The Future of Private Pay Home Care

private pay home care

Home care agencies are flexible, forever bending and changing with new regulations, recommendations, and rules. As an agency owner, you must also learn to be flexible and accommodating with clients in order to remain viable and profitable. This means you need to be able to adjust to your current and future caseload payor mix. No matter if you currently are mostly private pay or reimbursed by a third party, you must stay up to date on all types of payor sources in order to be confident as you take on new clients. Let’s talk a bit more about private pay home care now and what it could look like in the future.

What Is Private Pay Home Care?

Private pay home care is when a client pays for services out of pocket. This means their services are not paid in full via Medicaid, Medicare, or another insurance. Private pay clients may pay for the entire bill of services out of pocket or they may cover the remaining amount after insurance pays a designated price for services.

Private pay home care services are currently the most common type in the majority of home care agencies across the country.

What Are the Benefits and Drawbacks of Private Pay Clients?

Private pay clients mean you are able to easily bill for services and receive payment without jumping through the hoops that reimbursement payors may require. When you have more private pay clients, you also receive payments much more quickly than when working with reimbursement clients. This means you need less follow up via email and phone calls with third-party agencies, which saves your billing staff a lot of time.

Working with private pay clients means a few drawbacks, though. First, you typically must offer some type of service fee cut in order to make services affordable for your clients. This could mean you take a financial hit for some of your more advanced services. Also, you must have an action plan and policy for your agency that specifically addresses nonpayment or late payments. All private pay clients should receive your policy so they know any consequences for late or unpaid balances.

How Can I Prepare to Work with Private Pay Clients in the Future?

Private pay is the most common payor type in home care agencies currently. However, there could be more opportunities for Medicare, Medicaid, or another third party insurance to begin increased reimbursement for home care services in the future. This does not mean that private pay will be eliminated in the future, but that your agency’s mix may shift a bit as reimbursement comes into the home care sector more.

You can continue to work with private pay clients by reviewing and updating your payment policy at least yearly, as well as recruiting private pay clients by offering sales or specials on services throughout the year. These incentives will encourage clients to begin or restart services. 

Private pay clients will continue to be important to your business model, and while your reimbursement clients are certainly just as crucial to your agency’s success, you should ensure your marketing team is focused on connecting with private pay clients regularly.

How are your marketing professionals actively recruiting private pay clients?



Article written by Haley Burress.

Hi, my name is Wendell Scott and I help Home Care Agencies who are experiencing high caregiver turnover rates, have trouble coordinating client care and feel frustrated with their team to easily increase efficiency and scale their Home Care business.

I’d like to share with you my free Caregiver Recruitment Engine framework. In it, are the tools to help you develop a system to easily attract & hire caregivers (aka a repeatable system for recruiting quality staff), so you can organize your process, reliably recruit staff and efficiently scale your home care team.

The end result: 

Hire caregivers.

Faster than ever. 



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