A myriad of regulatory, reimbursement and workforce pressures have challenged providers when it comes to clinical capacity and associated revenue.

Hospice budgeting practices hinge on several factors, according to Matt Chadwick, CFO of Well Care Health. Building a sustainable financial structure for end-of-life care delivery can be a challenging feat when navigating the impacts of patient care and staffing needs, referral streams, operational expenses, billing claim cycles and compliance factors, Chadwick said.

He shared his thoughts at the National Association of Home Care & Hospice’s (NAHC) Financial Management Conference in Las Vegas. The association in June completed its affiliation with the National Hospice and Palliative Care Organization (NHPCO), forming the temporarily-branded NAHC-NHPCO Alliance.

“It’s a hard, long road, and we’ve got to account for that in some way in the budget,” Chadwick said at the conference. “Building the budget itself is through the revenue considerations, looking at your referral and admission volume from a payment-rate-per-day perspective and looking at your average lengths of stay. Tying it [all] to patient acuity will help better understand what you can absorb from a new admission perspective.”

Founded in 1987, Well Care Health provides home health and hospice across 69 counties in North and South Carolina. The hospice and home health provider also offers skilled nursing services and rehabilitation therapies.

Balancing staffing with patient census is the crux on which hospices often teeter, according to Chadwick. Hospices strive to have sufficient staffing levels that meet rising end-of-life care demand, but finding a sustainable path involves careful balance sheet planning alongside operational awareness, he stated.

The ability to financially fuel growth requires providers to have a significant insight around their current and future care delivery costs, patient needs and staff wages, he added.

“It’s a kind of a chicken-and-egg situation,” Chadwick said. “You need staff to grow, but you also don’t want to overstaff without revenue. You’ve got to really focus on how do you balance those two things as you’re growing.”

Providers are at times pressed to manage their financial resources in today’s hospice regulatory environment as oversight heightens, said Lindsay Doak, national study director at the accounting and consulting firm BerryDunn.

Quality and compliance are also important pieces of a hospices’ budget and growth potential as providers experience. Case in point, hospices that fail to comply with new quality reporting requirements set forth in the 2025 payment rule face a 4% penalty.

“You are going to see more regulations,” Doak said at the conference. “What we’ve already seen is certain actions being implemented. [It’s] how to balance out the high quality outcomes with your finances and all those things going on in the industry.”

Hospices’ billing cycles and budgeting practices have been challenged as providers respond to increased audits that at times result in temporary suspension of complete revocation of payment. More than half of hospices nationwide have reported undergoing multiple audits simultaneously this year.

Providers are toeing challenging lines between rising regulatory security and evolving quality requirements, Doak stated.

Regulators are also closely watching for red flags in hospices’ quality outcomes, profit margins and claims, she added. This trifecta of factors can help uncover potential malfeasance as regulatory watchdogs fix their gaze on the space.

“We’re seeing the profit margins increase for a lot of hospice organizations in California and Texas,” Doak said. “It’s one of those things being heavily monitored. [Regulators] really analyze what’s going on in hospice, and their number one concern is the decrease in quality outcomes and increase in profit. You don’t want to be one of those organizations they’re flagging.”

Maintaining a sustainable bottom line requires an interdisciplinary approach across different facets of hospice operations, compliance and care delivery, according to Rachael Feeback, revenue cycle senior product manager of home and hospice at MatrixCare by ResMed.

The ability to set and achieve financial benchmarks in part involves strong staff collaboration and communication as well as a significant understanding of quality and compliance, Feeback stated.

“The budget should not just be solely 100% of the financial person’s responsibility,” Feeback said. “It should be a conversation with the clinical side, the operational side, so that you’re understanding your different measurements for hospice and how that translates to the budget and not solely focused on the pure dollars behind it.”