Unpleasant legal issues swirl around home care

Four major lawsuits are bringing the home care industry's troubles to federal court, where its future could be decided.

One lawsuit, Healey vs. Shalala, could bring home care agencies even more regulatory grief. Although it's directed at the U.S. Department of Health and Human Services, the case could result in the government adopting more stringent termination guidelines for home care agencies serving Medicare patients.

The other three lawsuits were filed on behalf of home care providers, as well as consumers. Those might bring about some positive changes to Medicare's interim payment system.

Homecare Education Management has obtained copies of three of the lawsuits and a report about the fourth. Here's a summary:

o Healey vs. Donna Shalala, Secretary, U.S. Depart ment of Health and Human Services. Filed March 6, 1998:

Medicare home health patients in Connecticut, Alabama, New Jersey, Michigan, and Massachusetts filed this nationwide class-action lawsuit against Shalala in the Federal District Court for the District of Connecticut.

The lawsuit asks the court to order the HHS Secretary to require home health agencies with whom she contracts to provide basic due process rights to home health patients before denying, terminating, or reducing services, according to a report written by the Consumer Coalition for Quality Health Care in Washington, DC.

All of the plaintiffs have chronic illnesses and were receiving a variety of Medicare-covered home health services, under physician order, including skilled nursing visits, home health aide services, and physical therapy. The plaintiffs allege their home health providers terminated or reduced services without proper notice. Some patients were told they were no longer eligible for Medicare-covered home health services.

In one case, according to Judith Stein, one of the plaintiffs' attorneys, a patient learned her services were being terminated when her son called the agency to find out why no one had shown up for a scheduled visit.

The plaintiffs are represented by the Center for Medicare Advocacy in Willimantic, CT, the National Senior Citizens Law Center in Washington, DC, and the Medicare Advocacy Project in Boston.

o San Martin Home Health et al vs. 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, 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."

Texas agencies will be hit hard

Price says IPS has severely affected home health agencies and Medicare beneficiaries in Texas, where many of the patients had been receiving daily and twice daily visits for chronic long-term conditions.

Already, so many home care agencies have closed in Texas, Price says, that he has affida - vits 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," Price adds. The diabetic woman must receive insulin shots twice daily, and she has no family to help her out.

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 suit.

The problems Price describes are not surprising because Texas has a large number of home health agencies, many of which are new, says William A. Dombi, Esq., director of the Center for Health Care Law, National Association for Home Care (NAHC) in Washington, 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 Medicare-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 Texas agencies to provide 700 visits a year to diabetic patients, who could not inject their own insulin.

Does IPS lack rationality?

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

The lawsuit also claims IPS lacks rationality: "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 System through its implementation by HCFA will achieve the opposite result and defeat the intent of Congress," it reads. "Patients will be forced to migrate to institutional settings, at a higher overall cost."

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

NAHC's lawsuit, filed in the U.S. District Court for the District of Columbia, was undertaken 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 Baltimore-based Health Care Financing Administration's (HCFA's) final rule issued on March 31, 1998: "This final rule represents an unreasonable, arbitrary and capricious implementation of statutory authority. . . ."

The lawsuit claims that as a result of the defendant's illegal rule-making, nearly 58% of all home health agencies will incur costs greater than their reimbursement for serving Medicare patients. It asks the court for injunctive and declaratory relief to stop enforcement of the published rule and to require HCFA to revise the rule.

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, vs. Donna Shalala, Secretary, U.S. Department of Health and Human Services. Filed May 6, 1998:

This lawsuit, filed on behalf of all disabled or elderly Medicare enrollees in need of home health services, challenges HCFA's interpretation of the "confined to home" requirement under the Medicare 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 lawsuit claims. "As a result, Medicare home health services patients are faced with irrational and unexplained coverage denial determinations which fail to take into account 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.