A line in the sand: NAHC vows lawsuit

IPS besieges an industry; it's time to fight

We have seen the enemy, and it is not us. It's the Interim Payment System - and the National Association for Home Care (NAHC) says it has the data to prove it.

Citing the results of two studies that project dire IPS outcomes for both the industry and Medicare beneficiaries, NAHC has pledged both legislative efforts and legal action against IPS.

Speaking at the organization's March policy conference in Washington, Dayle Berke, NAHC director of government affairs reported, "[Because] IPS is so devastating, NAHC will [urge] Congress to repeal it and just go to PPS."

Meanwhile, William A. Dombi, NAHC's vice president for law, announced that NAHC has developed a lawsuit challenging the constitutionality of IPS.

The pending legal action charges that IPS violates the equal protection rights of both Medicare beneficiaries and home care providers, along with providers' due process rights. The suit will assert that under IPS, patients are equally entitled to benefits, but some - particularly the sickest - will have less access because of agencies' disparate per beneficiary annual limits.

The most divisive issue

Likewise, the suit will argue that providers have equal responsibilities to serve all Medicare patients but will be unable to because of unequal reimbursement. NAHC alleges that IPS violates providers' due process rights because they face the "irreconcilable dilemma" of not discriminating against Medicare patients while operating under reimbursement limitations which offer little or no financial incentive to provide care.

NAHC is seeking both provider and patient to join it as plaintiffs in the action.

Critics say IPS' problems stem from its drastic reductions that were implemented too quickly and from an ill-considered reimbursement methodology, which creates significant inequities between providers. "It's really just devastating. Too much, too quick. No one has had time to make changes," says Anita Bradberry, executive director of the Texas Association for Home Care.

"The per beneficiary limit is the most divisive issue amongst providers," says Berke. Each agency will receive an aggregate per beneficiary figure largely based on its unduplicated FY94 patient census. This amount will not be adjusted for changes in the agency's operations since FY94.

A Lewin Group study commissioned by NAHC found that providers most significantly impacted by this provision include:

· those with increased case mix severity, requiring either more visits or proportionally more therapy and nursing services;

· smaller agencies unable to balance their sicker, higher-visit caseload with additional less-ill patients;

· rural agencies compelled to continue high-utilization patients' care (because other resources are unavailable);

· those that added services since FY94, the cost of which will not be reflected in their per beneficiary cap;

· new providers and agencies either merged with or acquired by another company since FY94. (New providers, with no FY94 cost data, will have per beneficiary limits based totally on their region's average figure. Merged and acquired entities will be held to the lower FY94 cost figure of the pre-joined companies.)

Dramatic disparities in payments

The methodology creates sometimes dramatic disparities between providers, even within the same city. NAHC staff members sited two providers in the same city, which project $3,000 and $13,000 per beneficiary caps, respectively.

Aside from the deleterious ramifications for agencies, sources say the most significant impact is on patients, who are at increased risk of institutionalization and face higher financial outlays for their care.

Agencies, patients, and advocates, however, face an uphill battle to redress IPS inadequacies. Sources at the conference tell Hospital Home Health Congress appears reluctant to change any provision of the carefully negotiated landmark legislation, especially because only about 60 legislative days remain in this session.

Ann Howard, executive director of the American Federation of Home Health Agencies in Silver Spring, MD, says, "There's concern in Congress but also inertia. They really don't believe that thousands of beneficiaries will lose services. Many are angry at home health for seeking redress. They assume there's massive fraud in home health. There's just cynicism about the benefit. `Oh, you're just crying wolf again,' they think.

"Some in Congress say, `Yes, there are problems [with the BBA], but maybe we won't take action; we'll just wait for the Medicare Commission to file its report. Our biggest concern is balancing the budget. Any separate Medicare home health legislation must be budget neutral.'"

Nonetheless, NAHC president Val Halamandaris told conference attendees: "The momentum is in our direction."

And NAHC chairman of the board, Mary Suther, urged members to "remember the patients. Keep fighting for what's right. We will prevail."