HOME HEALTH: Senators Say Medicare Changes Went Too Far
Several senators yesterday said last year's federal budget legislation "may have gone too far in trying to save money and inadvertently cut off some Medicare beneficiaries from needed home health care," the AP/Boston Globe reports. The Senate Special Committee on Aging held a hearing yesterday "to reconsider changes to home health benefits." Sen. Chuck Grassley (R-IA), chair of the Aging panel, said, "There's a lot of reluctance on the Hill to do any Medicare legislation this year," but he said home health care is "not a luxury for our seniors. It's a necessity, and we just have to make it work." Sen. Max Baucus (D-MT), a member of the Finance Committee that helped draft the new rules last year, said, "We perhaps went overboard and our efforts here now are to try to correct our mistakes" (4/1). Sen. John Breaux (D-LA), a Finance Committee member and chair of the Medicare Reform Commission, said Congress "made a serious mistake" in passing the changes (Love, AP/Los Angeles Times, 4/1).
According to seniors advocates and home health providers, the "new limits on Medicare payments for home care have led providers to deny services to the sickest beneficiaries." Connecticut's Center for Medicare Advocacy attorney Alfred Chiplin Jr. said, "The incentive is for them to find the easiest and cheapest patients to care for." Under last year's budget act, "new payment limits are based on the number and average cost of patients that home care agencies served in fiscal year 1994." These payment limits will be replaced in 1999 "with standard fees for each condition that home health agencies treat." According to the AP/Globe, this interim payment system is "expected ... to save Medicare $1.6 billion this year alone." However, "home care providers argue that well-run agencies are punished the most, since everyone must live within" a budget that was determined by 1994 figures. "Although there's no cap on the care individual patients can receive," the AP/Globe notes that "too many very needy patients can push an agency over the edge" (4/1).
According to Health Legislation, Breaux said he "thinks Congress should consider passing a law to 'just stop'" the interim payment system while urging the Health Care Financing Agency to "speed the move" to the prospective payment system. Senators and witnesses at yesterday's hearing "suggested other solutions," Health Legislation reports, "including setting payment limits by blending a national average cost rather than a regional one with [a home health agency's] own costs, and implementing a two- or four-tiered risk-adjusted payment system to avoid penalizing efficient agencies that serve sicker clients." Grassley "said he and Breaux are working with the Finance Committee and hope to hit upon and move a legislative remedy this session" (Clemmitt, 4/1 issue). Following the hearing, Grassley said, "I'd like HCFA to work things out with the home health care agencies as quickly as possible. If they can arrive at a solution on their own, that's fine. If they need Congress to take up legislation to fix the problems, that's fine, too. We just need a solution very soon so seniors don't get shut out of home health care" (Senate Special Committee on Aging release, 3/31). Yesterday, HCFA Administrator Nancy-Ann Min DeParle "said data HCFA will receive from contractors in June or July will determine whether the agency will meet the August 1999 deadline for implementing the new home health" prospective payment system (Health Legislation, 4/1 issue).
Backing The Industry's Claims
A study released this week shows that the home health care reforms included in last year's budget act "mandates changes in eligibility and enacts payment reforms that would make it more difficult for home health agencies to provide critical care for disabled and severely ill seniors." Prepared by George Washington University Medical Center's Center for Health Policy Research, the study concludes that the home health changes put "the sickest and frailest beneficiaries at risk," changes that "may affect the agencies most likely to care for very complex Medicare home health beneficiaries." The study says the interim payment system created by the budget law "will make it more difficult to design and implement the permanent prospective payment system scheduled to become effective in FY 2000." In addition, "[r]eductions in the availability of home care ... will shift costs to hospitals and nursing homes, thereby increasing the overall cost to the Medicare system." The changes will also shift the demand for care to state Medicaid budgets, "whose ability to absorb the additional costs now paid by Medicare is questionable." The study was commissioned by the Home Health Services & Staffing Association (HHS&SA release, 3/30).
The Massachusetts home health care industry yesterday "said it expects 'considerable' layoffs this year as a result" of the new home health care rules, the Boston Globe reports. A survey of 40 home health agencies found that 60% of the agencies "said they expect to lay off staff within the year" and about "10% of the agencies said they have already initiated layoffs." The industry, which "employs approximately 18,000 people in Massachusetts," stands to "lose $100 million a year from the cutbacks." Last year, the state's 175 agencies received "$750 million from Medicare for home health care services delivered to elderly and disabled clients" (Pham, 4/1).