HOME CARE: BIG CHANGES EXPECTED
"A year ago, it seemed the home health care business knew noThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
bounds. Hailed by policy makers, medical experts and Wall Street
as the future of long term care for the elderly and disabled, it
was health care's shining star. The luster is fading," USA Today
reports. Because of the recent "charges of widespread fraud and
abuse," many big home health players "are fleeing the business,
even as others seek to consolidate the industry in the hands of a
few big chains." The latest changes occurred this past Thursday
when "federal authorities charged 12 people in one of the biggest
home care fraud cases ever" (see AHL 8/8). Also on Thursday,
Columbia/HCA Healthcare Corp. announced it was selling its $1
billion-a-year home health care division (see AHL 8/8). This
division, "which accounts for 5% of Columbia's annual revenue,"
is among the biggest in the home care industry. In addition,
"[r]ecent federal audits found that 40% of home health visits
paid for by Medicare in California, Illinois, New York and Texas
did not qualify for reimbursement" (see AHL 7/29).
According to Department of Health and Human Services
Inspector General June Gibbs Brown, who is steering HHS anti-
fraud effort, "The industry grew so fast, there never was a
shakeout period." As a result of the recent problems, USA Today
reports that "[t]he Clinton administration ... is pushing the
first big changes in 25 years in how Medicare regulates and
reimburses home care." For instance, "the changes will cap
payments, boost scrutiny of claims and toughen criteria for those
entering the business." Along with "tougher background checks,"
the new federal regulations will also "require that Medicare-
certified home care providers post a bond to enter the business."
The Medicare billing practices will also be changed. In the
past, "home-care providers simply billed Medicare for the they
worked performed. ... Now Medicare will set payment for certain
types of care." This new payment system is expected to save at
least "$9 billion of the $115 billion that is being cut from
anticipated Medicare spending in the new budget deal."
DAWN OF A NEW DAY
USA Today reports that "[m]any believe that tougher
oversight and a new regulatory approach already are having an
impact." According to Ken Abramowitz, health care analyst at
Sanford C. Bernstein, "It's made it more difficult for fly-by-
nighters to enter the business." According to USA Today, the
changes will likely "have the greatest impact on smaller,
independently owned home-care agencies ... . It also will
discourage entries into the field." Thus, according to Peter
Emch, analyst at Alex. Brown, "This industry will consolidate
dramatically" (Woodyard/Lowry/Eisler, 8/11).