Home Health & Hospice Week

Hundreds of beneficiaries to move home under initiative.

Connecticut will receive a $24.2 million federal grant that will help residents move from nursing homes into their own homes, Gov. Jodi Rell (R) says in a press release.

Under the Money Follows the Person grant, "we can help get more people home by arranging support like 24-hour, in-home care, which Medicaid has not traditionally paid for," Rell notes.

The state aims to use the grant funding to move an additional 700 people from nursing homes into their own homes and communities over the next five years. Under the grant, Connecticut will cover in-home care, personal management, home alterations to accommodate wheelchairs and other medical equipment needs and other support services.

"This approach will be cost-effective for taxpayers and lead to wonderful improvements in the quality of life for many of our seniors and people with disabilities," Rell extols.

Not enough: However, the state's traditional home care budget is lacking, says the Connecticut Association for Home Care. Rell proposes no increase for Medicaid funding for next year, the trade group says. Home care providers also got no adjustment last year.

CAHC is lobbying for a significant rate adjustment, automatic indexing of Medicaid home care rates in future years, an increase in the subsequent visit payment rate, and direct payment for preventative measures such as flu shots and telemonitors, it says in its newsletter to members.

• Home care providers might see their reimbursement from Medicaid threatened under President Bush's 2008 proposed budget. The budget calls for Medicare to reduce home care funding by $9.7 billion over five years and hospice funding by $1.1 billion (see Eli's HCW, Vol. XVI, No. 6).

The budget also wants to ratchet down Medicaid spending by $25 billion in that time period. The proposed cuts don't affect home care and hospice directly, allows the National Association for Home Care & Hospice. But "reductions in the federal contribution to Medicaid will weaken the states' ability to provide these much-needed [home health and hospice] services," NAHC warns.

As with the Medicare reduction proposals, many members of Congress are speaking out against the Medicaid reductions.

• You should soon be able to get your patient outcomes data sorted by branch. The Centers for Medicare & Medicaid Services is updating its OASIS data systems, which will allow home health agencies to obtain outcome-based quality improvement (OBQI) and measurement (OBQM) reports by branch. CMS originally projected the change would take place by December, according to the QIES Technical Support Web site. But now NAHC reports that CMS will begin offering reports by branch this month.

When you request branch information, reports will display for the agency as a whole, for patients served by the parent agency, and for patients served by a branch, in numerical order, according to the QIES site.

• The top spot at CMS remains open, making providers wonder who will be leading their Medicare policy in the future. Leaders on the Senate Finance Committee, which will conduct confirmation hearings for the CMS Administrator, haven't endorsed Acting Administrator Leslie Norwalk, according to Congressional Quarterly. Norwalk and Acting Deputy Administrator Herb Kuhn are considered top contenders for the position.

• Oxygen suppliers can expect Medicare shortfalls this year. Respiratory giant Lincare Holdings Inc. said it expects Medicare reimbursement will be reduced in fiscal 2007, possibly cutting revenue by $35 million to $40 million for the company

Medicare pricing is already weighing down earnings for Lincare. The provider of at-home oxygen and respiratory therapy services said Feb. 12 that fourth-quarter earnings grew 3 percent, citing shifts in Med-icare pricing. Quarterly net income totaled $57 million, or 59 cents per share, up from $55.1 million, or 54 cents per share, during the year-ago period.

Revenue grew 13 percent to $368.1 million, from $326.1 million in the prior-year quarter. Analysts polled by Thomson Financial expected net income of 58 cents on revenue of $369.1 million, according to the Associated Press.

Sales were helped by internal growth offset by a 3 percent reduction in Medicare pricing and a 3 percent gain from acquisitions, Lincare said in a press release.

For the year, profit edged down less than 1 percent to $213 million, or $2.16 per share, from $213.7 million, or $2.06 per share, in 2005.

• PSA Healthcare Inc. must report an even bigger loss for the quarter ended Sept. 30, 2006. The Norcross, GA-based pediatric home care company must reduce its net income by $2.8 million for that quarter due to a tax error related to goodwill by the company's tax advisers, BDO Seidman. It originally reported a $1.3 million loss.

PSA has fired BDO Seidman and is seeking new tax advisers, the company says. PSA reported net income of $566,000 on revenues of $32.1 million for the quarter ended Dec. 31.

PSA also will acquire Maternal Child Health Inc.'s pediatric nursing business in the Illinois, Texas and Pennsylvania markets, it says in a release. PSA will pay $4 million in cash for the business with $12.4 million in annual revenues, with MCH retaining its accounts receivable. Two MCH locations, in Corpus Christi and McAllen, will operate as stand-alone agencies, PSA says.

On the other hand, PSA has dropped plans to acquire Advanced Pediatric Care Inc. (see Eli's HCW, Vol. XV, No. 44). Advanced couldn't "provide unencumbered title to their assets," PSA says.

• For-profit hospice chain VistaCare Inc. continues to tighten its budget belt to improve the bottom line.

The Scottsdale, AZ-based company reported net income of $391,000 on revenues of $70.0 million for the quarter ended Dec. 31, compared to a $1.5 million profit on $59.7 million in revenue for the same period in 2005. The Medicare hospice cap reduced revenues by $1.4 million for the latest quarter, the company says in a release.

In addition to restructuring and streamlining, the company is increasing sales presence in promising markets, it says.