Courts may cure home care’s ills

Home care patients demand their day in court

Case managers who take their patient advocacy role seriously will watch with interest the outcomes of lawsuits pending against the Health Care Financing Administration (HCFA) in Baltimore. Case Management Advisor’s sister publication Hospital Home Health recently reviewed three lawsuits filed against HCFA on behalf of home care patients and interviewed the plaintiff’s attorneys.

Here’s a summary of the lawsuits:

o San Martin Home Health et al. v. United States of America; Department of Health and Human Services; the Health Care Financing Administration; and Palmetto Government Benefits Administrators, a division of South Carolina Blue Cross and Blue Shield, a South Carolina Corp. Filed July 2, 1998.

Austin, TX, attorney Mark E. Price filed the lawsuit in U.S. District Court in Dallas on behalf of 25 home health agencies and more than 30 Medicare beneficiaries. The plaintiffs include one quadriplegic man who had been receiving regular home health services until the interim payment system (IPS) took effect, Price says.

After IPS was implemented, the agency that had been serving him folded, and the registered nurse who owned the agency continued to see him without pay, Price adds. "But she’s going to have to move to get another job and earn an income, and he will be left without home health care."

IPS has severely affected home health agencies and Medicare beneficiaries in Texas, where many patients had been receiving daily and twice daily visits for chronic, long-term conditions, he says. Already, so many home care agencies have closed in Texas that he has affidavits from 12 physicians who say they can’t find home health agencies to care for their acute high-cost patients. "One physician is sending his nurse out at his own expense to help a severe diabetic," he adds. The woman must receive insulin shots twice daily, and she has no family or caregivers to help her.

Price says he receives five to 10 calls a day from Medicare patients who have heard about his lawsuit. He is working to turn it into a class action lawsuit.

The problems he describes are not surprising because Texas has so many home health agencies, many of them new, says Bill Dombi, director of the Center for Health Care Law for the National Association for Home Care (NAHC) in Washing ton, DC. "Texas is going to be very hard hit [by IPS] because it had the largest number of home health agencies in the country, over 2,000 Medi care-certified home health agencies," Dombi says. "Lots of these were start-up agencies, serving long-term, higher-cost patients who are not accommodated under IPS." He says it was fairly typical of new agencies to provide 700 visits a year to patients who could not inject their own insulin.

The Texas suit claims the government’s severe cuts in funding Medicare home health services have put hundreds of thousands of high-risk acute beneficiaries at risk of death or institutionalization. It also challenges the validity of the implementation of IPS provisions and related regulations, quoting a congressional resolution of June 5, 1998, that said: "The Adminis tra tion should ensure that the implementation of the interim payment system does not adversely affect the availability of home health services for Medicare beneficiaries."

13 bills on IPS, and counting

The suit also claims IPS is irrational: "While Congress’s primary purpose in enacting this payment scheme was to lower the costs to Medicare of providing health care to the elderly, sick, and disabled, while ensuring that they continued receiving the same quality of care, the Interim Payment Sys tem through its implementation by HCFA will achieve the opposite result and defeat the intent of Congress," it reads. "Patients will be forced to mi grate to institutional settings, at a higher overall cost."

So far, Congress has 13 bills addressing IPS, Dombi says. These range from minor tinkering with the IPS rate-setting formula to substantial changes. He says NAHC compares IPS to the Titanic. "Every time you talk about tinkering with IPS, you’re rearranging deck chairs; you may be adding a few lifeboats to the Titanic instead of bringing it into port."

The Texas Association for Home Care (TAHC) in Austin was the first to lose an IPS lawsuit. The Austin-based home care association lost its case, Greater Dallas Home Care et al. v. U.S., filed March 31, 1998, when federal Judge Barefoot Sanders issued a 30-page ruling in June that IPS was constitutional, says Sara Speights, director of government affairs for TAHC.

o National Association for Home Care v. Donna Shalala, Secretary, U.S. Department of Health and Human Services. Filed April 15, 1998.

NAHC’s lawsuit was filed in the U.S. District Court for the District of Columbia on behalf of all members and Medicare participating home health agencies in the United States. The lawsuit challenges the implementation and application of changes to the Medicare home health services benefit as contained in the Balanced Budget Act of 1997. Specifically, NAHC attacks the HCFA’s final rule issued on March 31, 1998, claiming, "This final rule represents an unreasonable, arbitrary and capricious implementation of statutory authority."

The suit says that as a result of the defendant’s illegal rulemaking, nearly 58% of all home health agencies will incur costs greater than their reimbursement for serving Medicare patients. NAHC’s suit asks the court for injunctive and declaratory relief to stop enforcement of the published rule and to require HCFA to revise it.

o Vicki O’Neal of Carborro, NC; Patricia Rote of Forest Hill, MD; Mary Helen Gunkler of Eden Prairie, MN; and the National Spinal Cord Injury Association of Silver Spring, MD, v. Donna Shalala, Secretary, U.S. Department of Health and Human Services. Filed May 6, 1998.

This suit, filed on behalf of all disabled or elderly Medicare enrollees in need of home health care, challenges HCFA’s interpretation of the "confined to home" requirement under Medicare’s home health benefit. "HHS has implemented and enforced an arbitrary and capricious interpretation of the Medicare confined to home’ requirement to categorically deny coverage to persons with severe disabilities," the suit states. "As a result, Medicare home health services patients are faced with irrational and unexplained coverage denial determinations which fail to take into account and consid - eration individual patient needs, the attending physician’s opinion, and the spirit of community inclusion." The plaintiffs asked the court for judicial relief to prevent further administrative erosion of the home health benefit.

[Editor’s note: NAHC is keeping a careful watch on Washington and the courts. For more information, contact: Center for Health Care Law, National Asso ciation for Home Care, 228 Seventh St. SE, Washing ton, DC 20003. Phone: (202) 547-5262. Fax: (202) 547-3540. Web site:

The time may be right for case managers to make their on march on Washington. Watch for suggestions on how to make your voice heard on Capitol Hill in a future issue of Case Management Advisor.]