MedPAC: Is it Paranoia if They Really ARE Out to Get You?

The Medicare Payment Advisory Commission (MedPAC) – the independent federal body charged with advising Congress on Medicare payment policy – recently issued its 2007 “Databook on Health Care Spending and the Medicare Program.” The 208-page report is jam packed with charts and tables that analyze Medicare spending in more ways than any rational person could care about.

MedPAC submits a “Medicare Payment Policy” report to Congress every March. As just about anyone involved in Medicare home health knows, MedPAC has a more-or-less standing recommendation every year that Medicare payments to home health agencies should be frozen. The MedPAC “freeze home health” recommendation is one of those reliable signs of spring -- like the daffodils on Nantucket.

Given MedPAC’s position on home health rates, I thought it might be interesting to browse through the Databook and look at how home health compares to some of the other slices of the Medicare pie. I found some interesting tidbits to chew on:

Medicare pays for 38% of all home health services, more than any other type of health care. By comparison, Medicare pays for only 29% of hospital care, and just 16% of nursing home care.

Interpretation: home health agencies are far more susceptible to changes in Medicare payment policy than are other types of providers (Witness the fact that roughly 40% of all Medicare home health agencies went out of business when CMS implemented the disastrous “Interim Payment System” in 1997.) The major changes that CMS has proposed for the PPS case mix system for 2008 could conceivably have a similarly disruptive impact on the industry.

But the percentage of Medicare funds spent on home care has dropped dramatically in recent years: In 1996, home health accounted for 9% of the Medicare pie. By 2006, that percentage had plunged to just 3%.

Interpretation: Again, the impact of the IPS, from which the home health industry has yet to fully recover.

Overall Medicare spending on all post-acute care services (including home health, skilled nursing facilities, inpatient rehabilitation, and long-term care hospitals) grew by 68% between 1999 and 2005. But Medicare spending on home health grew by only 46% during that period; SNF and inpatient rehab spending grew by 70% and 67% respectively, while LTCH spending grew by a whopping 170%.

Interpretation: The transition from IPS to PPS did NOT result in runaway expansion of home health services. On the contrary, the Medicare program is increasingly relying on inpatient services for post-acute care. Given that home health services are far more cost-effective than inpatient care, CMS should be exploring incentive to expand Medicare home health utilization rather than try to restrict it.

Between 2002 and 2005, the percentage of SNF patients who were categorized into the “ultra-high” case-mix category nearly doubled, from just over 7% to 14%. Similarly, SNF patients in the “very high” category increased from 20% to 27%.

Equal Choice Law Turns One

Mass Home Care reports that the Massachusetts Equal Choice in Long Term Care law passed its first anniversary on August 2. Celebrations were muted as progress has been slower than hoped for. The state did submit a Demonstration (1115) Waiver, which has yet to see federal action. The preadmission nursing home counseling has yet to be implemented.

Among the challenges to the state remaining are to: redirect long term care funds (in a budget neutral fashion) to community services; develop an expedited Medicaid authorization process for people needing home and community-based care; establish new community-based models that are not only efficient, but effective in nursing home diversion (the goal of the waiver effort); create a waiver assessment and quality assurance system. Not to mention, put together a rate structure that can help attract the workforce needed to serve a new group of clients.

Rebalancing Massachusetts long term care system is well overdue. Let's get to work. Together we can.

Why So Much?

The issue of the local cost of health care gets a good airing in the latest issue of Commmonwealth magazine available on newsstands and online. The article - Cost Unconsious - by David Denison rounds up the usual insurance, hospital and state government executives to agree that the current rate of cost escalation is unsutainable. To see who they blame and what they propose will require reading the article. Hint: there is little "physician heal thyself."

Test Your Health Care Reform Knowledge

If you think you know a lot about about Massachusetts' landmark health care reform legislataion, you may want to test your yourself by taking the health care reform quiz recently posted to WBUR's health care reform Blog CommonHealth. The blog itself is great reading as various parties on all sides in the ongoing debate about the law's intent and value weigh in on a daily basis. It is just what a blog should be - a conersation between interested parties - with an added benefit that we can all listen in.

And, BTW, there will be prizes for the most correct answers - and, I believe, for the best health reform haiku. So all you poets are welcome to play too!

Federal Budget Watch

Home health care once again has a lot at stake as elected officials in Washington debate the FY 08 Federal Budget and two Massachusetts representatives are front and center in the process. At stake is whether home health care will get a planned inflation increase in its Medicare rates - or whether this needed rate reflief will be sacrificed to pay for other Medicare and health insurance expansions, most notably a $50 billion increase for SCHIP - the state children's health insurance program.

Senator John Kerry is a member of the Senate Finance Committe that will be making these funding decisions over the next few weeks. Congressman James McGovern (D-Worcester) has been a primary sponsor of a Congressional Letter - now with more than 100 siganatures to preserve home health funding in this year's budget.

If you care about preserving home care, contact these elected officials and thank them for their support and ask them to hold steady.

Hospice Bad News/GoodNews

This week Brown University published their findings in a major study on patient satisfaction and the timing of referrals to hospice. Nationally, 11% of the more than 100,000 families surveyed said that they felt that referal for hospice care was "too late." (The figure was 12.4% for Massachusetts.) While the median length of service for hospice was 26 days in 2005, data from the National Hospice and Palliative Care Organization (NHCPO) indicates that 30 percent of people served by hospice in the U.S. dying in seven days or less.

More importantly, however, hospice usuage as covered by the federal Medicare program has grown tremednously in the past five years five years. In Massachusetts the number of patinets has increased by 49% between 2001 and 2005 - a good sign that families and most importantly physicians are seeing the benefits of this service - not only for the patients, but for the surviving families. (See work of Nicholas Christakis at Harvard Medical School on this.)

For families who need information about hospice care at End of Life NHCPO has developed a very informative website as a good place to start.

We're Number 8

The Comonwealth Fund has handed Massachusetts a rank of Eighth in its new report Aiming Higher: Results from a State Scorecard on Health System Performance. Generally the areas in which our state scored the lowest are premium costs for employer sponsored insurance and "Avoidable Hospital Use and Costs." In the area of readmissions to hospitals during a home health episode. we were ranked 35, with a rate of 29.0, compared to a national rate of 26.9. Clearly this is not a problem specific to home care as in the category of overall readmisions for Medicare, 40 states did better than us.

Medicare has adopted reducing acute care hospital (ACH) admission from home care as its national quality improvement goal for 2007. The goal for the campaign is to reduce the average ACH rate across all campaign participant home health agencies by a 5% relative improvement from baseline to the end of the campaign. The Home Care Alliance is a designated partner (a LANE) to the federal Medicare program in this QI effort and more than 75 local agencies have signed up as committed partners.

Progress will be tracked through February 2008 and publicly reported in May 2008.