cost isn’t just another job posting. You absorb recruiting fees, onboarding time, and unfilled shifts that ripple through client satisfaction. High churn also puts you at a disadvantage in payer audits, where continuity of care is scrutinized.
How to plug it:
- Pay structure: Tie incentives directly to tenure (90-day bonuses, retention milestones)
- Data-driven scheduling: Track last-minute shift declines and burnout signals before they become exits.
- Culture feedback loops: Run quarterly “stay interviews” to surface issues before they push people out.
Pro tip: Agencies that cut turnover by just 10% often see double the savings compared to wage increases of the same size.
2. Claims Denials: The Revenue Black Hole
Every denied claim is care delivered but revenue delayed—or lost. A 5–10% denial rate is common, but many agencies accept it as the cost of doing business. It isn’t.
How to plug it:
- Eligibility: Pre-check eligibility before the first visit.Some agencies with a lot of Medicaid clients check every day.
- Resubmitting: Don’t just resubmit—track denials by payer, service type, or clinician.
- Escalation protocol: Process remittance advice within a day of receiving it. Then rework denials within 48 hours or before the next submission cut-off. That speed keeps cash flow intact.
Pro tip: Reducing denial rates from 10% to 5% can add back a full percentage point to your margin.
3. Manual Processes: The Time Sink
If your agency is still running on spreadsheets, you’re bleeding hours. Manual visit logs, timesheets, and payroll adjustments aren’t just slow—they’re error magnets.
How to plug it:
- Deploy and all-in-one platforms: Use software that integrates scheduling, EVV, and billing. If you don't have it, Ankota can help
- Train caregivers: Your caregivers should use mobile apps for clock-in/out and documentation - real-time data beats retroactive fixes.
- Eliminate double entry: If your staff enters the same data twice, you’ve designed the workflow wrong. Talk to your software vendor about creating electronic claims, or creating a payroll format that you can directly upload into your payroll system.
4. Financial Inaccuracies: The Audit Trap
Billing errors, mismatched service codes, or misapplied overtime rules aren’t just bookkeeping mistakes—they can trigger audits, clawbacks, and compliance violations.
How to plug it:
- Automate billing calculation: Align billing codes with service codes (e.g., CPT codes) in your system - make sure that billing is always calculated automatically.
- Automate: Use software with built-in compliance alerts (e.g., overtime thresholds, authorization caps).
- Practice: Run monthly mini-audits. It’s cheaper to find mistakes yourself than to let a state inspector do it for you..
5. Scheduling Inefficiencies: The Domino Effect
Poor scheduling isn’t just an inconvenience—it cascades into overtime costs, caregiver fatigue, and client attrition. If caregivers spend more time driving than caring, you’re paying for inefficiency.
How to plug it:
- Goals: 1) Fill shifts, 2) Optimize caregiver desired hours, then 3) Optimize (see points 2 and 3)
- Avoid scheduling Overtime: There's a strong likelihood that your agency has caregivers who are seeking more hours
- Distance: Take driving distance into account or use route optimization tools when care staff see more than one client per day.
Your 5-Step Fix Plan
Step What to Do Audit Map current churn, denial rates, and manual hours wasted. Prioritize Start with the leak costing you the most today. Invest Adopt tools that solve multiple leaks (scheduling + billing + EVV). Train Don’t skip adoption—people need to see the “why.” Monitor Track metrics monthly to prove ROI and refine.
Final Takeaway
Home care agencies don’t fail from one big mistake—they bleed slowly through hidden leaks. Plugging caregiver churn, denials, manual inefficiencies, financial errors, and scheduling gaps isn’t busywork—it’s margin recovery.
Picture this: lower turnover, faster reimbursements, fewer compliance headaches, and caregivers who actually want to stay. That’s not a dream—it’s the payoff of running a tighter ship.
Call to Action
If same-day visits or complex billing are pain points for you, let’s talk. Ankota helps agencies stop revenue leaks and scale sustainably. Click here to get in touch!
Ankota's mission is to enable the Heroes who keep older and disabled people living at home to focus on care because we take care of the tech. If you need software for home care, EVV, I/DD Services, Self-Direction FMS, Adult Day Care centers, or Caregiver Recruiting, please Contact Ankota.
Your Comments :