Home health problems

What do you get when you make home care an efficient, effective and humane way to treat Medicare patients? Penalized, according to Congress, which used the event of a balanced budget to roll back home-care expenditures. Maine, and the rest of New England, pay an unfair price for these cuts.

That’s because, generally, New England home-care providers offered service oat a lower cost than the rest of the nation. With the last budget, Congress agreed to cut $16.2 billion over five years from home health outlays by basing 75 percent of agency payments on 1994 average costs, minus 2 percent. The cost system is to remain in place for two years while data for a prospective payment system (PPS) is gathered and the new system is built.

This means a home-care agency that has had lots of waste, fraud and abuse is going to do just fine with the interim pay system. An agency that played by the rules and was frugal with tax dollars is going to get hurt. Maine agencies, on average, fall into the get-hurt camp. But this is not the only perverse outcome of congressional budget engineering.

The interim system pays on a per-patient basis, without regard to the types of services each patient might need. An agency will get the same for delivering a lot of services or a little. The federal government is taking honest home-care agencies, putting them in financial peril by cutting reimbursements, then giving them incentives to reduce expensive care or avoid accepting patients that need a lot of care. And it is not as if home-care patients can simply stroll to a hospital campus for treatment if they aren’t receiving satisfactory attention from a home-care agency.

A Georgetown University policy institute recently examined the payment system and came to this conclusion: “Both the interim system and the PPS may potentially restrict access to care … rather than eliminate unnecessary services or care considered beyond Medicare’s scope. … Even with cautious implementation, expenditure control in Medicare’s home health benefit is likely to reduce services, particularly for beneficiaries with complex medical problems.”

In a statement recently to the Senate Special Committee on Aging, Sen. Susan Collins pledged to introduce legislation that would change the formula for reimbursing agencies. Rep. John Baldacci this week said that he too would support changing the interim payment plan. Their challenge will be to persuade their Southern colleagues, where the reimbursement rate is considerably higher, to go along. Fortunately, home care has not expanded as rapidly as predicted recently, so Congress may be able to identify funding for low-cost states without taking it away from more expensive regions.

Maintaining the current Medicare plan until a more rational interim system could be devised would be a good start. Longer term, of course, Congress should look into why a home-care visit costs more in Biloxi than in Bangor.