Medicare cuts threaten viability of home health-care, agency operators say
As a director of Southwest Florida Home Care Inc., which serves clients in both Lee and Collier counties, Ryan anticipated Medicare reimbursement cuts, so he started reducing overhead expenses.
“We are using a lot of ‘as needed’ nurses,” he said. “We still have a couple of full-time employees. Basically it is getting more and more difficult to provide services and not lose money.”
The U.S. Centers for Medicare and Medicaid is reducing Medicare reimbursement by 3.7 percent starting Oct. 1 to home health-care agencies and proposes a 5 percent cut in 2012, according to the National Association for Home Care and Hospice.
An estimated 53 percent of the nation’s home health-care agencies will face a negative margin and not make any money with Medicare after a 5 percent cut, according to the Moran Group, consultants retained by the national home-care association to analyze the effects.
In Florida, where 2,300 home health-care agencies operate, the expectation is 46 percent of the agencies would face operating losses with Medicare.
In order to survive and reduce costs, some agencies will cut back on staff visits to patients, said Louise Stewart, one of the owners of AmeriCare Home Health Services Inc., which has clients in Lee and Collier. She serves as the agency’s care management administrator.
“Who’s going to pay the price? The patient,” Stewart said. “They won’t get the care they need and that is the challenge. It’s difficult and heartbreaking.”
Stewart said smaller agencies especially will be pinched and some will go out of business.
“(But) I think everyone is feeling it,” she said.
On top of the reimbursement cuts to the agencies, patients could face a $100 co-payment for each episode of home care they receive, except in instances when they are discharged from a hospital. A home health care episode is 60 days of services.
The co-pay is one of several of President Barrack Obama’s proposals to reduce health-care spending, submitted this past week to the House-Senate committee aiming to address the federal deficit.
The $100 co-pay would start in 2017 and would generate $400 million over 10 years. Another of Obama’s recommendations would be to increase by $25 the Part B deductible for physician visits, which would start in 2017 for some beneficiaries.
There hasn’t been a home health-care co-pay since the 1970s, said Kyle Simon, government affairs director for the Home Care Association of Florida.
The independent Medicare Payment Advisory Commission also recommends a co-payment of $150, he said.
“Who can afford that?” Stewart said. “They can hardly make their deductible payments.”
To avoid the co-payment, Medicare beneficiaries will say ‘no’ to home-care services and instead will rely on a spouse or other family member, Stewart said. Others will go without needed care and wind up in the hospital.
None of the proposed cuts are logical because people do much better at home in their recovery and it is less costly than care in a nursing home or hospital, said Ryan, who serves on the Florida home care association board.
“That is quite a lot for an out-of-pocket expense for elderly people,” he said.
Ryan said he has written letters to members of Congress in Southwest Florida about the proposed reimbursement cuts and co-payment to patients but his message fell on deaf ears.
“They sent a form letter explaining their position,” he said.
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