Medicaid Squeeze Puts a Spotlight on the Advantages of Homecare in the USA

Main Category: Caregivers / Homecare
Article Date: 13 Jan 2005 - 10:00 PDT

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Medicaid Squeeze Puts a Spotlight on the Advantages of Homecare in the USA
Homecare will be a factor in efforts by states across the USA to cut or alter Medicaid services. Rising healthcare costs and continuing budget problems have fueled interest in revising state Medicaid programs. Medicaid spending is growing rapidly, consuming one in four budget dollars in many states.

In New York, Medicaid spending has risen 46 percent in the past five years and now accounts for 44 percent of the state budget.

Last month, outgoing New Hampshire Governor Craig Benson announced a program called HomeCare Works, which would train welfare recipients to become healthcare workers and provide homecare. The program follows a 1998 effort in New Hampshire to expand homecare to take pressure off county nursing homes. Wisconsin Governor James Doyle is also looking into efforts to increase use of homecare as an alternative to nursing homes.

TennCare, Tennessee's Medicaid program, announced earlier this week that it would reduce enrollment by more than 300,000 people. The plan is focused on limits to physician visits, hospital stays, outpatient services and pharmacy prescriptions to help rescue the program. Gayla Sasser, executive director of the Tennessee Association for Home Care, said "No announcements have been made that would alter Governor Phil Bredesen's emphasis on home and community-based programs as a cost-effective service for both short and long-term care."

Efforts to take greater advantage of the cost-effectiveness of homecare echo recent Bush administration efforts to better balance institutional care with home and community-based care. The President proposed legislation in his 2005 budget that would temporarily allow states more flexibility in their Medicaid payment systems without having to seek waivers from CMS. Last year, the Department of Health and Human Services called on the states to "rebalance" home-based and institutional care. Meanwhile, governors are warning federal policymakers not to shift more of the burden of Medicaid from the federal budget to the states.

Cost-saving measures may hurt homecare in some states. Facing a huge budget shortfall, California Governor Arnold Schwarzenegger has called for rolling back state funds for home health workers in the state's in-home supportive services from $10.10 to $6.75 an hour, the minimum wage.

"Homecare delivers quality and value for the older Americans who need this care," stated Kay Cox, President and CEO of the American Association for Homecare. "It's a good solution for both Medicaid and Medicare and the beneficiaries they serve."

Oxygen News Expected in the Coming Week

AAHomecare has been closely following the home oxygen pricing issue and reimbursement hold and expects news in the coming week. In December, the Centers for Medicare and Medicaid Services (CMS) said it would hold home oxygen claims with dates of service January 1 and after until it calculates the 2005 fee schedule, using more data from the HHS Office of Inspector General (OIG). That data is expected at CMS by January 15. CMS said it will alert the homecare community if any delays in oxygen reimbursements are expected.

The Medicare Modernization Act of 2003 requires that CMS cut reimbursement effective January 1, 2005, for several home medical equipment items, including home oxygen and equipment. CMS will base payment on the percentage difference between median 2002 Federal Employees Health Benefits Program (FEHBP) amounts and Medicare amounts, to be calculated in a report by OIG. Last year, AAHomecare collected information about the costs of providing home oxygen to Medicare beneficiaries, which has shared with OIG and CMS.

For information on homecare, see AAHomecare's website for details: http://www.aahomecare.org or call Michael Reinemer, 703-535-1881.

Michael Reinemer
Vice President
American Association for Homecare
625 Slaters Lane
Alexandria, VA 22314
703-535-1881
email: michaelr@aahomecare.org
http://www.aahomecare.org

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