Home Care Issues

Here are the top issues at the state and federal levels for Ohio home care agencies:

State

Protect Reimbursement Rates: A 2007 study found that Ohio ranked 49^th of 50 states when it came to the balance in spending between home and community-based and institutional-based long term healthcare. The annual cost of home care falls between one half and one third of the cost of care in a nursing facility. Ohio home health agencies have endured 11 of the past 12 years without a reimbursement increase. While the 2009-2011 biennial budget is sure to be a tight one, home health agencies cannot and should not absorb any rate reductions. 

Federal

Home Health Market Basket Update: Home health agencies were dealt a blow in the President's budget, to cap off an already disastrous year of cuts resulting from the ‘case-mix creep' adjustments included in a revised payment system (see below). The budget proposes a freeze to home health rates. A recent study showed that in 2003, Ohio spent $12,000 annually per beneficiary on home care while institution-based care cost $56,000 per year; home care saves $28,000 per long-term care beneficiary by keeping that person in the preferred home setting. Yet, rates continue to be cut, inhibiting the growth and development of a hardy home- and community- based provider network. Taken in combination with the case mix creep adjustments, this means a reduction of $13 billion to home health expenditures over the next 5 years, and will put more than a third of Ohio home health agencies into negative margins by 2011. Click here for the OHPCAN Talking Points on Rates. 

‘Case Mix Creep': As part of the revised home health prospective payment system (HHPPS), reimbursement rates were adjusted downward to offset a perceived ‘case mix creep,' or, the rising acuity of home health payments over time resulting from providers ‘upcoding,'. This cut would total an 11.75% cut over four years, but in 2009, MedPAC recommended to accelerate its implementation by forcing home health agencies to absorb two years' cuts (5.46 %) in FY 2010. In fact, actual Medicare expenditure under the home health benefit has risen at a far slower rate than projected by the Congressional Budget Office in 2000, totaling $14.2 billion, rather than the projected $23.3 billion. The adjustment ignores actual changes in patient acuity in recent years, especially the increase of orthopedic and neurologically impaired patients requiring restorative therapy. Taken in combination with the market basket freeze, this means a reduction of $13 billion to home health expenditures over the next 5 years, and will put more than a third of Ohio home health agencies into negative margins by 2011. Click here for the OHPCAN Talking Points on 'Case Mix Creep'. 

Rural Home Health:  Since the loss of the 5 percent rural add-on, home health services in rural areas have constricted, and anecdotal reports indicate that some agencies must turn away high-acuity, high-cost patients in order to stay financially afloat. For some rural areas, home health agencies are the primary caregivers for homebound beneficiaries. With gasoline prices rising, this trend will only continue unless curbed by Congressional intervention. Click here for the OHPCAN Talking Points on Rural Home Health.