Home Health & Hospice Week

Obama administration also wants to ratchet down payments further.

The newly released budget proposal from the Obama administration carries multiple dangers for home care providers, at a time when agencies cannot afford even a single budgetary setback.

As in previous years, the 2016 budget plan calls for “a modest copayment for certain home health episodes,” according to the budget document released Feb. 2. The copay would start in 2019 and would strip a whopping $830 million from federal spending over the next 10 years.

While the budget documents are scanty on details, in past years the administration has proposed a $100 copay on episodes that do not follow a hospital stay.

“Deficit reduction should not come in the form of a ‘sick tax’ on the nation’s poorest, sickest, and most vulnerable individuals,” protests the National Association for Home Care & Hospice.

Implementing a copay would actually cost the Medicare program money, contends NAHC’s Val Halamandaris. “A home health copay will take Medicare spending in the wrong direction — forcing patients out of high-quality, cost-effective care into much more costly care settings such as hospital, ER and assisted living-based treatment,” Valamandaris says in a statement.

“Congress saw fit to repeal beneficiary cost sharing for home healthcare patients in the past because it failed to reduce healthcare costs and instead drove seniors to higher-cost institutional settings,” notes the Partnership for Quality Home Healthcare, a lobby group formed by multi-agency chains. “Re-imposing a copayment on millions of the most vulnerable seniors is not the appropriate direction for Medicare or our nation,” says PQHH’s Eric Berger in a statement.

Bottom line: “Reinstituting beneficiary cost sharing policies on a Medicare population that is documented as Medicare’s oldest, poorest and sickest patient population has the potential to jeopardize seniors’ access to quality skilled home healthcare,” PQHH warns.

More Cuts Outlined In Budget

Home health agencies are already groaning under the weight of rebasing reductions, but the administration calls for even more payment cuts in future years. The Centers for Medicare & Medicaid Services would “encourage efficient post-acute care” by “adjust(ing) payment updates for certain post-acute care providers,” the budget document proposes.

The adjustment would equal a 1.1 percent reduction to the inflation update for home health agencies in 2016 through 2025, NAHC notes. That would strip another $15 million from Medicare’s home health payments.

If such cuts take effect, “these payment reductions would be in addition to the rebasing of home health, home health productivity adjustments, and sequestration that lower payment rates by over 14 percent starting in 2015,” NAHC criticizes. “The cumulative effect of billions in home health cuts has been to push thousands of providers to the point of bankruptcy — limiting patients’ access to home care and forcing them into costlier care options.”

“Medicare reforms should never be funded by making indiscriminate across-the-board cuts to home health care or by shifting costs to our most vulnerable citizens through copays,” Halamandaris urges.

Long-term view: Cutting home health funding is short-sighted, NAHC cautions. “The need for home care will only increase as the 78 million baby boomers turn 65 at the rate of 10,000 per day for the next 19 years,” the trade group says. “Home care is the option that the vast majority of boomers will demand because it helps patients stay independent and keeps families together. Home care is also far more cost-effective for Medicare than institutional options — saving the program tens of billions of dollars every year.

Watch for: The administration’s budget proposal is highly unlikely to be taken up by the Republican controlled Congress. But lawmakers on both sides of the aisle will be looking for places to cut spending, and to raise funding for other Medicare-related initiatives such as the so-called “doc fix” — eliminating the annual shortfall in physician reimbursement funding due to Sustainable Growth Rate issues. Payment reduction ideas in the relatively high-profit-margin home health industry are likely to be popular sources, experts warn. 

Note: See the budget outline at www.whitehouse.gov/sites/default/files/omb/budget/fy2016/assets/budget.pdf.