GAO says the BBA is having intended effect on home care
GAO says the BBA is having intended effect on home care
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON The effect of the interim payment system (IPS) on home health agencies has raised concerns, but reductions in the number of agencies and changes in home health utilization are consistent with the incentives of the IPS to control the rapid and unexplained growth that preceded the Balanced Budget Act of 1997 (BBA). That is what the General Accounting Office’s (GAO; Washington) William Scanlon told the House Commerce Committee last week as the committee attempted to measure the impact of the BBA across a range of healthcare services.
The IPS is not "an appropriate payment method" for the long term because it does not adjust payments for differences in beneficiary needs, Scanlon told the committee Sept. 15. He said that makes it important to implement the BBA-mandated prospective payment system (PPS) as scheduled by Oct. 1, 2000. "In ongoing work, we are examining the formidable challenges of designing a PPS with the appropriate unit of payment, level of payment, case-mix adjustment method, and risk-sharing mechanism," he added. "Our work indicates that the PPS will likely require further adjustments after it is implemented."
But Nancy Roberts of Kent County Visiting Nurse Association in Warwick, RI, painted a far different picture before the committee. Roberts cited HCFA data from its OSCAR files that shows that as of Aug. 18, 1999, there have been 2,486 home health agency closures — almost 25% of all home health agencies across the country. That figure is much higher than the GAO’s estimate last May of 1,436 closures as of Jan. 1, 1999, she said.
In addition, she said that roughly 545,270 fewer Medicare beneficiaries received home health services in 1998 than in 1996, representing a 15.2% decline in the total number of patients served. Meanwhile, home health reimbursement has decreased 29% since 1996, she added.
"In 1997, home healthcare represented only 9% of Medicare, but was slated for about 14% of the reductions in Medicare spending," Roberts told the committee. "Currently, the home health program comprises less than 7% of the Medicare program and is now projected to absorb 24% of the Medicare cuts between FY 1998."
Roberts cited the Medicare Payment Advisory Commission’s (Washington) finding earlier this year that nearly 40% of agencies surveyed no longer admit all Medicare patients and that about 30% reported discharging Medicare patients with chronic conditions.
She also cited two "alarming outcomes" found in a recent survey by VNAA of its members. "While VNAs have historically made every attempt to admit all eligible beneficiaries regardless of condition or ability to pay, many VNAs are now selectively admitting patients or must discharge patients earlier than the optimal time for discharge," she told the committee. In addition, she reported that many VNAs have discontinued Medicare participation or eliminated rural service areas.
She reiterated the industry’s call for elimination of the 15% additional cut scheduled for Oct. 1, 2000, as well as some type of outlier policy for high-cost, medically complex patients. She also urged the committee to increase the IPS per-visit cost limit and provide relief from "financially disabling overpayments."
Earlier in the week, the National Association for Home Care (NAHC; Washington) concluded that based on analysis of the OSCAR data, the pace of home care closures seems to be accelerating. "The average monthly rate of closings has grown from 36 agencies per month in December 1997 to 108 agencies per month by August 1999," according to NAHC. Worse yet, HCFA’s most recent data is based on provider numbers and not sites of care, according to the association. "If branches were included, the totals would be much higher." NAHC hinted that actual agency closures may now be approaching the 3,000 mark.
The crisis is far from over, argued NAHC. It reported that data from one home health fiscal intermediary showed 91% of agencies had overpayments that totaled more than $1 billion.
The House Commerce Committee is currently working on legislation that would restore some of the reimbursement eliminated by the BBA. But all sides agree that agreement on the size and scope of that funding is very uncertain.
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