1- Testimony by Ellen Caruso, Executive Director 

2 - Testimony by Dan Nicholson, President, and Sue Brown, Member of the Board, Home Care Association of Colorado

TOPIC: Emergency Rules regarding home health reimbursement 

Mister Chairman, Members of the Board: 

The Home Care Association of Colorado represents 90 home care agencies throughout the state. In 1998, we provided about 6 million visits to more than 100,000 individuals and employed more than 10,000 nurses, therapists, certified nurse aides (home health aides) and personal care providers. 1/3 of our patients are between 60 and 80 years old; 1/3 are over the age of 80. In 1998, Medicaid beneficiaries made up 13% of our clientele. 

As we address the three rules that have been proposed by the department, we want to speak to the over-riding question of GROWTH IN THE MEDICAID HOME HEALTH PROGRAM. 

Is anyone in this room surprised that home health is the fastest growing segment of health care today? Is there anyone in this room, who if they had a choice, would choose any place besides HOME to be if you were to become ill, disabled, very old, or very frail? If possible, and you had a choice, would you choose any place besides HOME to get well, to receive physical therapy, to have a little assistance with your daily bath, or finally, to spend your last days? 

I think we all know the answer to my questions. It should not be any surprise that the Medicaid home health program is growing. The question really is, HAVE WE DEVELOPED PUBLIC POLICY IN THIS STATE THAT WILL ALLOW HOME CARE TO GROW AS MUCH AS IT SHOULD? 

No matter how often or passionately we talk about the reasons for home care growth, the reality is that the General Assembly passed a law during the 1999 session in an effort to slow the growth of home health. The law caps home health growth in 1999-2000 at 17.9 percent. The department agreed with that cap. On the surface, that cap sounds like a reasonable rate of growth. 

But another reality is: 
1. A financial cap on growth does not stop physicians from referring patients to the most appropriate and most often least expensive care setting which in many cases is – HOME HEALTH. 
2. A financial cap on growth does not stop people who are sick or disabled from REQUESTING and DESIRING HOME HEALTH. 
3. A financial cap on growth does not stop patients being discharged QUICKER AND SICKER from hospitals to finish their healing with HOME HEALTH. 
4. A financial cap on growth does not stop the medical needs of Colorado citizens who are getting older with more disabilities and qualify for Medicaid HOME HEALTH. 

The department knew about the 17.9% cap on home health growth in May of last year. But it was 8 months later, on January 6, 2000, that the department finally released the numbers that would be the basis of the growth cap and the projected budget over-expenditure. Four days later, the department developed the three options you have before you. 

I have with me today a delegation of industry experts – people who provide home care services every day to Colorado citizens. A number of them will speak to you from their experience and from their heart. First, I’d like to introduce our association president, Dan Nicholson, who will address the three proposed rules that are on the table today. 

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PRESENTATION TO 
STATE BOARD OF MEDICAL SERVICES 
by Dan Nicholson, President, and Sue Brown, Member of the Board 
Home Care Association of Colorado 
January 14, 2000 

TOPIC: Emergency Rules regarding home health reimbursement 

Mister Chairman, Members of the Board: 

Thank you for allowing me to speak on behalf of the Home Care Association of Colorado. We learned of the department’s three proposals on Monday. It has been a very quick turnaround for us to inform members, get some feedback and develop a position. We have many ideas on LONG TERM solutions; some of which have been presented to the department on numerous occasions. But today, we are here to talk about SHORT TERM solutions. 

Let me tell you some of our general concerns with the rules you have in front of you: 

1. We had a meeting yesterday with 7 providers and we have talked by phone with many others. Not one thinks they will be more than 17.9% growth over last year. We ask you where is the growth? Will we get credit for any pay backs that come back to the state as a result of the $1.5 million in recovery letters, ($1.3 million being from one agency?) Are the numbers and projections correct? 
2. We are concerned that home care is not the only provider to be "over budget" but we are the only provider with a cap on growth. In fact, we heard yesterday that Medicaid is $35 million over budget for FY 1999 due to overages in drugs, hospitals, etc. Why is home care the only provider to be "capped." 
3. We are concerned that the department has not  yet determined what other providers are over budget in year 2000, while home care is being told we will have to pay back any overages. 
4. We are concerned that home health agencies are going to take on a new role of the state’s gatekeepers of care. 
5. We are concerned that home health agencies are being asked to "solve the problem of growth" when the brightest health care analysts in the country have not yet been able to figure out how to stop growth in health care. (They thought they had the answer when they invented "managed care." ) 
6. Finally, and most importantly, we are concerned that there is no statewide health care policy that looks at the Continuum of Care, home care being just ONE of the stops along the way in the path to an assisted living center, to the hospital to a nursing home. 
But we are prepared today to give our opinion on the proposals as follows: 

OPTION 1 (10% home health rate reduction and lowering daily maximum reimbursement) 
We recommend a NO vote on Option 1. 

We ABSOLUTELY OPPOSE Option 1 for many reasons. 
1. A rate reduction will force us to lower salaries and will make it IMPOSSIBLE for home care to hire our necessary personnel. 
**There is already a SEVERE shortage of nurses and home aides. 
**Home care competes with nursing homes and other facilities for the SAME entry level personnel (home health aides and personal care providers). It IS easier to work in one place or to leave health care and work at Dillards. When rates are raised for other health care sectors, it is IMPERATIVE that home care receives the same % of increase NOT RATE REDUCTIONS in order to compete in the tight employment market place. 
**We can’t do visits without staff. Agencies are already turning away clients due to staffing shortages. 

2. Home care rates are not yet at levels "targeted" by the dept. several years ago… 

3. Home care did not receive COL rate increases for many years when the BOREN Amendment mandated automatic increases for nursing homes and hospitals. The Joint Budget Committee has recognized home care as a community provider these past several years and we have received COL adjustments. 

4. NO COL increase has been recommended for home care in 2000-2001. We are fighting hard to get the same COL as other community providers. 

5. As is true for other providers, Medicaid reimburses far below Medicare rates for home care services. For example, depending on an agency’s cost, an agency in Denver could be paid $100.81 for a Medicare skilled nursing visit while being paid $69.32 by Medicaid for a similar visit. A home health aide visit could be reimbursed at $46.43 by Medicare but only $38.43 by Medicaid. 

 OPTIONS 2 & 3 
We support Option 3. 

We had long discussions on whether Options 2 and 3 were feasible and about the impact of these proposals on our patients and home health agencies. We have determined: 
1.  Agencies will need agency specific numbers in order to succeed under either option. The "unduplicated client" count is vital. The department has told us they won’t have data to us until after March 1. That gives agencies less than 4 months to make changes in their practice patterns to meet an agency specific cap by June 30th or pay back money to the state. 

2. Agencies will need clear definitions (what is a new agency? One that is purchased? Closed? Merged?) immediately. 

3. Even if an agency starts planning tomorrow, they will have only 5 short months to change their operations. This is not time enough. 

4. And VERY IMPORTANT, in order to meet their cap, agencies may be forced to discharge or cut services to their most ill and disabled, heavy user clients (quads, chronically ill). 

At the end of the day, we decided OPTION 3 is the lesser of evils. We support this option with the following amendments: 

1. Because of the short time frame for planning and adjusting business operations, agencies should be required to pay back only $2.7 million of the projected $5.9 million overage. (This is the department’s estimated savings in Option 1. As the department counted on in Option 1, previously passed rules will be allowed to kick in and make up for the rest.) 

2. The department should be required to provide accurate agency specific numbers to agencies no later than February 1, 2000 and provide definitions and formulas to agencies no later than January 21, 2000. The success of Option 3 depends on this. 
 
3.  The department should cooperate with the home care association to train home health agencies on the new rule during the months of January and February, 2000. 

4.  The department should be part of the team along with the Medical Services Board in discussing its decisions on home health with the Joint Budget Committee. 

5. The department should report to this board every month on the progress of this regulation. 

Thank you for your kind consideration of our recommendations.