Medicare Compliance & Reimbursement

For many disabled people depending on home care services through Medicaid, this could be the final battle for their independence and freedom. Facing their biggest budget crises in decades, states are reaching for programs to cut. And the most obvious candidates often appear to be home care programs.

The cutting’s already begun in some states. Florida Gov. Jeb Bush (R) has proposed limiting Medicaid payments for chronic illness to balance the state’s $50 billion budget, reports Associated Press. Texas Gov. Rick Perry (R) has proposed slashing Medicaid spending by 6 percent without going into specifics, according to AP.

New York Gov. George Pataki (R) has called for cutting Medicaid and reinstating $17 million in fees on home care income. The fees would be reduced by 25 percent annually and phased out by 2007.

The chronically ill and disabled people who most need home care under Medicaid are an expensive population because their care doesn’t involve acute episodes. They may comprise only 9 or 10 percent of the Medicaid population at most, but their costs are much higher than 10 percent of spending, notes Derrick Dufresne, project coordinator with Community Resource Associates in Des Peres, MO.

To safeguard this spending, home care providers and community advocates must explain that home care is cheaper than institutional care. He cites statistics showing Medicaid home care costs at least 25 percent less than institutional care. But providers must explain that home care is also more efficient in other ways, insists Dufresne.

For example, states typically pay for nursing home care on a per-person, per-day basis. In effect, they pay for the bed rather than the care, so that someone’s care costs $165 per day whether it actually costs $100 or $200. This adds to other built-in inefficiencies, such as low clientto- staff ratios and fixed building costs, notes Dufresne. Attaching the funds to the person instead of the provider is “the single biggest possibility for savings,” he insists.

Another thing advocates should make clear: It’s not a choice between home care and institutionalization, but often between home care and nothing. In some cases, institutions have closed down after Medicaid patients have moved back into their homes, notes Colleen Weick, executive director of the Minnesota Developmental Disabilities Council.

And in some cases, patients may still receive home care but at reduced hours, which renders it nearly useless and adds to strain on families, Weick points out. Weick fears programs may tell patients, “You’ve been on the wait list for 10 years, [now] you’re going to go back on the wait list.”