Three committees in the US House of Representatives – House Ways & Means, House Energy and Commerce, and House Committee on Energy and Labor, each with their own subcommittee on health – have jointly submitted a health care reform proposal known as the Tri-Committee Health Reform Bill.
The legislation includes the Medicare Payment Advisory Commission’s (MedPAC) recommendations that Congress eliminate the home health market basket update for 2010 and accelerate the application of the 2011 coding creep adjustment proposed for 2011 (2.71 percent) to 2010 – reducing current rates in 2010 by 5.46 percent. MedPAC also recommended that Congress direct CMS to rebase home health payments in 2011, using 2007 costs as a base.
this effort would bring devastating cuts, which over ten years would take $51 billion from the Medicare home health program, according to the Congressional Budget Office (CBO).
Recently, the Alliance’s Executive Director Pat Kelleher and Board President Patricia O’Brien sent a letter (see below) to Massachusetts Congressmen highlighting our major concern over this proposal. Please help us advocate by clicking here and sending an email message to YOUR Congressional representative (see first message under “Federal or National Issues”).
Dear Congressman:
On behalf of the 150 home care agencies that comprise the Home Care Alliance of Massachusetts, I write to express our strong concerns with provisions in the U.S. House of Representatives’ “Tri-Committee Health Reform Proposal,” which calls for catastrophic cuts to the Medicare home health program.
It is estimated that the House proposal would cut home health Medicare payments by $51 billion over ten years. The proposal would eliminate the home health market basket update for 2010 and accelerate the application of the payment adjustment proposed for 2011 (2.71 percent) to 2010—reducing current rates in 2010 by 5.46 percent. For Massachusetts, this means that Medicare home health reimbursement would be reduced by more than $16 million in the next year alone and more than $300 million over the next five years.
Cuts of this magnitude would deal a devastating blow to Massachusetts home health care. Massachusetts home health agencies have seen almost no or miniscule increases in our Medicare payments over the last seven years. Many home health agencies are already in financial jeopardy as a result of Medicaid cuts and inadequate Medicare Advantage payments.
Using cost report data from 2008, we have estimated that should these reductions be sustained, half of the home health agencies in Massachusetts, including virtually all of our safety net VNA’s, would have negative operating margins in FY 2010.
The recommendations for home health cuts come from MEDPAC studies that do not reflect what is happening in your district. These studies use a weighted average, combining all home health agencies into a single unit, rather than recognizing the individual existence and local nature of each provider. MEDPAC’s recommendations also fail to evaluate the impact of the completely reformed – and reduced – home health payment model put in place in 2008.
The Home Care Alliance supports health care reform and coverage expansion that is based on sound health care policy principles and builds on the strengths of our current system. In supporting our call for reversing this cut, we call your attention to a study by Avalere Health (May 11, 2009: see attached) that found home health use saves Medicare dollars by reducing hospitalizations and nursing home stays. Based on the findings in this study, an estimated $30 billion could be saved over the next ten years by expanding access to home health for chronic disease patients.
An underfunded home health system would hurt the most vulnerable elders in your district and will cause a ripple effect in the rest of the system backing people up in hospitals and costing Medicare and the taxpayers more money (After the Balanced Budget Act of 1997 cut billions from the Medicare home health benefit, Medicare expenditures on skilled nursing facilities and hospitals skyrocketed).
The Home Care Alliance is aware of the pressure on the current Medicare program to find efficiencies that can support expanded insurance access. Our member agencies have supported efforts – endorsed by the National Association for Home Care – that would
· Enact a moratorium on new certifications of Medicare participating home health agencies. Most of the questionable growth in home health expenditures has occurred in states with a saturation of home health agencies. For example, Texas has had a 200% increase in spending following a 100% increase in HHAs. In Houston alone, there are more HHAS than in New York, New Jersey, Pennsylvania, and Maryland combined
· Institute a revenue-based provider-specific cap on outlier payments prohibiting outlier payment on a set percentage of an HHA’s Medicare home health revenue in a calendar year. There is strong evidence that a minority of home health agencies are abusing the outlier payment system. While small in numbers, these providers have taken well in excess of $1B in outlier payments from the total of $16B in annual home health expenditures
The potential savings through this proposal are $4-8B over 5 years/ $16-23B over 10 years.
We appreciate your support for our agencies and the frail elders that are the beneficiaries of our services.
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