Medicare Cuts, Copayments for Home Healthcare Beneficiaries Hardest on America's Poorest, Most Vulnerable Seniors

February 13, 2012
Contact: Leigh Ann Bradley
(703) 548-0019

Medicare Cuts, Copayments for Home Healthcare Beneficiaries Hardest on America's Poorest, Most Vulnerable Seniors

As President Obama’s Budget Calls for Medicare Cuts and Increased Fees on Seniors, Home Healthcare Leaders Ask Lawmakers to Instead Focus on Program Integrity Reforms

Washington, DC — In response to President Obama's budget released today, the home healthcare community continues to express concern that proposed Medicare cuts and beneficiary copayments for home healthcare would limit patient access to the clinically advanced, cost-effective care that an overwhelming majority of American seniors prefer.

Instead of across-the-board Medicare cuts or mandatory copayments for low-income seniors, the home healthcare community believes that Washington should focus on strengthening Medicare and Medicaid through program integrity reform. Analyses of Medicare data show that targeting the small number of providers who bill outside national norms would significantly reduce annual Medicare spending.

"Simply put, there's a better way to save money than by increasing costs on America's seniors and endangering the high-quality, low-cost services they need. That's why many lawmakers prefer program integrity reform, like the home healthcare community's detailed proposal, because it generates billions in savings without harming innocent seniors or cost-efficient providers," said Billy Tauzin, former House Energy and Commerce Committee chairman and senior counsel to the Partnership for Quality Home Healthcare.

The home healthcare leader points to recently released data from the Centers for Medicare and Medicaid Services (CMS) showing that payment reforms proposed by the home healthcare community in 2009 achieved nearly $1 billion in Medicare savings in 2010 alone — equivalent to nearly $11 billion in savings over the next 10 years. As a result, this policy serves as evidence that targeted program integrity reform can generate significant savings without impacting beneficiaries or cost-efficient providers.

Further, the home healthcare community warns that a copayment policy in home healthcare will actually increase Medicare spending and unfairly impact American seniors. An analysis conducted by Avalere Health found that more than three-fourths of non dual-eligible home health beneficiaries without secondary Medigap coverage would be responsible for the full copayment, which is seen as a significant financial burden on the home healthcare population, which tends to be poorer than the typical Medicare beneficiary. Further, the analysis found that mandating copayments on home healthcare could result in a variety of unintended consequences including cost-shifting from Medicare to Medicaid, which would be an added burden on state budgets, which are already in a fragile state.

State lawmakers have also expressed concern over this potential cost-shift and warned of the financial strain this may cause to state Medicaid programs. Governor Martin O'Malley (D-MD) wrote in a letter to the director of the National Economic Council, "New fees for home healthcare in the Medicare program can also drive Medicaid costs, which would just push the budgetary hot potato down the line." Likewise, Governor Nathan Deal (R-GA) wrote, "a copayment requirement would only serve to shift thousands of low-income seniors out of home-based care into much more costly nursing homes and impose billions of dollars in additional Medicaid costs onto the states."

"We ask Congress to strongly consider the solutions the home healthcare community has put forth, which achieve significant savings and delivery system improvements without asking our nation's sickest and poorest seniors to shoulder the burden of an expensive copayment, which many patients simply cannot afford," added Senator John Breaux (D-LA).

The Medicare Payment Advisory Commission (MedPAC) has also acknowledged that copayments could drive patients to more expensive care noting, "A disadvantage of requiring beneficiary cost sharing for post-hospital episodes of home health care is that it could encourage beneficiaries to use higher cost post-acute care settings, such as skilled nursing facilities or inpatient rehabilitation facilities."

Skilled home healthcare is clinically advanced, cost-effective and patient preferred. Home healthcare allows patients to receive a variety of care services at home, including cardiac and pulmonary care, neurological rehabilitation, intravenous therapy and chronic disease management, among others; it is significantly less expensive than care provided in traditional settings, costing just $145 per visit compared to $1,805 for a one-day hospital stay; and research shows that 89 percent of American seniors prefer to age in place, stay home and remain independent.

Nationwide, more than 3.3 million Medicare beneficiaries receive skilled home healthcare services to treat acute illness, long-term health conditions, permanent disability, or terminal illness.

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