Clinton’s proposed budget: You may benefit from Medicare agencies’ loss
Private duty business may increase with the privatization of Medicare
President Clinton’s proposed budget may primarily address Medicare-reimbursed home health care, but private duty providers may find the effects of the changes, if enacted, trickling down to them in the form of increased business, experts say.
The budget proposed a six-year $20 billion cut in home care spending, plus a shift of some benefits from Medicare Part A to Part B.
This shifting of funds from Part A to Part B probably won’t have a direct effect on private duty, but other parts of the proposal might, says Glen Jett, RN, BSN, private duty manager, Visiting Nurse Association, in Kansas City, MO.
The President’s proposal advocates establishing market-oriented purchasing for Medicare, including prospective payment systems for home health care, and a number of anti-fraud and abuse initiatives. It also recommends reducing reimbursement to managed care plans by about $46 billion over six years.
Capping home health spending may have cause more people to try to access those services on a private pay basis or to try to get into the many other indigent or grant-based programs that are available, Jett predicts.
A lot of federal and state programs across the nation provide in-home care for frail elderly, he says. "Most of these programs nationwide already have a fairly extensive waiting list and are very limited in what they can offer. I think the demand for that is going to increase."
People who are not able to access these programs may "fall through the cracks" and may end up hospitalized or institutionalized, further burdening the Medicare system, Jett says.
One of the problems challenging the Clinton administration is that Part A of Medicare, which includes payment for home health visits, is a trust fund that is projected to run out of money in the year 2001. According to highlights of the plan, the proposal restores the "original" split of home health care payments between Parts A and B of Medicare by reimbursing the first 100 home health visits following a three-day hospitalization by Part A. All other visits, including those not following hospitalization, would be reimbursed by Part B, which is funded by a combination of general tax revenue and premiums from beneficiaries. (For highlights of the President’s proposal, see story, at right.)
This shift is expected to remove about $50 billion in costs over five years from Part A. Republicans, though, have called the proposed switch a bookkeeping "gimmick" and say that it would be unacceptable as a step toward getting the $100 billion needed to extend the life of the trust fund.
The National Association for Home Care (NAHC) in Washington says it sees a prospective payment system as inevitable, but is concerned about the timing and form of the program. Some acute patients may need four or five visits, while chronic patients might need 200 visits. PPS should be able to help home health agencies with large numbers of severe, costly cases, NAHC representatives say.
The privatization of Medicare
Many private duty providers across the nation are already seeing the privatization of Medicare, Jett says. According to the Department of Health and Human Services in Washington, DC, more than 4.9 million Medicare beneficiaries were enrolled in a total of 336 managed care plans as of Jan. 1. This accounts for 13% of the total Medicare population.
All of the managed care plans receive a monthly payment from the Medicare program, and many offer additional services. "Certainly, in our part of the country, we have seen the Medicare replacement plans playing a big role," says Jett. "Most of the major HMOs and managed care organizations in our area have come out with those product lines of Medicare replacement policies and are actively adding these patients to their roles. In some ways, it almost feels like that’s kind of the process that Medicare reform is going to take a sort of gradual privatization rather than any sort of governmental action."
Another common benefit the insurers offer is for limited respite, he adds. "It’s most typically CNA, short-shift work, lasting maybe four to six hours." The benefit usually has an annual cap, such as 80 or 100 hours.
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