As the Accredited team prepares for their march to Washington D.C., take the time to find out what we’re lobbying for. Know the issues and our stance on it.
California Association for Health Services at Home
2012 FEDERAL LEGISLATIVE PRIORITIES
- OPPOSE CHANGES TO THE COMPANIONSHIP SERVICES EXEMPTION TO THE FAIR LABOR STANDARDS ACT.
- Protect companionship services exemption under wage and hour laws: Congress should maintain the companionship services exemption at the state and federal level until a comprehensive plan can be implemented that addresses service funding, worker health insurance, and career development. Congress should block any attempt by the Department of Labor to modify the existing and longstanding definition and application of the companionship services exemption, and support legislative efforts to maintain the current companionship services exemption.
2. ENSURE APPROPRIATE AND ADEQUATE REIMBURSEMENT FOR AND ACCESS TO
MEDICARE HOME HEALTH SERVICES
- Oppose a “sick tax”— block efforts to impose a fee paid by patients to access Medicare home health: Congress should oppose any copay or deductible proposal for Medicare home health services and should prohibit Medicare Advantage plans from charging a home health copay or deductible. The imposition of a home health copay or deductible would be a “sick tax” on some of the oldest, poorest, sickest Medicare beneficiaries, restricting access to home health services and leading to an increase in costly hospitalizations and nursing home stays.
- Ensure Full Market Basket Updates to Medicare Home Health. Congress should reject any proposals to reduce the market basket inflation update or impose additional rate reductions for home health agencies. Congress should maintain its carefully crafted schedule of payment rate changes as contained in PPACA in order to secure access to continued care.
3. PROTECT ACCESS AND ENSURE ADEQUATE REIMBURSEMENT FOR HOSPICE BENEFIT
- Ensure the Full Market Basket Update for Medicare Hospice Benefit: Congress should restore the market basket update, rescind productivity reductions authorized under P.L. 111-148, and reject any further proposals to cut the hospice market basket update. A study of the need for refinements in the Medicare hospice benefit as recommended by the Government Accountability Office and MedPAC should be conducted before any cuts in reimbursement are undertaken. Also, Congress should oppose any reductions in the annual updates until such time as all payment reforms are instituted and then only after the issues are fully examined.
4. PROTECT AND EXPAND ACCESS TO HOME AND COMMUNITY-BASED SERVICES UNDER
- Establish Medicaid Home Care as a Mandatory Benefit and Support Rebalancing of Long Term Care Expenditures in State Medicaid Programs in Favor of Home Care: Congress should ensure that CMS properly implements the Medicaid home care expansion in PPACA and encourage broader coverage of home and community-based services under Medicaid. Congress should establish firm deadlines for Olmstead/ADA compliance with the penalty of lost federal financial matching payments for failure to meet the deadlines. Further, Congress should authorize an increase in the federal matching payment for expanded Olmstead/ADA-compliant home and community-based services, and 100 percent federal reimbursement for state Medicaid compliance costs in transitioning to improve home care alternatives. Congress should monitor carefully any shift of Medicaid beneficiaries into managed care and ensure that the patients’ rights to home care under the ADA and the Olmstead decision are fully secured.
OPPOSE CHANGES TO THE COMPANIONSHIP SERVICES EXEMPTION TO THE FAIR LABOR STANDARDS ACT
Background: In 1974, Congress established an exemption for companionship services from the Minimum Wage and Overtime Requirements of the Fair Labor Standards Act. Congress made a societal choice in balancing the interests of the worker relative to the needs for care to the elderly and the infirm. Current law provides the Secretary of the U.S. Department of Labor (DOL) the authority to define and determine the scope of the companionship exemption.
In June 2007, the US Supreme Court ruled that the DOL companionship services exemption regulation was valid thereby reversing the Court of Appeals in a final decision. Since the Supreme Court ruling, there has been a re-focusing of efforts by some opposed to the DOL rule. Currently, they are attempting to get Congress to change the law while also seeking legislative and/or regulatory remedies at the state level. Legislative efforts in the 110th, 111th and 112th Congresses intended to eliminate the current companionship services exemption for home care aide workers is opposed by the California Association for Health Services at Home (CAHSAH) and the National Association for Home Care & Hospice (NAHC) because they do not go far enough to protect workers.
Some states already have passed laws that eliminated the companionship services exemption. In others, there are efforts to interpret the regulations in a manner different than the federal rules. Advocates for changing the exemption have expanded their efforts with the Obama administration to encourage DOL to change the regulation. These efforts include enlisting the aid of 15 Senators to send a letter to the Secretary of Labor requesting that the exemption be modified through regulation to exclude home care aides employed by agencies or family of the client. DOL issued a proposed rule on December 27, 2011 that would significantly restrict the exemption and make it inapplicable to workers employed by home care companies.
In the absence of a mandate that government payment programs increase payment rates to cover the added cost of wages that would result from these efforts, home care aide employers are expected to restrict working hours to avoid overtime pay. Further, these efforts do nothing to create career opportunities for home care aides or to address their need for health insurance. This isolated action related to a single element of the home care aide working conditions will have a reverse negative impact on those workers.
Legislation has been introduced in the 112th Congress that is intended to codify the current definition of companionship services. CAHSAH and NAHC are supportive of the “Companionship Exemption Protection Act” (H.R.3066) because it creates certainty for home care providers and patients rather than leaving the definition open to changes through the regulatory process.
Recommendation: A companionship services exemption under wage and hour laws should be maintained at the state and federal level until a comprehensive plan can be implemented that addresses service funding, worker health insurance, and career development. Congress should block any attempt by the Department of Labor to modify the existing and longstanding definition and application of the companionship services exemption, and support legislative efforts which maintain the current companionship services exemption.
Rationale: Most home care providers are small businesses with limited resources. The proposed regulatory changes to the companionship exemption would reduce availability of care to the elderly and the infirm and increase the costs of service delivery with no corresponding increase from third party payers, such as Medicaid. A comprehensive rather than a piecemeal approach to worker compensation and working conditions is necessary if access to high quality of care and continuity of services is to be achieved.
ENSURE THE FULL MARKET BASKET UPDATE FOR HOME HEALTH PAYMENTS
Background: The Medicare home health benefit has undergone a series of cuts since legislation was enacted to move it toward a prospective payment system (PPS). Through a combination of legislated and regulatory cuts since 2000, payment rates are over 14 percent less than they would have been otherwise.
Under the fiscal year (FY) 1999 omnibus appropriations legislation, the Medicare home health market basket index – used to adjust payments for inflation – was reduced 1.1 percentage points from the projected 3 percent update in each of (FY) 2000-2003. During 2000, Congress restored the full market basket update for FY 2001. In October 2002, a major cut to home health payments of more than 7 percent that was enacted as part of the Balanced Budget Act of 1997 (BBA) was allowed to go forward.
As part of H.R.1, The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Congress enacted reductions of 0.8 percent off the market basket update from April 2004 through December 31, 2006. In early 2006, Congress approved legislation (S. 1932) that eliminated a scheduled 2.8 percent market basket inflation update for 2006.
In 2007 and 2008, the Bush Administration proposed deep cuts to the home health program as part of its budget, including recommendations that home health rates be frozen for five consecutive years. During 2007, Medicare enacted regulatory cuts of 2.75 percent in each of 2008, 2009, and 2010. In 2011 and 2012, additional regulatory cuts of 3.79% were imposed.
Congress’ legislative action to reduce market basket inflation updates in recent years was taken, in large part, as the result of recommendations by the Medicare Payment Advisory Commission (MedPAC). During 2003 MedPAC recommended that Congress freeze home health payment rates at the FY 2003 level for FY 2004. MedPAC renewed its market basket freeze recommendation for 2005, 2006, 2007, and 2008.
In March 2009, MedPAC recommended elimination of the home health market basket update for 2010. MedPAC also recommended advancing a scheduled regulatory “case-mix creep” cut from 2011 to 2010. The combined impact of the MedPAC proposals, on top of an already-scheduled 2010 case mix cut, would result in payment rates during 2010 that are a full 5.5 percent below payments being made in 2009.
In March 2010, MedPAC again recommended elimination of the home health market basket update for 2011, as well as rebasing of rates to “reflect the average cost of providing care.” Additionally, MedPAC suggested that Congress direct the Secretary of Health and Human Services (the Secretary) to modify the home health payment system (through possible use of risk corridors and blended payments) to protect beneficiaries from “stinging or lower quality of care” in response to rebasing. MedPAC also recommended that the Secretary identify categories of patients likely to receive greatest clinical benefit from home health and develop quality outcome measures for each category of patient. Finally, MedPAC recommended that Congress direct the Secretary to review agencies that exhibit unusual patterns or claims for payment and provide authority to the Secretary to implement safeguards (including a moratorium, preauthorization requirements or suspension of prompt payment requirements) to address high risk areas.
MedPAC’s recommendations are predicated on findings of “excessive” Medicare profit margins for freestanding agencies. More comprehensive study of agency margins performed by the National Association for Home Care & Hospice has found significantly lower Medicare profit margins that virtually disappear when all payers are taken into account. Further, when agency profit margins are considered on an individual basis, they reflect dramatic ranges.
In recent years, MedPAC has also expressed interest in imposition of a “productivity adjustment” which would reduce payments to Medicare providers to reflect gains in productivity.
To help finance a portion of health reform legislation, Congress set a reduction in the Market Basket Index of 1 point in 2011, 2012, and 2013. In addition, PPACA institutes rebasing of payment rates in 2014 with a 4-year phase-in approach and rate reductions capped annually during the phase-in at 3.5%. A productivity adjustment reduction to the Market Basket Index begins annually in 2015 at an estimated 1 point reduction per year.
The 2011 MedPAC recommendations include a zero Market Basket Index update in 2012, accelerating the rebasing to 2012 with no more than a 2-year phase-in, and applying the productivity adjustment starting in 2012. MedPAC also recommends a new case mix adjustment model and the use of some form of limits on provider profits. Finally, MedPAC suggests imposing cost-sharing on Medicare beneficiaries use of home health services.
Recommendation: Congress should reject any proposals to reduce the market basket inflation update or impose additional rate reductions for home health agencies. Congress should maintain its carefully crafted schedule of payment rate changes as contained in PPACA in order to secure access to continued care.
Rationale: Since legislative changes instituted in 1997 and subsequent imposition of a PPS for home health, reimbursement levels have failed to adequately cover the rising costs of providing care, including increased labor costs for home health agencies. Thousands of home health agencies closed following implementation of the 1997 Balanced Budget Act (BBA). In calendar year 2000, one million fewer beneficiaries received home health services than in calendar year (CY) 1997 and, in the first year of PPS (CY 2001), an additional 300,000 fewer beneficiaries received home health services than in CY 2000. In CY 2001, 5.5 percent of Medicare beneficiaries received home health services, compared to 6.5 percent in 1991. Recent study by MedPAC and CMS indicate that a major problem with the PPS is that the case mix adjustor in most cases does not accurately predict the costs of providing care.
Under PPS refinement regulations promulgated during 2007-2010, CMS included four years of reductions to the home health base payment rate – 2.75 percent in each of 2008, 2009, and 2010, and 3.79 percent in 2011 and 2012, for a total of over $20 billion in cuts over a ten year period. These cuts could well send the home health network into severe financial difficulties similar to those experienced after passage of the BBA. This would ill serve beneficiaries, agencies, and the Medicare program.
It is estimated that with the MedPAC proposals, well in excess of 50% of all home health agencies will be paid less than the cost of care in 2012 and there are no revenue sources to offset these losses. That means that access to care will be lost to a significant number of Medicare beneficiaries. A similar arbitrary rate-cutting effort in 1998 led to the loss of care to nearly 1.5 million home health patients, forced the closure of over 4000 home health agencies, and increased overall Medicare spending because of the expanded use of more expensive care.
Crude measures such as across-the-board reductions or freezes will only exacerbate inequities in the system, and contribute further to access concerns. Access to care continues to be a serious problem in home health, and it is anticipated that these concerns will only increase with further cuts to home health payments. Home health care is efficient and effective in providing vital services to patients in the comfort of their homes. Use and provision of these services should be encouraged, not discouraged.
ENSURE THE FULL MARKET BASKET UPDATE FOR THE
MEDICARE HOSPICE BENEFIT
Background: The Patient Protection and Affordable Care Act (PPACA) requires the development of Medicare hospice payment system reforms along the lines recommended by the Medicare Payment Advisory Commission (MedPAC) in 2009 and again in 2010 (Section 3132(a)). Under the new law (P.L. 111-148) the effective date for collection of data is January 1, 2011, with system reforms in operation no earlier than October 1, 2013. P.L. 111-148 also includes interim hospice payment changes, including the institution of a productivity adjustment to the annual market basket inflation update beginning in FY2013. In addition, the final reform bill reduces the market basket index by 0.3 points for FY2013 through 2019, but conditions the 0.3 point market basket reductions in each of FY2014 – 2019 on growth in the health insurance-covered population exceeding 5 percent in the previous year. In 2011, MedPAC recommended to Congress that the hospice market basket update be limited to 1 percent for FY2012; this recommendation was not approved by Congress. It is expected that early in 2012 MedPAC will recommend that the FY2013 market basket update for hospice be limited to 0.5 percent.
Recommendation: Congress should restore the market basket update, rescind the productivity reductions authorized under P.L. 111-148, and reject any further proposals to cut the hospice market basket update. A study of the need for refinements in the Medicare hospice benefit as recommended by the Government Accountability Office (GAO) and MedPAC should be conducted before any cuts in reimbursement are undertaken. Also, Congress should oppose any reductions in the annual updates until all payment reforms are instituted and then only after the issues are fully examined.
• In FY2010, the Centers for Medicare and Medicaid Services (CMS) began phasing out by regulatory issuance the Budget Neutrality Adjustment Factor (BNAF) to the hospice wage index over seven years. In each year the phase out reduces scheduled annual increases by 0.6 percent. It is estimated that the phase-out, when completed, will reduce hospice payments by 4 percent.
• MedPAC has projected that Medicare hospice financial margins for 2012 (without consideration of costs related to volunteer and bereavement services) will average about 5 percent; however, financial margins vary widely in the hospice sector, and many hospices are operating at serious financial risk. Additionally, there is some concern that MedPAC’s estimates may not take into full account costs associated with the face-to-face encounter requirements that went into effect Jan. 1, 2011.
• A Duke University study showed that patients who died under the care of hospice cost the Medicare program an average of about $2,300 less compared with those who did not. In its June 2004 report on the Medicare hospice benefit, the GAO determined that 34 percent of hospices in 2000 and 32 percent in 2001 had higher costs than reimbursements. A cut in the market basket update would impair the ability of hospices to maintain Medicare beneficiary access to care.
• The GAO recommended that CMS should collect comprehensive, patient-specific data on the utilization and cost of hospice visits and services to determine whether the hospice payment categories and methodology require modification. It did not recommend an across-the-board cut in hospice payments. CMS is in the process of collecting such data for analysis.
• At its November 2008 and subsequent meetings, MedPAC discussed potential recommended revisions to the Medicare hospice benefit reimbursement system. There is concern about the costs of short stay patients not being fully covered under the current reimbursement system. Financial margins for hospices with shorter stay patients are generally significantly lower than those of hospices serving long-stay patients. Paying accurately for all types of patients is important to ensure access to services for all Medicare beneficiaries who want to elect hospice care and to ensure that the program is paying rates that cover providers’ costs for all types of patients.
OPPOSE A “SICK TAX”— BLOCK EFFORTS TO IMPOSE A FEE PAID BY PATIENTS
TO ACCESS MEDICARE HOME HEALTH SERVICES
Background: Copayments for Medicare home health services have been advanced in Congress as a means of deficit reduction as well as a means of limiting the growth of Medicare home health expenditures. Some Medicare Advantage (MA) plans have imposed home health copays. Copays are regressive, inefficient and fall most heavily on the poorest and oldest Medicare beneficiaries.
The National Commission on Fiscal Responsibility and Reform (2010) recommended a uniform 20 percent copay and a uniform overall deductible of $550 for all Medicare services combined, including home health care. In January 2011 the Medicare Payment Advisory Commission (MedPAC) voted to recommend a home health copay (as much as $150 per episode) for episodes not preceded by a hospital or nursing home stay as a means to encourage beneficiaries to control utilization of care.
Recommendation: Congress should oppose any copay or deductible proposal for Medicare home health services and should prohibit Medicare Advantage plans from charging a home health copay or deductible.
Rationale: Home health cost sharing would create a significant barrier for those in need of home care and lead to increased use of more costly institutional care.
• Congress modernized the home health benefit by eliminating copays in 1972 and a home health care deductible in 1980 to encourage use of less costly, non-institutional services. The Urban Institute’s Health Policy Center concluded that copays “…would fall on the home health users with the highest Medicare expenses and the worst health status, who appear to be using home health in lieu of more expensive nursing facility stays.” (“A Preliminary Examination of Key Differences in the Medicare Savings Bills,” 7/13/97.)
• A study published in the New England Journal of Medicine (“Increased Ambulatory Care Copayments and Hospitalizations among the Elderly,” January 2010) found that increasing copays on ambulatory care decreased outpatient visits, leading to increased acute care and hospitalizations. It concluded that raising cost sharing for ambulatory care among elderly patients may have adverse health consequences and increase total spending on health care. The same adverse health consequences and more costly acute care and hospitalizations would likely result from the imposition of a home health copay.
Copayments are an inefficient and regressive “sick tax” that would fall most heavily on the oldest, sickest, and poorest Medicare beneficiaries.
• About 86 percent of home health users are age 65 or older – 70 percent age 75 or older. More than 60 percent of all users are women. Home health users are poorer on average than the Medicare population as a whole. About 43% of home health users have limitations in one or more activities of daily living, compared with 9% of beneficiaries in general. (AARP, “Home Health Copayment Would Have Negative Consequences for Medicare Beneficiaries,” 8/7/98.)
• The Commonwealth Fund cautioned lawmakers that cost-sharing proposals, such as a copayment on Medicare home health services, could leave vulnerable beneficiaries at risk and place an inordinate burden on those who already face very high out-of-pocket costs. (“One-Third At Risk: The Special Circumstances of Medicare Beneficiaries with Health Problems,” 9/01).
• Even if Medicaid recipients with low incomes were exempted from the home health copay, a large percentage of low income beneficiaries would be ineligible for protection from the home health copay because of the restrictive asset limitation, which has not been adjusted since 1989 and serves as a major barrier. (The Commonwealth Fund, “The Role of the Asset Test in Targeting Benefits for Medicare Savings Programs,” October 2002.)
Home care patients and their families already contribute to the cost of their home care.
• According to the AARP Public Policy Institute (“Medicare Beneficiaries’ Out-of- Pocket Spending for Health Care Services, June 2009”), Medicare beneficiaries spent an average of $4,394, or 37 percent of the individual beneficiary’s income, on health care costs. The oldest and poorest beneficiaries spent more than half their incomes on health care services.
• Patients going on service for home health must pay a 20 percent copay and the Part B deductible to retain the services of a physician who can order the home health plan of care and provide care plan oversight. They must pay a copay for home medical equipment. Many home health patients will also incur the hospital deductible and copays and the skilled nursing facility copays before becoming eligible for the home health benefit.
• With hospital and nursing home care, Medicare pays for room and board, as well as for extensive custodial services. At home, these services are provided by family members or paid out of pocket by patients without family support. Family members are frequently trained to render semi-skilled support services for home care patients, which Medicare would have to pay for in the hospital or nursing home setting.
Copayments as a means of reducing utilization would be particularly inappropriate for home health care.
• Since 1997, the average number of home health visits provided over a 60-day episode under Medicare has dropped from 36 to 18. Spending on a per patient basis is no greater today than in 1997. Adjusted for inflation, Medicare spends billions less on home health care today than in 1997 and serves fewer Medicare beneficiaries. The home health benefit has dropped from 8.7 percent of the Medicare program to 3.7 percent, and CMS projects that it will drop to 3.5 percent by 2020.
Imposition of home health copayments should not be used for deficit reduction or to pay for other initiatives.
• The Balanced Budget Act of 1997 intended to reduce projected spending on home health services by $16 billion over five years. Instead, home health outlays were reduced by more than $74 billion over the same time period and Medicare spending on skilled nursing facility care increased dramatically.
• Since 1997, Medicare spending on home health care has consistently been billions below CBO projections.
Medicare supplemental coverage would not necessarily cover home health copays and would be too costly for most home care recipients.
• Although 17 percent of Medicare beneficiaries purchase Medigap coverage and 34 percent have coverage from an employer sponsored plan, there is no assurance that these plans will cover a home health copay. (Kaiser Family Foundation, 2009) The law governing Medigap policies does not require that all models cover copays. Likewise, the 22 percent enrolled in Medicare Advantage (MA) plans would not be protected from a home health copay, as many MA plans have imposed home health copays even in the absence of a copay requirement under traditional Medicare.
Copayments would impose an unfunded mandate on the states.
• About 15 percent of Medicare beneficiaries receive Medicaid. Studies have shown that an even larger proportion (estimated to be about 30 percent by MedPAC) of Medicare home health beneficiaries—who are some of the oldest, sickest, and poorest beneficiaries—are eligible for Medicaid. (e.g. Mauser and Miller, “A Profile of Home Care Users in 1992,” Health Care Financing Review, Vol. 160, Fall 1994, p. 20.) A home health copayment would shift significant costs to states that are struggling to pay for their existing Medicaid programs.
• Even if Medicaid recipients with low incomes were exempted, a home health copay would cause more Medicare recipients to “spend down” to become eligible for Medicaid under the “medically needy” program.
Copayments would be another federal administrative burden on providers and would increase Medicare costs.
• Home health agencies would need to develop new accounting and billing procedures, create new software packages, and hire staff to send bills, post accounts receivable, and re-bill. Also, unlike hospitals, there is no provision for bad debt from uncollected copays currently built into the base payment for home health care.
• Nurses and home care aides might be placed in the position of having to collect copays, a task for which they are unsuited. They would have to carry large sums of money, increasing their exposure to robbery and muggings. Collecting copays in a person’s home is not like a hospital or physician’s office where clerical staff can handle billing and collection.
ESTABLISH MEDICAID HOME CARE AS A MANDATORY BENEFIT AND SUPPORT REBALANCING OF LONG TERM CARE EXPENDITURES IN STATE MEDICAID PROGRAMS IN FAVOR OF HOME CARE
Background: In 1999, the United States Supreme Court held, in Olmstead v. L.C., that state Medicaid programs were required under the Americans with Disabilities Act (ADA) to undertake steps to support access to community-based health care options as an alternative to institutional care. Subsequently, the Bush Administration established its New Freedom Initiative, which has provided guidance to the states in developing Olmstead/ADA compliance plans. In addition, both the Bush and Obama administrations have voiced support for increased federal payments to assist states in transitioning Medicaid nursing facility patients into home care services. In some states, Medicaid has moved with reasonable and deliberate speed. In others, action seems nonexistent. One problem is the limits on valuable federal support for the administrative actions needed. Another problem is the pressure from institutional care providers to slow any progress towards home care alternatives.
The Deficit Reduction Act of 2005 (DRA), (Public Law 109-171) contains several provisions that rebalance Medicaid long term care coverage toward home care. These initiatives include a “Money Follows the Person Rebalancing Demonstration” through which individuals who are residing in institutions can be provided an opportunity to receive alternative home and community-based care. The provision makes grants and enhanced federal Medicaid payments available to incentivize states to compete for an award of the demonstration program. The enhanced federal payments can range as high as 100 percent of the cost of the home care for the first 12 months. The bill provided $1.75 billion in new federal payments to support the project.
DRA also included an optional benefit for Home and Community-Based Services for the Elderly and Disabled that allowed states to bypass the “waiver” process that includes requirements for proving the cost effectiveness of services. This benefit required that states establish more stringent standards for Medicaid payment of institutional care as one means of shifting patients to home care settings.
The DRA provisions, while evidencing the federal preference for rebalancing Medicaid long term care expenditures in favor of home care, also highlight support for self-directed care. Both provisions allow for, and even encourage, the availability of services through consumer-directed care models. However, these models are designed with quality assurance requirements, a patient need assessment requirement, and authority for the use of multiple delivery model types. The degree to which states are establishing and enforcing effective quality standards is less clear.
The Patient Protection and Affordable Care Act of 2010 (PPACA) incorporated several provisions that encourage greater utilization of home and community-based services under Medicare, including, under sections 2401-2406:
• Establishment of the Community First Choice Option, which allows for enhanced federal matching for community-based attendant supports and services to disabled individuals up to 150 percent of federal poverty level who require an institutional level of care;
• Extension of the Money follows the Person Rebalancing Demonstration program;
• Protections against spousal impoverishment in Medicaid home and community-based services;
• Enhanced federal matching through the State Balancing Incentive Program for select states to increase the proportion of non-institutionally-based long-term care services; and
• New options for states to offer home and community-based services through the state plan for individuals with incomes up to 300 percent of the maximum supplemental security income payment who have a higher level of need and to extend full Medicaid benefits to individuals receiving home and community-based services under a state plan.
In recent years, as financial strains have beset federal and state governments alike, providers of home care services have raised concerns that while rebalancing efforts continue, payment levels fall far short of the cost of providing services. In addition, these financial strains have led a number of states to shift Medicaid beneficiaries into managed care plans for acute care services as well as long term care supports. The experiences with long term managed care create concern that the rebalancing of care away from an institutional setting and towards home and community-based care will be set back.
Recommendation: Congress should ensure that CMS properly implements the Medicaid home care expansion in PPACA and encourage states to embrace broader coverage of home and community-based services under Medicaid.
Congress should establish firm deadlines for Olmstead/ADA compliance with the penalty of lost federal financial matching payments for failure to meet the deadlines. Further, Congress should authorize an increase in the federal matching payment for expanded Olmstead/ADA-compliant home and community-based services, and 100 percent federal reimbursement for state Medicaid compliance costs in transitioning to improve home care alternatives. The rebalancing of expenditures in favor of home care should be accomplished consistent with principles that: 1) establish Medicaid home care as a mandatory benefit in state Medicaid programs; 2) authorize care based on need; 3) assure quality of care through enforcement of comprehensive delivery standards; 4) provide the Medicaid client with a choice of care delivery models; and 5) ensure adequate reimbursement levels.
Congress should monitor carefully any shift of Medicaid beneficiaries into managed care and ensure that the patients’ rights to home care under the ADA and the Olmstead decision are fully secured.
Rationale: After several years, it is necessary for Congress to intervene and secure the systemic reforms guaranteed by the ADA. However, states need financial support in these efforts since the transition will have start-up costs. The rebalancing must be accomplished with federal minimum standards of care and access whether the state maintains a traditional fee-for-service care model or a managed care approach.