I know this shouldn't surprise me, but I continue to be annoyed by the misrepresentations about home health care and home health care reimbursement being bandied about by the government, the press, and others. Over the weekend, the following article appeared on the Huffington Post over the weekend. Its title is about insurance company pay, but most of the article is about maneuvering in the Senate over the weekend regarding Medicare cuts.
The article discusses efforts to undo the draconian cuts to the Medicare home health benefit. (All of which failed). In the course of discussing the article there are a number of things said that, in my opinion, do not reflect the reality of home health care. The democrats are quoted as saying the Medicare cuts are necessary to make the system more efficient and to reduce overpayments. I love the use of the word overpayment. For home health, saying that the cuts reduce overpayments is code for reducing profits. Congress has bought into the notion that home health providers are running huge profit margins and therefore, should see a reduction. (Never mind the ongoing reduction since the revised PPS came out.)
The article states that MedPAC estimates that without these cuts Medicare home health agencies would be overpaid by 12.2%. Stating that this 12.2% is an overpayment implies it is money that the agency received but did not earn. But that is not the issue here. An agency that does the work and gets paid at prevailing rates gets exactly what they have earned. In Medicare parlance, an overpayment is when you receive Medicare reimbursement for services you did not provide, services that were not necessary, etc. Overpayments are identified through audits, etc. This 12.2% goes back to the MedPAC 15% profit estimation contained in the last report. I am guessing they are citing a 12.2% overpayment, because they feel some profit is acceptable, just not 15%. In other words, what the reporter ought to say is that, based on an estimate by one government agency, Congress feels that home health care agencies are making too large of a profit.
Of course, this goes back to a fundamental question - is the 15% profit figure a valid number? I have spoken to agencies and the opinions on this vary, although very few agencies that I am aware of are making a profit at this clip. However, even if they were able to do so on Medicare, there overall bottom line is most likely not doing as well as MedPAC and Congress like to pretend. This is because the medicare "profit" is offset by losses on Medicaid home health. Medicaid home health reimburses at an even lower rate than Medicare and agencies use other income to offset the Medicaid losses. I have spoken to agencies who state the Medicare reimbursement is what allows them to accept the paltry reimbursement on Medicaid cases.
NAHC has estimated that the Medicare cuts will put 60% of home health providers out of business. In my world that is a pretty sure sign that home health providers are not making excessive profits at taxpayer expense. NAHC's estimate reflects the reality, home health agencies are surviving and maybe making a modest profit, but they are not raking in huge profits like they might have been in the early nineties. The fact is home health expenditures are increasing for many reasons, including the fact that people prefer to receive care at home.
Another issue that Congress, MedPAC, and this reporter ignored is how much more cost effective home health care is when compared to other models. The Avalere study demonstrated how home health SAVES Medicare money.
Home Health Agencies need to be calling their Senators and explaining that these cuts do not represent a curtailment of "overpayments", but a reduction to already meager reimbursement rates. Your Senators need to understand how these ridiculous cuts will impact you, your employees, and your patients. They need to be educated that home health providers are not soaking the government, but are doing their best to provide care to an expanding patient base on an ever dwindling reimbursement amount. They also need to know that the care you provide is more cost efficient than hospitals and nursing homes. (Your Senators may not be aware that under the home health PPS, CMS has been implementing a 7.5% reduction over the last few years.)
Senator Kerry can pass an amendment guaranteeing no changes in guaranteed home health benefits, but if there are no providers to provide the benefit, his guarantee is not worth the paper on which it is printed.
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