Home-care agency closures: the warning signs, and what to check first.
Some agencies that feel like they are failing are profitable businesses with a collection problem. The two require completely different fixes.
The signs, in the order they usually appear
Cash and liquidity first. Days of cash on hand shrinking week over week. Reaching for a credit line to make payroll, or moving payroll to the day after the deposit clears rather than the day it is due.
Then receivables. DSO climbing month over month, the aged AR buckets fattening past 60 and 90 days, the denial rate rising while the denial work rate falls, and an unbilled backlog growing behind the closing period.
Then margin and concentration. Drifting toward break-even as labor costs rise against the 80 percent floor, and heavy dependence on a single payer that can move the whole business with one contract change.
What to check first
Five diagnostics, in order. The DSO trend across the last six months. The aged AR buckets by payer, not blended. The denial work rate, meaning what share of denials are actually being worked inside the appeal window. The unbilled backlog measured against the filing window for each payer. Days of cash on hand.
Read in that order because each answers a different question, and running them out of order hides the one that would tell you which kind of problem this is.
The question that changes the fix
Ask whether the business is genuinely unprofitable or profitable but not collecting. The first calls for hard structural change, on cost or on mix or on scale. The second is recoverable revenue sitting inside the billing process, and the fix is operational rather than strategic. The five diagnostics above are what tell you which one you are actually looking at.
Plain answers, on the record.
Collect is money you never captured. Cover is money a payer can still take back.
Reeve reports the two separately and never adds them together, because only one of them is yours to go and get. The Margin Review reads both on your own export and costs nothing.
One pass over your own export, in your browser. The findings are yours to keep, with no obligation.
The recovery lane. Care you delivered and never billed, units short of what was authorized, lines paid under the published rate.
Everything in Collect, plus the exposure lane. Retired codes, authorizations at the end of their period, care delivered past what was approved.
Month to month, no annual contract. Read-only in every tier. Run the free review.
Find out which problem you actually have.
The Margin Review reconciles authorized, delivered, billed, and paid for one closed period and returns a ranked list of recoverable dollars with a reason on each line, so you can tell a collection problem from a margin problem.