Republican or Democrat? Doesn’t matter. Here is the message that you can take to Congress in any season.
Over the 12-year period from 1993 to 2005, Medicare outlays grew from about $150 billion annually to nearly $340 billion. Expenditures more than doubled for hospitals to almost $160 billion, and for physicians to about $85 billion per year.
In the last 3 years, while Medicare spending has skyrocketed by $50 billion, HME has been flatlined and home health care has increased only marginally. Together, they now constitute about 6% of program expenditures. The percentage will fall considerably below 6% for 2006 as Part D prescription drug costs are factored into overall Medicare spending.
In spite of home care’s small bite of Medicare, our benefits remain on the table as potential offsets as Congress seeks to address the physician sustainable growth rate (SGR) dilemma—a 5% reimbursement reduction on January 1. During the upcoming 110th Congress, home care providers will continue to be at risk of reduction of the oxygen rental period from 36 to 13 months, and loss of the 3.3% home health update already announced for 2007.
The American Medical Association and physicians from around the country have brought intense pressure to bear on members of Congress to revoke the SGR reduction. With Republicans about to cede control, one SGR approach under consideration is a multi-year fix based on recommendations due from the Medicare Payment Advisory Commission (MedPAC) in March. Such a solution could be paid for by reducing or eliminating the Medicare Advantage (MA) stabilization fund, which Democrats do not believe must remain in Medicare Part C—and by other cuts.
All home care providers should take advantage of the time before the new Democratic-controlled Congress begins work in earnest. Tell them again that home care is at risk with any physician SGR legislation. Ask your Representatives to tell committee members of the Senate Finance, House Ways and Means, and House Energy and Commerce—as well as their party’s leadership—to say “no” to further home care reductions. Again, emphasize the message that home care is cost-effective, clinically effective, and consumer preferred.
AAHomecare has compiled a number of studies that demonstrate the value of home care to patients as well as to payors, whether traditional or managed care, Medicare, Medicaid, private insurance, or consumer funded. This is true for patients needing skilled nursing and/or therapy services under the Part A home health benefit, and those requiring long-term oxygen therapy, IV treatment at home, and PMVs under Part B.
Though not covered by Medicare, telehealth services are producing dramatic results with the benefits accruing to both patients and payors. AAHomecare’s cost-effectiveness studies include a number of telehealth programs that combine targeting of certain conditions such as:
Telehealth Success Stories • A large integrated health care system initiated a home care program directed at Medicare patients with congestive heart failure. The result was an 81% reduction in hospital readmissions, an 81% decrease in emergency department visits, and an 87% reduction in hospital length of stay for those patients who were readmitted to the hospital.
• Another program developed for wound care patients combines certified wound care nurses, digital camcorders, and a telehealth monitor—which allows for live video. Healing time was shortened by 50% and there were no readmissions to the hospital. The provider’s supply costs were reduced by 34% for participating patients.
Funding of telehealth would make great financial sense for Medicare. With successful programs like these replicated around the country, the Medicare program could save billions of dollars, and improve quality at the same time. In fact, reducing the rate of hospitalization is considered the number one marker for good quality in home health care by CMS, MedPAC, and Congress.
Several Congressional offices have asked AAHomecare staff to identify (from our cost-effectiveness studies) the characteristics of a successful home care-centered health care delivery system for possible pilots or demonstrations. These characteristics include: care coordination by home care specialists trained in managing patients with multiple chronic conditions and targeting specific diseases, in particular CHF, COPD, diabetes, and wound care, through a combination of skilled home care staff, evidence-based best practices, and technology—especially telehealth.
Making home care the center of the health care delivery system is not so far-fetched. In fact, the Bush administration believes home care is the answer to the problem of the spiraling cost of the Medicaid program. Health and Human Services Secretary Mike Leavitt calls home care less expensive, “radically more efficient,” and “where beneficiaries want to be served.” Consequently, he is urging the states to rebalance their Medicaid programs between institutional and home and community-based care. This principle, valid for Medicaid, is equally valid for Medicare. The principle is now established. We are halfway there.
Ann Howard is director of federal policy for AAHomecare, Alexandria, Va. She can be reached via e-mail: ahoward@aahomecare.org.
In the last 3 years, while Medicare spending has skyrocketed by $50 billion, HME has been flatlined and home health care has increased only marginally. Together, they now constitute about 6% of program expenditures. The percentage will fall considerably below 6% for 2006 as Part D prescription drug costs are factored into overall Medicare spending.
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