THINGS ARE LOOKING UP   
FOR HOME CARE  
By Ellen Caruso, HCAC Executive Director 

The snow is falling in Colorado but things are looking up for home care! 
 
BBA ’97 Relief 
Just hours before adjourning for the holiday recess, both houses of the U.S. Congress agreed to delay the additional 15 percent cut in reimbursement for home care providers that was scheduled to go into effect next October. President Clinton signed the legislation into law on Monday, November 29th.   

Stopping further cuts from occurring in October 2000 was the top priority of the unified home health community this year and is seen as a tremendous victory for home care. The final compromise:   

~ delays the 15 percent cut until one year following the implementation of the home health prospective payment system. 
~ requires a study of the need, if any, for further cuts in home health. 
~ increases by two percent in FY 2000 home health agency per beneficiary limits that are currently under the national median. 
~ excludes DME from home health prospective payment consolidated billing requirements. 
~ limits the surety bond requirement so that agencies would only be required to purchase bonds for four years; allows one bond to suffice for agencies participating in both Medicare and Medicaid; and limits the value of the bond to the lesser of $50,000 or 10 percent of agency revenues from the program(s) in the previous year. 
~ provides $10 per beneficiary during fiscal year 2000 to help cover OASIS costs. 
~ slightly increases the hospice market basket update. 
~ requires a study of costs and privacy issues related to OASIS collection. 
~ provides a bump in the updates for DME and oxygen for 2001 and 2002. 
~ suspends HCFA’s ‘inherent reasonableness’ authority for pricing DME until the General Accounting Office submits a report to Congress on its impact. 

The final agreement also offers other health care providers some relief to the onerous requirements of the Balanced Budget Act of 1997 and will cost $12 billion over the next five years. The bill also: 

~ strengthens rural hospitals; 
~ creates incentives to expand Medicare+Choice Options for Seniors; 
~ places a two-year moratorium on the $1,500 cap on physical therapy and other rehabilitation services, and  
~ increases Skilled Nursing Facility payments for medically complex patients. 

Go to top

The rules were initially presented by HCPF staff on September 10th when the nine-member policy board heard extensive protests from the home care providers. On October 8th, the board listened to four more hours of testimony by home care providers, consumers and advocates for the disabled community. The issue was then tabled for further discussion and deliberation at the board’s November meeting. 

In a letter to members of the board before the November meeting, HCAC requested support of the association’s position on four controversial sections of the proposed rules:  
 

“Thank you so very much for your extreme patience and understand-ing but most importantly thank you for listening to the lengthy testimony on the proposed home health rules at the September and October Medical Services Board meetings. 

“We want you to know that the home care association is committed to working with the department to make our state home care programs as efficient as possible. We have asked to meet with the department on the possibility of developing an entirely new way to reimburse home care agencies similar to the case mix approach recently adopted by nursing facilities. 

“Regarding the proposed rules, since the chair has indicated he will not allow further testimony on this issue, we ask your consideration of the following: 
1. New rules have already been promulgated (in April and July) to solve the Teach and Assess and Unbundling issues that have been identified. 
2. Home care should be growing and is expected to grow in light of the increasing numbers of VERY elderly, VERY frail, and VERY disabled individuals in our society. 
3. Home care reimbursement has not kept up with inflation these past 10 to 15 years. 
4. Home care is the least expensive setting for providing health care and it saves government and private payors money. According to the department, home care saved some $34 million in 1997 in hospital and nursing home avoidance. We have identified several areas where the state could save thousands of dollars a day by simply shifting funds from one provider to another and truly making the continuum of care work. 
5. Fraud and abuse is not universal but seems to be concentrated on a very few providers and there are existing mechanisms to deal with this abuse. 

“On November 12th, we ask you to support home care providers in Colorado by voting to: 
1. Change the reimbursement formula for home health aides from a “per visit” basis to reimbursement based on time, with daily caps. (This change would be budget neutral.) 
2. Use Condition Codes (not revenue codes) to track patient specific information. (Please see attached letter which outlines our suggested tracking mechanism.) 
3. Reimburse necessary teach and assess visits at the same rate as other nursing visits. (These visits are as important if not more important than other visits.) 

4. Delete burdensome “NORMS” from home care rules. 

“Please call me if you have any questions about our position on the proposed rules.” 
    — Ellen Caruso, Executive Director

Prospective Payment Regs Published  
The long-anticipated Home Health Prospective Payment System proposed regulations have been published. The 378-page document was printed in the Federal Register on October 28, 1999.  The document is available for perusal on the National Association of Home Care’s web site (www.nahc.org). The home care community has until December 27th to comment. (see side bar)  

The Health Care Financing Administration (HCFA) has posted on its web site the public use data files associated with the draft notice. The files contain information from the PPS cost report audit, a provider-level episode file, nonroutine medical supply costs and a “grouper pseudocode” that contains the logic for classification of patients into one of the 80 Home Health Resource Groups (case-mix). (www.hcfa.gov/stats/pufiles.htm) 

HCAC has scheduled several PPS-related educational events including a 90-minute audio-conference held on December 2nd which featured local  PPS expert Kimberly McKay of Baird Kurtz & Dobson, CPA, and an all-day PPS seminar in Denver in February 2000. 

Go to top 

Wellmark Discontinues Role 

On November 9th, Wellmark, Inc., the nation’s second largest of the five regional home health intermediaries, announced it will discontinue its role as a home health intermediary and Part A contractor for the Medicare program effective in early 2000. The uncertainty of federal funding and increasing cost and complexity of doing business as a Medicare contractor contributed to the decision, a Wellmark spokesperson said. Recent federal legislative proposals include as much as a seven percent reduction in FY 2000 funding for Medicare program administration. HCAC is currently gathering information from other states about their experience with other fiscal intermediaries. 

Colorado Dept. of Health News 
 
Priscilla Ezell, director of Health Care Facilities at the Dept. of Public Health & Environment, announced in November that 59 agencies have closed in Colorado since October 1997. Of these, 44 closed their doors in 1998 and 15 have shut down so far in 1999. There are currently 149 certified agencies operating in the state. Ezell also reported: 

~  Of the 59 closures, 11 were in Colorado Springs and 20 were in the Denver metro area, with the remaining scattered throughout the state. 
~   In 1997, there were 17 counties without a home care agency and today these same counties remain the only ones without an agency.

Y2K News 
 
A data base listing the state’s most vulnerable patients will be operational by December 31, 1999. The Colorado Dept. of Public Health & Environment has asked all health care providers to submit information on their patients so that the department can coordinate with local emergency providers in case of failure in telephone, transportation and other vital services.  

OASIS UPDATE 
 
Mina Solz of the Colorado Dept. of Public Health & Environment reported that only three Colorado agencies have not yet transmitted OASIS data to meet the new requirements. HCAC and the department plan an OASIS UPDATE audio conference in early January.  

Report Reveals Medicare Cuts 
To Home Health Hurting Access to Care; 
Helps Bring About BBA Reform 
WASHINGTON, D.C. -- George Washington University Medical Center Finds Sickest Patients Most Vulnerable to Losing Care...  

Medicare cutbacks for home care services, enacted under the Balanced Budget Act of 1997, are jeopardizing the health of the sickest, most vulnerable home care patients, according to a study released in September by The George Washington University Medical Center.  

The study, “An Examination of Medicare Home Health Services: A Descriptive Study of the Effects of the Balanced Budget Act Interim Payment System on Access to and Quality of Care,” looked at how care for Medicare beneficiaries receiving home health services has been impacted by cuts to the Medicare home care program under the Interim Payment System (IPS). 

Among other findings, the study concluded that: 

 * As many as half of the nonprofit agencies in the study must subsidize care for Medicare patients by using funds from their endowments or direct contributions, indicating that for many patients Medicare payments do not cover the actual cost of providing care. 

* Nearly all agencies in the study reported making significant reductions in clinical and administrative staff in an effort to contain costs under the Medicare cuts. Skilled nursing staff declined by 23 percent  since 1994, leaving fewer home care professionals to meet the needs of a growing elderly population. 

* Given these reduced payments and reduced capabilities to provide clinical care, home care agencies are being forced to closely analyze whether they can admit patients whose care will either be too costly or cannot be performed at the agency’s staffing levels. Diabetics, particularly complex diabetics, were the most affected by changes in admission practices that restricted or reduced levels of care in the study. 

* Chronically ill Medicare beneficiaries are those experiencing greater fragmentation and disruption of care. 

* The number of Medicare beneficiaries that the agencies in the study treated dropped 30 percent from 1996 to 1998, raising concerns both for access to care and its quality and effectiveness. 

* A further 15 percent reduction in Medicare payments to home care agencies that was scheduled to take effect October 1, 2000, would have further exacerbated these problems, putting beneficiaries’ health at even greater risk. 

“As the researchers noted, Medicare home care beneficiaries generally are sicker, older, and poorer than Medicare beneficiaries in general,” said Val J. Halamandaris, president of the National Association for Home Care (NAHC). “Yet the Interim Payment System is designed in such a way that it makes it financially impossible for agencies to provide an adequate level of care to those frail patients who need care the most.” 

Previous research cited in the GWU study has demonstrated the important role that home care has played in improving the overall health of homebound patients. A study by the Institute for Health Care Research and Policy at Georgetown University found that similar patients with greater use of home care services were more likely to experience health improvements than those with low home care utilization. Yet the current Medicare reimbursement system for home health has decreased the availability of home care services for the sickest patients. 

In addition to the study’s findings, August 1999 data from the Health Care Financing Administration reveal that close to 2,500 Medicare-certified home care agencies have closed since the Medicare cuts went into effect, and there are no signs that the rate of closures is slowing down. Those agencies that remain are being asked to care for a greater number of beneficiaries without adequate reimbursement. 

Further evidence outside of the GWU study shows even more clearly that agencies are being forced to subsidize the Medicare program. “A survey conducted by NAHC found that agencies, on average, have spent $423,576 from donations and other sources to subsidize the costs of caring for Medicare home health patients,” noted Halamandaris. “These are funds that otherwise would have been spent on home health services for indigent and other needy patients. Agencies simply cannot continue to subsidize the government and still be able to provide quality care to homebound elderly individuals in their communities.” 

The Office of Inspector General has issued the Compliance ProThe Office of Inspector General has issued the Compliance Program Guidance for Hospices. This can be accessed in the Federal Register, Vol. 64, No. 192, pages 54031-54049 (www.dhhs.gov/oig.)  

The guidance identifies specific compliance risk areas for Medicare hospice providers, such as admitting patients to hospice care who are not terminally ill; utilization of services; improper arrangements with nursing homes; high pressure marketing to ineligible beneficiaries; and incentives to referral sources that may violate the anti-kickback statute.  

The purpose of this guidance is to help hospice providers design effective voluntary compliance programs to prevent fraud, waste and abuse in government health programs. 

The Hospice Association of America notes that many of the industry’s suggestions to the OIG were included in this final document and that the OIG reported that “Medicare hospice programs seem to be working as intended.” 

Medicaid Fraud and Abuse Audit 
Alleges Home Care Problems 
 
A performance audit of Medicaid fraud and abuse programs was recently conducted by the Office of the Colorado State Auditor. The July 1999 report identified alleged fraud and abuse problems in home care but not to the extent of physician and other provider problems. The report said, “Given the explosive growth in home health expenditures, the Medicaid program’s post-payment review must be more aggressive.” The report went on to recommend that the Department extend oversight of home health agencies through increased post-payment reviews. The report has spurred the Dept. of Health Care Policy & Financing (HCPF) to hire a firm on a contingency basis to identify and recoup money lost to fraud and abuse. 

Following publication of the above report, HCPF officials announced at a recent meeting of the Board of Medical Services that 72 letters have been written to Colorado home care agencies asking for repayments of claims that were billed incorrectly or did not have documentation to support payment. Responding for the association, HCAC’s Executive Director Ellen Caruso noted that of the $1.5 million requested to be paid back, $1.3 million was from one single home care company. The remaining $200,000 is being sought from 71 agencies for an average of about $2,000 per agency. “That doesn’t sound like rampant fraud and abuse to me,” Caruso said. “Rather, it sounds like one bad apple.”  

HCAC urges home care agencies to appeal all pay back requests when it is believed to be a legitimate claim, to track the costs for the appeal, and to report these costs and result of the appeal to HCAC.  

Integrated Care Project 
In Mesa County is Scrapped! 
To be Re-Designed for Denver 
 
In September it was a go. In November is was scrapped. After years of haggling with the Health Care Financing Administration over approval of the program design, Colorado’s Dept. of Health Care Policy & Financing was starting to implement a project in Mesa County which would have integrated acute and long term care services as well as Medicaid and Medicare financing.   

According to Dann Milne, PhD, manager of Delivery Systems Development at HCPF, it was expected that by integrating primary, acute and long-term care services for those who have a broad range of care needs, client outcomes would be improved at no greater cost to Medicaid or Medicare. But then came word from Rocky Mountain HMO, a key player in the Mesa County project, that the HMO was no longer willing to participate in the project due to problems with their existing Medicaid contract. The Mesa County project was immediately suspended. 

However, the project will immediately be reinvented in the Denver Metro area in cooperation with local managed care companies and providers, according to Milne. HCAC will continue to be represented on the project’s Advisory Committee. 

President's Report 
by Margie Kreashko, RN 
 
Well, here we find ourselves amidst more chaos and change. Don’t you just love it? There are indeed many changes going on around us on a local and national level including Medicaid Program changes and increased managed care penetration. OASIS is finally here and the government is really sure this time that all the kinks, privacy act issues, collection and transmission issues are resolved. We sure hope so, don’t we? 

Actually, we have probably seen the worst of our industry’s woes...cost reductions, PBL, IPS, layoffs, loss of agencies, having to look hard to remember why we are doing this, etc. Over the last few months the survivors, as we should call ourselves, have begun to grow our agencies in different and creative ways. New agencies are going into the home care business (Imagine that!).  In turn, there are more agencies to invite to our table with more creative and entrepreneurial ideas on what our trade association and industry can do and how to grow stronger.  

HCAC, despite lacking a coastline, is indeed a leader among our state associations. Developing contracts with vendors who are willing to go an extra mile to win our members’ business is an innovative way we have looked at to increase our place in the future of home care. Performing surveys and analyzing the data, comparing it to prior years, deciphering pertinent facts, and extrapolating them into the future of home care is yet an additional tool to ensure our success.  

Our association, thanks to all of you, is strong and positioned to continue assisting our agencies to be on the leading edge, and sometimes even the precipice. In August, HCAC tried out a new teleconferencing format for education, appropriately, a Y2K educational seminar. We’re Coloradans, and pioneers in our field, and looking for ways to assist our members in the trail ride of success. Only these days, the trail ride is at light speed and we know where we are going!  

(Ed. Note: Margie Kreashko has resigned her position as president of HCAC due to leaving the home care field. President-Elect Dan Nicholson, Geriatric Services of America, Woodland Park and Caring Plus, Pueblo, has assumed the post.)  

Does it sometimes feel like the future of home care is in someone else’s hands?  

It’s no wonder if you do because much is being done about and to home care these days by people who don’t know enough about home care.  

An example is what has happened to the home care industry since the passage of the Balanced Budget Act of 1997. Well-meaning congressmen, trying to do the right thing and balance a budget that had not been balanced for many years, made some quick decisions with limited information and ended up denying home care services to the most vulnerable, frail and elderly patients in the country. 

Then along came the Health Care Financing Administration which imposed illogical surety bonds, unworkable advanced beneficiary notices and even more onerous reporting requirements. 

Did you notice that in each instance public officials acted with limited information? That’s where you come in. Providing this information can get home care back under YOUR control. But you will need to:  
1. Get to know your state and national legislators. If you don’t know who they are, call your county clerk and recorder’s office for their name and address. Look them up in your phone book and give them a call. Invite them to accompany you on a home visit; invite them to breakfast or lunch; tell them what you do; tell them how hard it is to provide enough home care to get people well these days; ask them about the issues that concern them. Tell them you will contact them again when they are back in session and ask them to call you if they have health care questions that you might be able to answer. 
2. Get active in grass roots politics. Next spring, be sure to attend your political party’s neighborhood precinct meeting; volunteer to represent your precinct at the county and state conventions; help put your favorite candidates on the primary ballot.  
3. Get active in next year’s campaigns. Check out the candidates; attend their community meetings; ask them questions about their position on health care; decide whom you want to support. Then actively work on that person’s campaign by handing out campaign literature in your neighborhood or volunteering to make phone calls.  
4. Write a check or two. If you know whom you want to get elected, support that candidate with a contribution.  

Those small steps will start to put home care back where it belongs. IN THE HANDS OF HOME CARE!