On. Nov. 22, the Centers for Medicare and Medicaid Services (CMS) announced that, effective Jan. 1, 2014, it will cut reimbursement for the home health benefit by 14 percent over the next three years.
This cut was forced down the throats of Americans by the White House to make sure all extra costs associated with the Affordable Care Act – Obamacare – could be funded. This was done in the face of strong objection by a bipartisan coalition of 51 U.S. senators and 142 members of the U.S. House of Representatives who all signed letters objecting to the cuts. Others in Congress joined in the fight after the official letters were sent.
These cuts do several things. First and foremost, they affect access to care for more than 4 million seniors who are homebound and who CMS admits are older, sicker, poorer and more likely to be minorities than the general Medicare population. CMS argues that access to care won’t be affected because home health providers will adjust to the rate reductions and continue as usual. But even CMS admits that 40 percent of home health providers will be losing money by 2017.
MANY SMALL HOME health agencies will, in fact, just hang in there as long as they can. They will be forced in many instances to provide less-effective, if not poor, service. They will not be able to provide employees with full benefits, workers’ compensation coverage or continuing education. They will need to recertify patients for home health continually, even when the need is marginal.
As a result, the quality of care and outcomes will go down, and patients will be driven back into high cost settings – i.e., hospitals and skilled nursing facilities. This is not a slam on smaller providers. They are just trying to survive. Many of them are operated by good people who have spent their lives building these small businesses. Many other small providers simply will not be able to stay in business because of economic constraints associated with the draconian rate cuts resulting in loss of jobs and loss of access to care, especially in rural areas.
The larger home health providers invest heavily in advanced care technology and continuing clinical education, for which CMS reimburses them nothing. The larger home health providers provide employees with competitive wages and full benefits. They provide workers’ compensation protection. They constantly are monitoring quality and looking at rehospitalization rates to ensure their hospitals and other provider partners are not being financially dinged by the CMS system. Now, on top of the rate cuts imposed through the White House, these employers of hundreds of thousands of employees must comply with the ACA, which costs them millions to their bottom lines.
AS A RESULT, the larger home health providers that in the past absorbed a great deal of unprofitable home health business will now simply shut that down. These larger providers will have to cut. They will have to eliminate marginally profitable or unprofitable locations. They will have to say: We cannot take care of that patient with a severe wound, or one who lives miles away in a rural area. They will have to provide less service to patients. They will have to reduce their work forces, thereby causing people to lose jobs.
The CEOs of two very large home health companies recently have indicated future actions to me. One company intends to close 57 more locations in January. One indicated he likely will close 50 more offices. These organizations have closed almost 100 locations between them. And these are just two examples of large organizations shrinking. Our organization – which is not as large as these, but nevertheless considered a large provider – also will be forced to reduce the number of locations we serve and the types of patients we serve.
While large players likely will hang around, but will adjust their operations, contrary to what CMS and the White House administration would have you believe, access to quality and timely home health care will be greatly affected negatively. Costs to Medicare are going to increase, and seniors are going to be denied needed health-care services – all in the name of ensuring that Obamacare survives intact at any costs.
(The writer is president and chief executive officer of CareSouth Health System in Augusta.)