Senior living providers are missing out on valuable revenue opportunities. Here’s how to change that.
- Low reimbursement rates and looming Medicaid cuts mean senior living providers need to seek out new sources of revenue.
- However, the simplest way to do this often involves getting better at billing, revenue cycle management and maximizing the value received for the work you already do.
- To make more money from your senior living business, improve your billing and documentation processes, avoid common missteps that lead to underbilling and lean on advisory support to identify additional areas of improvement.
Faced with growing financial pressures, more senior living providers are looking to generate new revenue growth. But what many providers don’t realize is that some of the most valuable revenue opportunities may not involve adding new patients, but simply running your existing business more effectively.
What should you do to create more cash flow for your senior living business? Keep reading to find out.
Low reimbursement rates and Medicaid cuts are pushing more senior living providers to search for new revenue
Senior living providers across the country are feeling more financial urgency this year. In addition to rising costs and staffing constraints, one of the biggest drivers is that it’s simply harder to get paid enough for your work.
Many providers are noticing lower reimbursement rates than in the past. Complex billing and reimbursement processes and procedures are also increasingly hard to navigate, demanding more people, better processes and help from AI to do so.
Meanwhile, some senior living providers will also be affected by the roughly $1 trillion in Medicaid cuts that begin taking effect at the end of 2026. States with budget deficits, especially, may struggle to make up for the cutback in federal dollars and choose to move funding away from nursing homes.
All of the above makes finding new revenue even more valuable for many senior living providers. But where should you look?
What are the top missed revenue opportunities for senior living providers?
Most senior living providers have clear revenue opportunities they are currently missing out on. Crucially, this hidden revenue doesn’t involve adding more patients, but improving revenue cycle management, billing processes, clinical management and other process-related improvements that may be fairly simple to implement.
Key missed revenue opportunities include:
- Ineffective billing and revenue cycle management: Many senior living providers lack sufficient experience with billing and revenue cycle management, in part because there are no formal training programs that teach nursing home billing. This can result in slow collections due to ineffective internal processes or team members getting overwhelmed by trying to navigate complex insurance regulations without sufficient experience.
- Slow reporting: Nursing homes may also struggle with slow financial reporting, with financial statements frequently up to three months out of date. This makes it difficult to understand what’s happening inside your business and easier to miss that you’re leaving money on the table.
- Commingling adjustments and write-offs: Adjustments often get classified as write-offs, which means you miss out on any possibility of collecting on the adjustment balances. Any remaining payer balance needs to be evaluated to determine whether the payer made an error before adjusting off.
- Poor clinical documentation: Effective clinical management involves both accurately determining what a patient needs and fully documenting that care so you get paid for all of the services you provide. However, too many senior providers don’t properly document, which means not getting reimbursed for work that you’ve already done.
- Underbilling: Providers also may not always know what they are eligible to bill for, especially under Managed Medicare contracts and Medicaid. As a result, you could be paying out of pocket for costs like oxygen or transport that you should be getting reimbursed for.
However, many of these revenue opportunities can be unlocked with relatively little effort, boosting your cash flow and softening the financial pressure on your business. Here’s how to start.
How should senior living providers start taking advantage of more missed revenue opportunities?
Senior living providers can often notably increase revenue by taking action to shore up holes in procedures, processes, systems or training. While some of this work takes time, there is often low-hanging fruit you can implement fairly quickly.
Key actions include:
1. Train your team to use your systems more effectively
Whether you run your business on new or legacy systems matters less than whether your team knows how to use them effectively. Even a simple change like training your team to no longer commingle adjustments and write-offs in your accounts receivable system can generate more revenue at very little cost to implement.
2. Strengthen team communication
Make sure your team understands the billing opportunities that are available to you, as well as the importance of documenting everything for billing purposes. If you get everyone on the same page, less revenue will fall through the cracks.
3. Make targeted tech upgrades
Use new tech tools where an investment makes sense from an ROI perspective. For example, could you implement an AI tool that helps you discover new revenue opportunities in your EMR, like areas where you’re not currently billing that you could be?
4. Explore automation
Can you automate aspects of your billing process? This can exponentially reduce the amount of time you spend on billing work, while also speeding up your collections.
5. Increase your posted rates
Managed Medicare contracts typically state that they will pay out the lower of either your posted rates or their reimbursement rates. This means if your posted rates are less than the managed care reimbursement rate, you can quickly generate new revenue simply by raising your posted rates to more than the reimbursement rate.
6. Build up your strategic financial capabilities
Your accounting team may understand the day-to-day financial operations of your business, but many senior living providers lack higher-level financial awareness from a CFO or controller. You need someone on your team who understands the business of making money from a nursing home: Strategic planning, cost reporting, revenue cycle management, cash flow, KPIs and how it all fits together.
7. Seek advisory support
An advisory firm that knows the senior living business can help you identify specific ways to generate more revenue. The right advisor will understand both operations and revenue cycle management and be able to point to areas of improvement within your business where a change could deliver results.
8. Consider outsourced billing or financial leadership
An advisory firm can also deliver additional support in the form of an outsourced biller. This can be valuable because so few people really understand the ins and outs of nursing home billing, so an outsourced biller can often generate more cash simply by billing more effectively for the work you are already doing. Using an outsourced biller also eliminates the risk of making a significant investment in training an in-house biller, only to watch them quickly leave for a better offer.
For higher-level financial leadership, you can also lean on an outsourced CFO or controller. Someone in this role will understand how your business works and be able to figure out how to more efficiently grow your revenue.
How Wipfli can help
We advise senior living providers on growth, revenue cycle management, performance and technology. Let’s talk about how we can help you generate more revenue from the work you already do, including by providing outsourced billing support. Start a conversation.
Let’s help you generate more revenue
