IPS slams home care industry
Education managers can help staff make transition
The home care industry has been given little relief during the sweltering summer months, as the Balanced Budget Act of 1997's changes continue to unfold. The Health Care Financing Adminis tration (HCFA) in Baltimore suspended its surety bond regulations at the end of June. But congressional bills to repeal the venipuncture rule and the interim payment system (IPS) hadn't progressed very far as Homecare Education Management went to press. (See July HEM, p. 101, for more on Medicare's venipuncture change.) Here's a thumbnail sketch of the effect the IPS is having on home care agencies:
o Beaumont Home Care in Sterling Heights, MI, cut $200,000 from its annual salary budget by reorganizing office support staff positions, switching to computer documentation, and eliminating 11 jobs through attrition, says Deborah Kleinhomer, MSN, RNC, CNAA, CHCE, director. Beaumont is a hospital-based, full-service agency serving three counties in southeastern Michigan.
Kleinhomer says agency revenues will decrease 17% because of the IPS. "Our costs are still higher than what we will be reimbursed for. Any positions that were open at the end of 1997, I did not fill. That work is being done by existing employees. Our motto is'more skill, less frill.'"
o The IPS will reduce reimbursement rates by about 25% for the Visiting Nurse Association of Crawford County in Meadville, PA, says Julie Hovis, RN, MSN, chief executive officer of the hospital-based agency, which covers one county and parts of two others in Northwestern Pennsylvania. "We've been working with our staff on any way to cut expenses and increase productivity," Hovis says.
o Travertine Health Services Inc. in Sulphur, OK, switched to the IPS on Jan. 1. By the end of January, the agency's staff was cut by about two-thirds, from about 60 to just 19, and remaining employees were asked to take salary cuts, says Judy Hughes, RNC, BSN, assistant director of nurses and inservice director. Travertine is a freestanding, full-service agency that serves a mostly rural area in Southern Oklahoma. In February, it discharged 45 patients, including 30 who had been receiving venipuncture, Hughes says.
Oklahoma's average number of visits per patient was 142 a year, she says. One reason it was so high is that the state has many rural and small-town areas where patients have little access to physicians, clinics, or hospitals, so they rely on home care for some primary care health needs. Now, with the IPS, Travertine is trying to achieve 80 to 85 visits per patient.
o The Visiting Nurse and Hospice Services of Kalamazoo, MI, also began using the IPS in January, and the reimbursement change has had a dramatic effect on the agency's budget, says Jill Eldred, president and chief executive officer of the agency, which serves seven counties in South western Michigan. "We have had budget reductions of close to $1 million to respond to IPS," she says. "We've had to cut close to 40 staff positions."
Due to the IPS and the venipuncture change, the agency has decreased the number of visits per patient. "We've had to make other arrangements for up to 60 venipuncture patients, including finding community services for those patients," Eldred says.
The IPS has especially hurt Michigan agencies because Michigan's home care industry already had experienced fewer patient visits than agencies in most states, she says. "The national average that HCFA used to base its IPS formulas was 75 to 80 visits per patient, and in Michigan, the average was around 40 visits per patient per year," she explains.
The IPS will make these agencies roll their average number of visits back to earlier levels. For the Visiting Nurse and Hospice Services, that will mean an average of 38 visits per patient. In 1997, the agency's average was 42 visits per patient, says Val Boosi, vice president of finance for the agency. "IPS rolls everybody back to 1993 levels," she says, adding HCFA never considered that since 1993, home care agencies have seen more high-tech patients who sometimes require longer and more extensive home care visits.
Texas lawsuit fails in court
Beaumont Home Care and the Visiting Nurse and Hospice Services have held several inservices on how the IPS has affected the agencies' business and how the agencies will handle the transition to a prospective payment system (PPS). (See story on IPS education, p. 119.) Still, the change has been hard on nurses and other employees, Eldred says. "Our agency is 50 years old, and I've been with the organization for close to 23 years. This agency has had a long history and tradition of always helping everyone, never denying service. It's been a dramatic cultural change within the organization."
A U.S. district judge in Dallas wrote in a June ruling on the IPS that the payment system might cause some home care agencies to go out of business, and it might hurt patients. But the judge said the effects of the IPS are exactly what Congress intended in order to keep Medicare solvent. The Texas Association of Home Care in Austin had asked the court in May for a preliminary injunction halting the new Medicare payment system. The judge denied the request in a 24-page ruling.
The Texas court decision was a disappointment but not a surprise, says Eric Sokol, JD, assistant director for government affairs at the National Association for Home Care (NAHC) in Washing ton, DC. "We always knew that it was a high legal standard to get a preliminary injunction," he says. "We are still formulating court cases, but the most expedient way to get some reform is through legislative channels."
NAHC has been lobbying for several bills that would repeal the Medicare venipuncture change and delay implementation of the IPS. "We do have some members of Congress at highest levels saying there will be IPS reform legislation this year," he says. "Again, what it will look like or whether it is something that NAHC or the home care industry can support, we will see." (See list, p. 122.)
NAHC officials say the home care agencies most affected by the IPS include the following:
· agencies whose case mixes have increased in severity since 1994;
· small agencies that serve a large number of high-use patients;
· rural agencies where patients have a more difficult time finding alternative sources of care;
· agencies that have added services since 1994 for which the cost will not be included in the per-beneficiary limit calculation;
· new providers and agencies formed by mergers and acquisitions.
Problems with the IPS have become more striking because of HCFA's recent announcement that the PPS might be delayed well past its projected Oct. 1, 1999, implementation date. HCFA says the delay would be due to the year 2000 computer problem. Governments and industries worldwide are scrambling to reprogram their mainframe computers because current programming uses only two digits for the year, and the computers do not recognize the year 2000. Computer dates could revert to the year 1900, causing potentially widespread business and financial difficulties.
"We always felt the Oct. 1, 1999, implementation date was optimistic," Sokol says. "HCFA may want to blame it on the [year 2000 computer] problem, but even without that factor, it would have been a tough deadline for HCFA to reach."
Education managers will need to strike a balance between showing employees how serious the current problems are and encouraging them to continue to do their best work, Hughes says. "We want to make sure they know the seriousness of the situation, and we want to continue to be a viable agency. So we have to do a good job financially, and we have to do a good job out in the home to make sure these patients can take care of themselves."
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