Home Care Law Blog

New legislation would make MedPAC an Executive Agency

Last week, Senator Rockefeller introduced legislation that would make MedPAC an executive agency.  In a press release issued at the time, Senator Rockefeller stated that it was time to "move MedPAC into the executive branch and away from special interests."  

The legislation would give MedPAC authority to not just recommend changes in reimbursement rates, etc. but to implement them directly.  The legislation would require rates to be set by set dates each year.  Once set, MedPAC rate determinations would not be subject to judicial review.  There is an allowance for input from providers, but Senator Rockefeller believes MedPAC are the "true experts" in this area.  (I think many of us in the real world would disagree.)

The legislation would technically rename MedPAC to be the Medicare Payment and Access Commission. This is part of the bigger picture of this legislation, which Senator Rockefeller view as necessary to an improvement in the health care delivery system.  In fact, Senator Rockefeller is touting this effort as part of the overall health care reform agenda.

The legislation will create three committees to advise MedPAC: The Council of Health and Economic Advisers; The Consumer Advisory Council, and the Federal Health Advisory Council. Each of these councils would assist MedPAC in its decision making.

Senator Rockefeller seems to think that this move would eliminate the ability of special interests to alter Medicare payment policies.  I think that may be an overestimation on his part.  Provider groups will still work to influence the payment process, especially given MedPAC's history of demanding rate cuts.  The legislation even implicitly acknowledges the role of "lobbying", because it includes the lobbying "cooling off" period. The legislation also notes that the Secretary would have to promulgate regulations to implement the recommended rates.  Promulgating regulations will require notice and comment.

The home health and hospice industry should be especially concerned about this bill, given the most recent MedPAC report.  MedPAC's experts do not seem to really understand home health care or hospice care.  They have always viewed home health and hospice as getting "too much".  If this passes, I can see the home health and hospice industry suffering more cuts in the future.  This is one more thing for providers to keep track of in the coming legislative session.

Increased wage and hour enforcement is coming

I meant to post this earlier today, but got a little sidetracked.  Just in case the increase in fraud an abuse enforcement wasn't enough, not it looks like the U.S. Department of Labor is going to be increasing it enforcement efforts.  The DOL's Wage and Hour division has committed to hiring 250 new field investigators.  This is a one-third increase in its staffing.  

This is a response to a recent GAO report.  Of the 250 new investigators, 150 will be wage and hour investigators for general wage and hour enforcement.  The other 100 new investigators will ensure contractors receiving stimulus money will follow applicable wage and hour laws.

For home health and hospice, now is a good time to make sure you are paying your employees properly.  Things for providers to consider are whether you are following the requirements of any exemptions you might be relying upon (if you are treating any employee as exempt), paying travel time, and properly calculating overtime. If you aren't sure, you might want to talk with your lawyer.  Wage and hour is one area where an ounce of prevention is definitely worth a pound of cure.

California fraud case and other news

On the heels of yesterday's post about increased fraud enforcement, today's L.A. Times is reporting yet another case of fraud involving California's In-home services program.  It seems that some workers in this program were submitting claims for services provided to clients who were hospitalized, in jail, or even dead.  The total amounted to $93,000 in claims for services that were never provided.

In a related story, over on the Huffington Post there is an article advocating to expand these type of self-directed care programs through the Community Choice Act.  The author goes so far as to say that the passage of the Community Choice Act is a civil-rights issue.

I won't address the claim that this is a civil rights issue, but I do think that the real issue here is that self-directed care is not a wise use of tax payer dollars.  There are many issues that get ignored in self-directed care, including, who is the employer, who pays payroll taxes, where is the oversight, how is quality measured, etc.  There is a law professor who raises the issue that self-directed care workers are disadvantaged, because of the murky employer/employee issues.  Basically the state does not want to be the employer and the care recipient often does not realize they are the employer.  (Now that author's approach is to unionize the self-directed care workers.  An approach that I think California would suggest is less than optimal.)  

The agency model that has been used in home health and private duty for years addresses these issues.  The agency is the employer.  The agency provides oversight.  The agency has worker's comp insurance.  The agency pays unemployment.  They agency screens caregivers.  The agency measures quality.  Etc. These are all features that are missing in self-directed care, to the detriment of the employees and the clients.

And another issue is the limited funding of home care in general.  Given that a cut for in-home care of all stripes seems to be coming, rather than adding another waiver program, that would require additional government resources to administer, that is easily abused, and that would have to be funded as well, wouldn't it make more sense to fund the home health and home care programs that are already in place?  The funding could go straight to providing for more services through already established channels.  One of the biggest reasons that there are waiver waiting lists is simply a lack of funding.  Over the course of time funding is shifting from nursing homes to home health and home care, but it takes time.  Adding more dollars to the current waiver programs would open up more spaces in waiver programs and address the "access" issue and probably do it faster, because states would not have to apply for and implement a new waiver program.  

Joint Medicare Fraud Enforcement Effort

Yesterday, the Department of Health and Human Services and the Department of Justice announced the creation of the The Health Care Fraud Prevention  and Enforcement Action Team.  This is a joint effort between the two agencies to increase fraud enforcement.  The announcement of this effort also included an announcement of the expansion of the Medicare Fraud Strike Forces.  

The press release also mentions that they will focus on prevention as well as enforcement.  The effort will adopt methods used in demonstration projects that focused on DME providers and suppliers.  These efforts increased site visits to suppliers to prevent impostors from posing as legitimate suppliers.  It will also increase training for providers on Medicare compliance.  It will improve data sharing between HHS and law enforcement to identify patterns that lead to fraud.  

The fact that this effort will include an increased emphasis on compliance should again serve to focus providers on the need to implement an effective compliance plan.  HHS and DOJ have specifically mentioned compliance and detection as part of this effort.  Home health and hospice providers should heed this warning and be sure they have a compliance program.

If you don't, or if you have one that you have not really worked with much, it is not too late to start.

One last point, given the specific mention of programs in Florida and LA, where we know home health was part of the problem, I can only wonder how much of this renewed effort may focus on home health fraud elsewhere.

More on California Rate Cuts

Well, it took some effort, but the feds seem to have agreed that California can cut the hourly rates it is paying to its in-home workers, without violating the terms of the ARRA.  You can read the whole story here.

This is the right outcome, but California had to jump through so many unnecessary hoops to do this.  The feds never should have gotten involved with California's in-home services rate setting.  It was a California budgetary issue.  Even though California was ultimately able to cut rates, this episode should serve as a warning to states about what happens when SEIU gets involved in in-home and other health care.

Home health and other reimbursement cuts in the news

Once again, reimbursement rate cuts are in the news.  Yesterday, The Senate Finance Committee released its report on ways to "raise revenues" for the President's health care plan.

Not surprisingly, the report adopts Medpac's recommendation on eliminating the market basket increase and rebasing home health reimbursement rates as two ways to raise revenue (read cut your reimbursement to spend elsewhere).  The report also raised the possibility of a provider specific annual cap on outlier episodes.  The report mentioned as a reason to "adjust" home health reimbursement the profit margins of home health and even suggested that for profit home health agencies have a profit margin of 18.6%.  It cites to a 2007 Medpac report, but those numbers are two years old now.  (And frankly seem almost mythical to me.  I think many home health providers would be shocked to find they have 18.6% margins.)  Regardless of the reality of home health profitability, the Senate Finance committee is now on board with Medpac in believing that home health "makes too much" and can "give back" to finance health care reform.  At some point, if home health keeps giving back, there is not going to be any home health care.  There are only so many efficiencies to be gained in this model of care.

The report targeted other providers as well, but given the President's budget and the Medpac report, home health reimbursement cuts seems more and more likely.  Home health providers need to make Congress aware that they are not getting rich on Medicare and Medicaid reimbursement, before Congress tightens the screws further.  Now more than ever the home health industry needs to be making calls and writing letters making Congress aware of the financial reality of home health and hospice care before decisions are made on bad information.  (I would love to see NAHC or some of the states do a study on profitability to counter Medpac's report.)

The Healthy Families Act

Well, here comes more legislation that may impact your day to day operations and your bottom line.  The Bill called "The Healthy Families Act" would require companies with fifteen or more employees to provide paid sick days.  The Bill would require employers to allow employees to accumulate one hour of paid sick time for every thirty hours worked up to seven days per year.  

What's great is the story talks about linking the passage of the bill to the swine flu.  That is just silly.  Requiring employers to give employees paid sick days, may be many things, but it is not a step to prevent the spread of swine flu.  

My question is how much more does Congress need to regulate providers.  While providing employees paid sick leave may be a good idea from a management perspective, it is not something that Congress should be dictating.  For employers that do not provide paid sick leave, there are many legitimate reasons (costs, etc.) why they are not providing it.  Mandating it will make it harder for businesses that are struggling to survive to continue surviving.

The good news is that this is the third time this legislation has been introduced into Congress, but it has never passed.  The concern is that it will pass this time, because there is not threat of a veto.  Home health, hospice, and private duty providers need to keep track of this bill and let their representatives know how this will impact them.  You might remind your representatives that many employees would prefer to have a job with no paid sick time than to have no job at all.

EFCA: Specter's new proposal

Well, Arlen Specter has come out with a new proposal on the Employee Free Choice Act.  You can read about it here.  He basically outlines two changes.  First, employers could keep elections, but allow mail-in ballots.  Second, alter the binding arbitration provisions to only require binding arbitration when the two sides fail to reach an agreement on their "last and best offer", instead of after 120 days as is currently in the proposed bill.

Maybe I am missing something, but those don't seem any better.  I mean really, how is a mail-in ballot any less likely to be the result of coercion the home than a representation card?  All of the elements are still the same.  Again, why are unions so opposed to secret ballot  elections?  They are truly secret and supervised by the NLRB.  Unions keeps decrying intimidation, but is a secret ballot election likely to involve more or less coercion than a card check or "mail-in" ballot.  How does an employer coerce and employee in an secret ballot election, when the employer does not know how anyone voted?

On the binding arbitration, a lot will ultimately depend upon regulations promulgated later, but I can only wonder if the "last best offer" language gives the union and advantage in negotiations.  If the union makes an offer and says "it is our last best offer", if the employer does not move off of their position, it would seem that cold trigger the arbitration process earlier.  Given that the arbitration process is likely to favor the unions, this provision would simply allow the union to dictate when the negotiations happen.  As to why the unions want arbitration, here is an interesting article discussing the reason the unions are for it.

Missouri Provider Tax

According to an article on California Healthline, the Missouri legislature approved a bill last week that imposed a caregiver tax on in-home care providers in Missouri.  According to this article, the tax is designed to increase Missouri's matching funds, which will result in the state receiving more Medicaid dollars from the federal government.

Missouri in-home providers will be assessed a tax on gross receipts.  This tax cannot exceed 6.5%. The actual rate will be set by regulation.  (I don't know what amount it will start at, but anyone care to wager where it will stop?) The bill defines in-home services as home maker, personal care, self-directed, chore, and respite services, amongst others. The good news for home health agencies is that they are specifically excepted out of the tax.

I don't know how much more matching funds this will produce for in-home services for the state or how much more money they will receive.  According to the article, a similar tax on other providers raised $1.1 Billion and brought in an additional $1.8 billion in matching funds.  The article did not state who received this money.  If this tax results in a similar increase in federal funds for in-home care and if the providers get most of the increase, they may end up better off than before the tax, although it seems like there might have been a better way to structure this than with a "tax."

Ooops, maybe they didn't agree to those cuts.

This does not have a lot to do with home health care directly, except insofar a it impacts the progress of health care reform.  (And I find it entertaining.)  As you may recall, earlier this week, I wondered why any health care organization would have signed on to the 1.5% annual "cut" that that AMA and other groups allegedly had agreed to on Monday.

Well, now we know, it seems they did not actually agree to such cuts.  There are four or five stories today in which various entities are saying, "Whoa, that's not what we agreed."  They are saying now that what they agreed to was to gradually increase the cut to get to 1.5% within ten years.  Now, this could be due to member backlash forcing the associations to back away form this agreement or, more likely, it is because they did not really agree to the spending cuts that were reported.  For more you can read more here.

There is also an interesting story about a Congressman, Rep.  Boustany of Louisiana, who is a retired physician haranguing the AMA for agreeing to this pact. 

This should get interesting in the next few days, as I am sure the White House will respond to these denials.  At least homecare and hospice have been consistently opposed to cuts in home health spending.  (Hard not to be when you are already scraping to survive.)