NAHC stats provide ammunition
NAHC stats provide ammunition
Talking points focus on impact on home health
According to statistics published by the National Association for Home Care and Hospice (NAHC)1, home health cuts in the House Tri-Committee health care reform proposal would take $56.8 billion over 10 years from the home health Medicare benefit. Medicare home health spending totals about $16.4 billion per year, which is $1 billion less than in 1997.
The legislative action center of NAHC's web site explains the details of health care reform proposals that affect home health and offers a number of "talking points" that home health representatives can use when discussing health care reform with their legislators.
The proposed home health cuts are disproportionate to the cuts affecting other providers. Home health is 4.5% of projected Medicare spending between 2010 and 2019, while current proposals recommend 11.4% of the cuts for home health reimbursement.
The home health cuts in the Tri-Committee proposal are more than $22 billion more than those proposed by the Obama administration, and go well beyond the Medicare Payment Advisory Committee's (MedPAC) recommendations for cuts, while ignoring MedPAC's recommendations for true payment system reforms.
Currently, about one-third of Medicare home health agencies have negative Medicare profit margins.
MedPAC fails to evaluate the impact on care access that occurs with the current wide-ranging financial status of home health agencies. Regardless of average margins, there is a wide range in agency margins, which means a wide range in impact that the proposed across-the-board cuts would have.
MedPAC's proposal to reduce home health payments is based on claims that home health agencies are making excessive profit margins on Medicare services. MedPAC's financial analysis of Medicare home health agencies, projecting a 12.2% margin for 2009 does not include the 1,626 agencies (21% of total home health agencies) that are part of a hospital or skilled nursing facility. In some states, hospital-based home health agencies make up the majority of the providers. Facility-based home health agencies have an average Medicare profit margin of negative 6.19%.
Recent cost reports reveal that the average Medicare margin for rural agencies is negative 3.52%. The loss of the 5% rural add-on payment for home health services in rural areas has resulted in reductions in service areas, agency closures, and reports that some agencies had to turn away high-resource-use patients who are more expensive for agencies to serve.
The "case mix creep" adjustment ignores increases in patient acuity, particularly a significant increase in orthopedic and neurologically impaired patients requiring restorative therapy.
Reference
1. National Association for Home Care and Hospice. Ensure adequate and appropriate payment for Medicare home health services. (2009) Retrieved August 2009. http://www.congressweb.com/nahc/docfiles/march_on_wash_09/Ensure%20Adequate%20and%20Appropriate%20Payment%20for%20Medicare%20Home%20Health%20Services.pdf.
According to statistics published by the National Association for Home Care and Hospice (NAHC), home health cuts in the House Tri-Committee health care reform proposal would take $56.8 billion over 10 years from the home health Medicare benefit.Subscribe Now for Access
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