How Do Home Care Agencies Make Payroll While Waiting on Medicaid?

Measuring the gap between visit, claim and payment, payer by payer

The lag that matters to payroll runs from the day a caregiver is paid for a visit to the day the payer’s money for it is in the bank. It splits into five dates, each with a record and an owner:

• Date of service and payday, from the visit record and the payroll register. The caregiver is paid whatever happens to the claim.
• Visit verified: the day the visit’s EVV record had no open exceptions. The office manager or scheduler owns the days before it.
• Claim sent, from the billing software or the clearinghouse log. The biller owns the days after verification, including any wait for a monthly batch.
• Claim accepted or rejected, from the clearinghouse report or the payer’s acknowledgment. A rejected claim returns to the biller while the days since the date of service keep counting.
• Paid and deposited: the payment date on the remittance, electronic or paper, then the deposit date on the bank statement. The payer owns the days from acceptance to payment.

Take the last full quarter and record those dates for every claim, with fee-for-service and each MCO as separate payers. For each, work out the median days from payday to deposit and the dollars rejected, denied or paid short. A fast plan and a slow plan need two lines in the payroll plan; an average of the two hides the slow one. Illustrative example: claims to one plan leave 9 days after the average visit, on the caregivers’ payday; the plan pays 21 days later and the deposit lands 2 days after that, a lag of 23 days from payday to cash. The numbers are invented; the agency’s own are in its remittances and bank statements.

Why EVV mismatches deny or hold Medicaid claims

Section 12006 of the 21st Century Cures Act, codified at 42 USC 1396b(l), cuts a state’s federal Medicaid share unless the state requires EVV. CMS puts it this way: Section 12006(a) “mandates that states implement EVV for all Medicaid personal care services (PCS) and home health services (HHCS) that require an in-home visit by a provider.” The statute lists the six EVV data points: the type of service, who received it, the date, the location, who provided it, and the times it began and ended.

Each state decides how a claim is checked against the visit. Pennsylvania’s Department of Human Services says: “PCS claims submitted without a matching EVV visit will be denied.” Arizona’s Medicaid agency, AHCCCS, began hard claim edits on January 1, 2023, and its billing FAQ says providers “may experience a delay in payment if the required EVV information is missing or incomplete.” Its billing checklist matches each claim to a visit in “verified” status on payer, provider, member, service, date of service and units, and a claim with more units than its visits fails.

A mismatch needs no big error, only one field that differs between two records filled in by two people. Arizona’s published guidance and the federal prepayment review name the checks that stop a claim:

• A missing clock-in or clock-out, or an unknown client: exceptions fixed by correcting the visit and sending it again.
• An unscheduled visit, or a start more than an hour after the schedule, that nobody acknowledged with a reason code.
• More units billed than the verified visits hold, such as the scheduled shift billed after an early clock-out.
• A service on the claim that differs from the one recorded at the visit.
• An overnight visit billed under its end date. The FAQ says “Claims are matched based on the date the service began.”
• A visit fixed and billed the same day. The checklist says claims billed on the day of a visit update “may not pass claims validation.”
• Eligibility that lapsed, or hours above the authorization.

Each one can be caught in the office before the claim leaves, and several start there: a visit corrected in one place, a claim built from the schedule, a batch sent before a fix reached the state’s system. Other states use other systems and edit rules, and the state’s own EVV billing guidance is the version that applies.

Fixing EVV mismatches before the claim goes out

The cheapest denial is the one that never leaves the office. Before every claim batch, one owner for each step:

• The office manager clears the EVV exceptions report, entering each fix with the state’s reason code and a note where one is required. Arizona’s December 2022 notice: providers “can still get paid as long as the missing data is entered into the system or reconciled by the agency administrator through the visit maintenance process.”
• The biller matches the batch to the verified visits on client, service, date and units, and never bills more units than the visits hold.
• Visits corrected today are billed no earlier than the next business day where the state asks for that wait, as Arizona’s checklist does.
• Nobody edits visit times to fit the authorization. Arizona’s FAQ says adjusting visit minutes “to simply accommodate the authorization limits is not allowable because it violates documentation requirements for audits.”
• The biller checks eligibility and authorization for the dates in the batch, so a lapse shows up before the claim and not on the remittance.
• Anything held back goes on the stuck-claims list with its reason.

The owner reads one number a week from this step: the dollars held back from the last batch because visits were not verified, and the age of the oldest. If it grows month over month, the fix is at the visit, in clock-in habits and in schedules that match authorizations, not in billing.

Planning weekly payroll when Medicaid pays for last month’s visits

Payroll runs on the agency’s calendar; the state and the plans pay on theirs. Pay frequency is set by state law and the agency’s policy, a question for counsel, and the payday does not move when a claim is held.

For one payer, the cash between the two calendars, the float, is the weekly payroll cost of its clients’ visits, taxes included, times the weeks from payday to that payer’s deposit. Illustrative example: clients under one MCO receive 1,000 caregiver hours a week, billed at an illustrative $25 an hour, or $25,000 a week, with wages and payroll taxes of an illustrative $19,000. At the 23-day lag above, about $62,000 of payroll is paid out ahead of that plan’s money at any time. Billed once a month on the 5th instead of weekly, the average visit waits about 20 days for its claim instead of 9, and the float grows by about $30,000. The numbers are invented; the method is not.

Then a 13-week cash plan, one row per week:

• Payroll out on every payday, at full amount.
• Expected receipts by payer: the claims sent one measured lag earlier, times the share that payer paid in full last quarter.
• Private-pay invoices and long-term care insurance claims on their own lines, at their own measured days.
• Stuck claims, entered only once someone has a confirmed payment date.
• The running balance, and its lowest point in the 13 weeks.

The lowest point is the cash, reserve or credit line the agency needs, taken from its own lags rather than from the worst month anyone remembers. Each Friday, set the actual deposits beside the plan; a payer two weeks behind its line gets a call that week from the person who owns it. Shorten the agency’s own days before financing the rest, since that part needs no borrowing.

Which claims are stuck, and who follows up with each MCO

A claim not paid inside its payer’s lag is stuck in one of five places: held before sending, rejected, accepted and pending, denied, or paid short. One list, updated every Friday, one row per claim or batch, with client IDs and no care details:

• Claim or batch number, payer, client ID, dates of service and amount.
• Status, and the reason as the payer or the state’s EVV system gave it.
• Days since the date of service, the payer’s filing limit and the days left. For fee-for-service, 447.45(d)(1) has the state require claims within 12 months of the date of service, and the state’s provider manual says the limit it applies and how a resubmitted claim counts; for an MCO, the provider agreement and the plan’s manual say what applies.
• Owner, next action and its date, then the date resent and the date paid. A row closes on payment, not on resubmission.

Sort by days left, then by amount. A rejection and a denial are different queues: a rejected claim was turned back before processing and is corrected and sent again, while a denied claim was processed and refused and is corrected or appealed under the payer’s rules. Each MCO gets one named owner in the office who knows that plan’s provider services line, portal and corrected-claim rules, and who calls with claim numbers in hand; Arizona’s checklist tells providers to “mention EVV to ensure your request is routed appropriately.” Every Friday the agency owner reads three totals: dollars held before sending, dollars rejected or denied and not yet resent, and dollars accepted but past the payer’s lag.

What each week of delay costs in cash

A week of added delay on one payer costs four things, and interest is only one of them. In the illustrative example:

• Cash: one more week of that payer’s payroll, $19,000, tied up for as long as the longer lag lasts.
• Carrying cost: at an illustrative 10 percent a year, the $62,000 float costs about $6,200 a year, and each added week about $1,900 more.
• Room: credit-line capacity used by one slow plan is not there for a week of heavy overtime or new client starts.
• The claim itself: a claim that misses the payer’s filing limit may not be paid at all.

Recompute it monthly for each payer: weekly payroll for that payer’s clients times its lag in weeks. When it rises, one of the five dates moved, and the dates say whose days they were.

When this needs no outside help, and where the Review fits

If every batch passes the EVV match, the stuck list fits on one page and each payer’s lag is known and steady, the plan above is the whole job and nobody needs to be hired. If Medicaid is the agency’s main payer and denials keep returning, the right outside help is a billing specialist in that state’s program. The Revenue Review is not that.

The Review fits a private-pay agency where Medicaid or an MCO is one payer among several and nobody can say what each payer’s lag costs. It reads payroll dates, claim and remittance exports, deposits and private-pay invoices by client ID, with no care details, and puts a monthly dollar figure on each leak the records support, including each payer’s float and the claims past their lag. It does not submit or correct claims, fix EVV records, contact payers, caregivers or families, or give legal or billing-compliance advice. It takes two weeks and ends in a written report the agency keeps.

If the numbers suggest it, the next step is a free 20-minute call, where we say whether the list and the plan above, run in-house, are enough.