From Part A to Part B: How Home Health Agencies Are Rebuilding for Resilience

Home health is undergoing a fundamental shift. For decades, many agencies have relied heavily on Medicare Part A to deliver therapy services. But rising operational costs, payment model changes, and tighter utilization management have made that model increasingly unsustainable.

That’s why more and more agencies are turning to Medicare Part B—not as a side offering, but as a core strategy for delivering high-quality, financially viable care.

Why the Shift to Part B Is Accelerating

Medicare Part A reimbursement has been under pressure for years, but several recent developments are accelerating the pivot toward outpatient therapy services under Part B:

• PDGM (Patient-Driven Groupings Model) significantly de-emphasized therapy volume as a payment factor.
• CMS audits and clawbacks are increasing scrutiny around visit justification and recertification.
• Staffing shortages and burnout are forcing agencies to rethink rigid episodic models.
• The expiration of the COVID-19 Public Health Emergency has removed some flexibilities that previously supported higher therapy volumes under Part A.

In short: Agencies need new ways to keep therapists working—and patients improving—without falling into financial quicksand.

How Agencies Are Adapting with Part B Models

Forward-looking agencies are leveraging Part B in three main ways:

1. Mobile outpatient therapy, where therapists visit patients in their homes but bill under Part B.
2. Satellite outpatient clinics, which can serve both discharged Part A patients and the broader community.
3. Hybrid models, blending traditional home health with outpatient services to improve continuity and diversify revenue.

But making this pivot isn’t just a billing switch—it requires a full operational retooling.

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Four Must-Haves for a Successful Part B Transition

✅ 1. Mastering Part B Compliance

Unlike Part A, Medicare Part B billing brings new rules and risks. Agencies need to understand:

• The 8-minute rule for timed CPT codes
• Use of GP modifiers
• 90-day Plan of Care recertifications
• Thorough documentation and functional reporting to support medical necessity

Training your billing team—or partnering with experts—is non-negotiable. Inaccuracies can lead to denials, audits, and payment delays.

✅ 2. Rethinking Therapist Staffing & Pay

Under Part A, most therapy is salaried or paid per visit. Under Part B, every CPT code generates revenue, which changes how productivity is measured.

To adapt, agencies are:

• Moving toward productivity-based or hybrid compensation models
• Creating dual-role positions where therapists flex between Part A and Part B
• Cross-training clinicians to handle both home and outpatient visits

This flexibility not only improves revenue but also gives therapists more variety and growth pathways.

✅ 3. Smart Scheduling & Route Optimization

Mobile outpatient care hinges on efficiency. Therapists need tight schedules, minimal windshield time, and a mix of billable services.

Agencies are adopting tools and workflows that:

• Group patients by geography, visit frequency, and code mix
• Automate route planning to maximize billable hours
• Balance productivity with burnout prevention

This kind of logistical precision helps retain staff and ensures each visit contributes to the bottom line.

✅ 4. Transparent Patient Education

Patients used to Part A may be confused by a switch to Part B. They may ask:

• “Why do I have a copay now?”
• “Am I being discharged from Home Health?”
• “Why is my therapist coming from a different company?”

Clear communication is critical. Educate patients early and often about:

• The lack of a homebound requirement under Part B
• Differences in cost-sharing and documentation
• How therapy can continue—even improve—under a new model

Well-informed patients are more likely to stick with care and comply with plans.

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Policy Trends to Watch

Beyond operational shifts, several policy-level changes are making the move to Part B even more strategic:

• CMS continues to rebalance site-of-care incentives, encouraging lower-cost outpatient care over institutional settings.
• Telehealth flexibilities—many of which have been extended—allow greater reach for outpatient services under Part B.
• The rising role of Medicare Advantage has introduced varied requirements and tighter care utilization, pushing agencies to offer multiple service lines to stay competitive.
• Private payers are modeling after CMS, meaning that strong Part B systems today can help agencies scale broader outpatient services tomorrow.

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The Big Takeaway

This isn’t a reimbursement workaround—it’s a strategic evolution.

Agencies that embrace Part B now aren’t just surviving—they’re:

• Creating new roles for top-performing therapists
• Maintaining continuity of care even after discharge
• Unlocking new revenue streams without sacrificing outcomes

It’s not a temporary fix. It’s a future-proof model that meets today’s challenges and positions agencies for long-term sustainability.