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Home Health, Beneficiary Advocates: W&M Cost-Sharing Reforms Would Hike States' Costs

Published by Inside Health Policy
Michelle M. Stein
August 16, 2013

Home health stakeholders argue that re-instating home health co-pays would not only burden beneficiaries -- including some with Medigap plans that won't cover the co-pays -- but also would hike states' costs because about 15 percent of Medicare beneficiaries are dual eligibles, in comments on the House Ways & Means Committee's draft Medicare reform legislation. The draft bill would increase the income-related premiums for Medicare Parts B and D, increase the annual Medicare Part B deductible, and create a copay for home health. Beneficiary advocates also reiterate concerns with the proposals, but the Federation of American Hospitals says the committee's proposals have the potential to work with the current slowdown in Medicare spending to produce savings for the Medicare system.

Ways & Means unveiled the draft legislation on beneficiary cost-sharing in July, much to the disappointment of home health and beneficiary advocates, who said at the time that the draft was made up of “regurgitated bad ideas” (see related story).

The draft bill calls for an increase in the Part B deductible by $25 for beneficiaries who enter the program starting in 2017, with similar increases in 2019 and 2021. It also raises the lowest income-related premiums from 35 percent of the cost of the program to 40 percent and caps the premium costs at 90 percent of the program's cost. The increase would go into effect in 2017 as well, but would affect all Medicare beneficiaries. The draft sets the home health copay at $100 for home health services that don't follow a stay in a hospital or other medical facility, and would only affect beneficiaries entering Medicare in 2017 or later.

When the draft was released, Ways & Means Chairman Dave Camp's (R-MI) staff told other congressional offices in an email that “these policies are from the 2014 President's budget and are not the position of the Ways and Means Committee,” but that “we feel it is important to give the public an opportunity to comment.”

The Partnership for Quality Home Healthcare, Fight Fraud First! and the National Association of Homecare and Hospice, as well as beneficiary advocates, reiterate their concerns that a home health copay would lead to beneficiaries forgoing care or being cared for in higher-cost institutional settings. The reasons that Congress eliminated the home health co-pay in 1972 are the same reasons that Congress should avoid re-instituting now, the home health groups say.

“Reinstating the home health copay today would undo the process made in efforts to reduce unnecessary hospitalizations and nursing home stays,” NAHC says. The stakeholders point to an Avalere Health study that found a home health co-payment could lead to $16.7 billion increase in Medicare spending.

PQHH, NAHC and AARP also say the co-payments would shift costs to the states, as about 15 percent of Medicare beneficiaries are dual eligibles. PQHH says that “due to the Medicare home health beneficiary population's generally low income, a home health co-payment would impose higher costs on States, as patients shift to more expensive settings and because their Medicaid programs would have to cover the cost of the copayment for dual eligibles and Qualified Medicare Beneficiaries.”

PQHH also points to previous letters from Georgia Gov. Nathan Deal (R) and Maryland Gov. Martin O'Malley (D) urging Congress and the administration to avoid instituting home health copays as it would increase state Medicaid costs, as well as Medicare costs.

Such copays would also work against state Medicaid programs' efforts to move beneficiaries from institutional care to home-based care, PQHH says.

See the full article here.

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