Home Health Cuts and Copayment in Administration’s FY 2015 Budget Proposal Endanger the Medicare Program’s Most Vulnerable Beneficiaries

March 4, 2014
Contact: Ellen Almond

Home Health Cuts and Copayment in Administration’s FY 2015 Budget Proposal Endanger the Medicare Program’s Most Vulnerable Beneficiaries

Home health community leaders warn such changes would directly impact seniors who are older, poorer, sicker and more likely to be female and minority than all other Medicare beneficiaries

Washington, DC – Home healthcare community leaders today expressed deep concern in response to President Obama’s Fiscal Year 2015 Budget, which proposes to cut Medicare funding for home health services and re-impose a copayment on Medicare home health beneficiaries. Leaders warn that such policies will disproportionately impact women and the seniors who are documented as being older, poorer, sicker and more likely to be female and minorities than all other Medicare beneficiaries.

The Partnership for Quality Home Healthcare — a coalition of leading home health providers dedicated to developing innovative reforms to improve the program integrity, quality, and efficiency of home healthcare for our nation's seniors — strongly advocates against further cuts to Medicare home health funding and the re-imposition of a copayment on Medicare home health beneficiaries. Instead, the Partnership urges adoption of targeted program integrity, value-based purchasing and post-acute care bundling reforms that would not impact vulnerable beneficiaries or their access to care.

With respect to the Budget’s proposed Medicare home health cut, the Partnership points out that an unprecedented 14 percent reduction in Medicare home health funding has just been implemented, beginning on January 1, 2014. This cut, which was authorized (but not required) under the Affordable Care Act, has been projected by the Obama Administration as driving “approximately 40 percent” of all home health providers to suffer net losses. In response to the Budget’s proposed copayment, the Partnership notes that Congress repealed beneficiary cost sharing for home healthcare patients in 1972 because it failed to reduce healthcare costs and instead drove seniors to higher-cost institutional settings.

New research by Avalere Health and Dobson|DaVanzo & Associates demonstrates that Medicare home health beneficiaries are poorer, sicker, and more likely to be women and minorities than the general Medicare population. The key findings are highlighted below:

Avalere Home Health Beneficiary Study: Key FindingsMedicare Home Health BeneficiariesAll Other Medicare Beneficiaries
Beneficiaries aged 85+24.4%12.1%
Beneficiaries with 4+ chronic conditions74.7%48.5%
Beneficiaries needing assistance with 2+ Activities of Daily Living (ADLs)23.5%7.6%
Beneficiaries at or below 200% of Federal Poverty Level (FPL)66.2%47.9%
Beneficiaries from ethnic or racial minority population19.3%14.9%
Dual-eligible Medicare-Medicaid beneficiaries26.7%17.7%

“In light of data demonstrating the vulnerability of Medicare home health beneficiaries, the proposed budget is of great concern,” stated Eric Berger, CEO of the Partnership for Quality Home Healthcare. “Forcing further cuts or a copayment onto this population could make it impossible for many to continue receiving care in the setting they prefer – their home. Many seniors – especially in rural communities – will have no other option than to seek care in higher cost institutional settings, resulting in increased costs for the Medicare program.”

As it has been in years past, the Partnership urges the Administration and Congress to enact program integrity reforms that specifically target the isolated nature of home health fraud and abuse, rather than imposing across-the-board cuts and copayments that target innocent seniors. Data demonstrate that waste, fraud and abuse are largely limited to isolated regions of the country and that targeted reforms are a proven method for reducing aberrant behavior and generating significant savings.

“Program integrity reform and targeted solutions are the best and most sustainable approach to achieving savings in the Medicare program without harming vulnerable seniors and honest providers,” added Berger. “For this reason, the Partnership has put forth a targeted solution called the ‘Skilled Home Health and Integrity Program Savings’ (SHHIPS) proposal, which offers solutions to stop the payment of aberrant claims before they occur and tightens the claims review process and conditions of participation standards. These reforms are based on a 2009 outlier payment reform, which is on track to achieve $11 billion in savings over 10 years.“

The Partnership is also a member of Fight Fraud First! — a coalition of groups representing millions of older Americans, persons with disabilities, minorities, veterans and healthcare providers urging lawmakers to eliminate waste, fraud and abuse in the Medicare program instead of imposing further cuts or a copayment.

Additionally, a new research analysis titled Bundling and Coordinating Post-Acute Care (BACPAC), completed by Dobson DaVanzo & Associates, LLC, demonstrates that bundling payments for post-acute care and placing patients in the most cost-effective setting, including home health, can achieve substantial savings and keep patients out of the hospital.

“We urge lawmakers to enact pro-patient reform solutions instead of imposing cuts and increasing costs that directly impact the Medicare program’s most vulnerable patient population,” added Berger. “Home healthcare is clinically-advanced, cost-effective, and patient preferred, and the millions of seniors who depend on it as well as the dedicated professionals who provide it deserve thoughtful reform policies.”

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