Chipping Away at Home Care Funding Hurts Everyone

Home care can help relieve some of the rising costs of health care. However, the approach that has been used in recent years is not the proper solution.

Proposed Rule Impacts Home Health Services

The Centers for Medicare and Medicaid Services (CMS) recently issued a proposed rule that would trigger a 14 percent reduction in payment rates for vital home health services. This huge cut comes on top of the 14 percent rate cuts to Liberty HomeCare & Hospice since 2008. Indeed, this would leave providers across the county with an average margin of -9.77 percent by 2017. The overreaching proposed rate cuts will result in payments far below the cost of services, thereby jeopardizing care to homebound elderly and disabled Medicare beneficiaries.

The National Association of Home Care and Hospice has identified that under the CMS proposal, in the first year alone nearly 50 percent of home health agencies will be paid less than the costs of care. By 2017, over 70 percent of providers will be paid less than cost.

Cutting reimbursements can have dramatic and dangerous effects for patients. It will affect the care they receive and even determine whether or not they receive home care at all. To compound the reductions to home health agencies, there is also a recommendation that the care will also increase the cost to home care patients. President Obama has recommended that the cost of home care be passed on to the patient, beginning with a $100 co-pay in 2017.

Reduction for Home Care Funding Harms Patients

That could greatly affect patient care. A study in the New England Journal of Medicine found that seniors who faced higher copays for office visits had fewer office visits but more, and longer, hospitalizations. This strategy makes no sense, especially when home care itself can both benefit patients and reduce the rising costs of health care.

Over the past several years, there have been significant regulatory increases in costs to home health agencies. Instead of cutting reimbursements and implementing co-pays, Medicare should encourage more patients to receive home care. Home care helps patients heal faster, in the environment they prefer, and is also a proven way to reduce costly hospital readmissions.

Six straight years of cuts exemplifies the continuing of a misguided policy that is not serving the best interests of patients. They deserve better.