Arsen Ustayev, founder and CEO of CareChoice, has shaped his strategy around hospital referral trends and differences in state Medicaid policies.

The executive, who previously founded and ran adult day care facility SarahCare, which still operates in Pennsylvania, has scaled back on certain services because of a lack of hospital system referrals – which an HHCN survey of providers identified as the top opportunity for growth. 

Ustayev is expanding his company’s footprint. CareChoice acquired a Texas-based agency on March 1, and is now looking to expand into Georgia, Ohio and Arizona, as well as grow its existing locations. 

While growing, Ustayev is keeping an eye on broader personal home care trends, including concerns about exaggerated claims of fraud in the industry and the potential for lawmakers to add a home care Medicare benefit.

Wyncote, Pennsylvania-based CareChoice operates in Florida, Pennsylvania, Michigan and Texas, providing personal home care, adult day and skilled home health services to approximately 1,400 clients. The company employs about 1,500 caregivers.

HHCN recently caught up with Ustayev to discuss the company’s growth strategy, the implications of the Medicaid fraud crackdown and how the executive strategizes based on state-level differences.

The interview has been edited for length and clarity.

HHCN: CareChoice offers Medicare-certified home health in some states but not others. What were the factors that led you to offer certain services in certain states?

Ustayev: We operate across four different states: we have Florida, Pennsylvania, Michigan and Texas. We provide skilled home health in Florida and in Texas. Michigan and Pennsylvania we’re only doing the non-skilled right now.

I did do skilled home health in Pennsylvania, but the problem we have here is that the hospital networks all have their own home health systems. They don’t give out any referrals out into the community. Most of your skilled patients are the ones that are getting discharged from a hospital, for the most part. So the hospital doesn’t call or provide an option to refer out to the community – they just self-refer. As soon as someone gets discharged, the hospital sends their own home health agency out there. And so it was very difficult to grow skilled care in Pennsylvania, unfortunately. On the other hand, the same thing doesn’t happen in Texas or Florida. Hospitals don’t have their own skilled agencies, and so they do refer out to the community, which is why in Florida and in Texas we have no issues with it, and we’re able to get referrals.

So a one-stop shop isn’t always the answer?

You have to assess the market and figure it out. In some markets, things just don’t work the way. On the other hand, like for example, in Florida, we don’t do the choose-your-own family caregiver, because that is not something that is allowed in Florida. It’s allowed in Michigan and Texas. But in Florida, if you are entitled to receive, let’s say, 20 hours of care per week, I have to assign a home health aide to you that you do not know. It cannot be someone that you know.

Why is your organization mostly focused on Medicaid over private pay?

Again, it depends on the area that you’re serving. Philadelphia, for the most part, does not have a whole lot of high-income individuals that could afford to do private pay, and so a lot of people in Philadelphia are low-income and they do get Medicaid assistance when it comes to receiving care. But if you’re going to go out into the suburbs, maybe in some of the areas where they’re more affluent, then yes, certainly you would deal with a lot more private pay, but we’re located geographically in more of a low-income area.

Given CareChoice’s heavy focus on Medicaid, do you have any fears about Medicaid pressures or uncertainties?

I have a ton of fears when it comes to Medicaid. In fact, this new administration has been heavily going after Medicaid fraud, which I personally appreciate, and I think it needs to be done. There’s a lot of bad apples out there, I’m sure, and they need to go away. Whatever work that can be done by the administration, by the state, to get rid of these bad apples, it’s better for us. Because you know, we follow the rules, we go by the book, and it makes it difficult when there are players out there who are just not doing the same thing.

But with that said, they sometimes paint too broad of a picture when it comes to this industry, and they call this whole industry fraudulent, which is not true. Out of 100 providers, maybe five of them are bad. 95 providers are still doing things the right way, you know. You can’t just generalize everything, like some of the administration folks do sometimes. They make it sound like everybody’s out here doing fraud, which is not correct.

Senator Wyden and some other Democratic senators recently advocated for adding a home care benefit to Medicare, as well as expanding home- and community-based services. Did you have an initial reaction to that news?

I would love that more than anything. One of the problems that Medicaid has is that it is a state-administered program, and so it is different in every state. On the other hand, skilled home health is basically guided by CMS, so the regulations are made by CMS – it’s the same in every state, which is awesome. If I’m doing something in Florida, and I can just go to Pennsylvania and repeat it, because I don’t have to worry about a whole new set of regulations. With Medicaid, every state is different, everybody’s doing it differently. Learning the whole process between each state becomes a very complicated thing to do. It’s questionable whether they’ll ever get it done, but if they do, I think it would be awesome.

What’s on your agenda for growth for 2026 through 2027?

This year, we added Texas to the mix. We acquired the Texas agency on March 1. We also have license applications out for Georgia, Ohio and Arizona, and we’re hoping to at least two out of three states started this year.

Also, it is a goal for us to continue growing our existing locations. Michigan has been a little bit difficult because the state is going through a transition from fee-for-service to a managed care model, and they just don’t have their ducks in a row. So there’s a lot of lost opportunities right now in Michigan, but we’re trying to kind of figure this whole thing out with the state. We’ve already got contracted with one of the managed care companies. There are about three or four more that we’re working on. I think once we get all of our contracts in place, we can continue to grow Michigan as well.

We entered Florida and Texas through acquisition, but the ones that I discussed earlier, such as Georgia, Arizona and Ohio, we’re trying to do organic natural growth. We’re applying for licenses and just starting from scratch there.

Why are you taking that approach to growth?

Acquiring isn’t always the best. When it comes to this industry, when you acquire an agency, you don’t just get the good, but you also get the bad. If they’ve been doing something bad for the past two years, well, guess what? Now it’s my responsibility.

If you were going to buy a restaurant, you close down their LLC and open a new LLC, do an asset acquisition, and that works. So, if there was any debt on the previous LLC, you don’t have to worry about it. But when you’re buying a home care agency, you have to do what’s called a stock transfer acquisition, which means you take over their LLC, which means you take over all the negatives and the positives they might have had. Aside from that, of course, there’s a capital investment that has to take place. Unfortunately, you have to be super careful about anything that might have been done incorrectly in the past, because you will be responsible for answering for it. So it’s always better if you can to start just organically and do it the right way from the beginning.

What’s your ultimate goal for CareChoice?

I would love to be the leader in the industry. I want to show the world that this is definitely a needed service. Some of these people want to wash us out to be a fraudulent thing. It’s not. We have a lot of people that are bedridden. They can’t get out of bed, they need the service. If you cut us out or the service that we provide, then the only other option for these people would be to be placed in nursing homes. I’m a big proponent of home and community-based services. I run the adult daycare center; that’s part of those services. These two services go hand in hand, and overall in the long term, it’s a huge savings for the government, and it’s such a great way to keep people away from nursing homes.