News from the front: Head for the bunkers
News from the front: Head for the bunkers
Learning to navigate Medicare's new minefield
With each passing day, working in the home health care field is becoming more like warfare. If home care were a country, it would be Bosnia. The Health Care Financing Administration in Baltimore has its snipers in place in the form of surety bond regulations and the Interim Payment System (IPS), launched with the Balanced Budget Act of 1997. The industry is under siege.
Now, as the government steps up its attack to implement a full-blown Prospective Payment System (PPS) for home care, a series of reimbursement caps are being put into effect, the latest of which were to take effect Oct. 1.
It's like navigating a minefield, and you should expect the usual results: the per-visit and per-beneficiary limits on Medicare reimbursements will cause more casualties in the home health industry.
Many will be wounded. Some will die, but others could escape serious damage thanks to luck or strategy or a little bit of both. Here's what some in the industry are saying about the new caps and what they're doing to make sure they land in the safe zone:
r Gregory P. Solecki, vice president of Henry Ford Home Health Care in Detroit, jokingly says his agency has considered getting out of the business to pursue something that will really benefit society - becoming Beanie Baby distributors. Until that day arrives, the people at Henry Ford have "been looking to be more productive and managing our costs more effectively," he says. "We're really just talking about keeping our nose to the grindstone - all we can do is work harder and smarter and hope there is a reward for this."
Henry Ford began preparing for the impending caps back in January. "We merged with another agency on Jan. 1, and closed their offices to decrease our property expenses," says Solecki. "We have a strategic planning team and have already put a number of their initiatives in place. Recently we sat down and put them into a rapid acceleration phase."
In particular, says Solecki, they analyzed expenses and then set about cutting wherever possible. "We put our expenses in a hierarchical fashion in descending order as far as the percentage of our total cost and looked at the heavy hits down to the smallest." The No. 1 expense, as it turned out, was salary and benefits, comprising 91% of the agency's total budget.
"Not that we have high salaries," he adds, noting that on the health care continuum, home health care is a "relatively low wage payer." And he adds, "We just don't buy anything else."
The agency hasn't cut salaries yet but has opted not to replace some positions. Further, mileage reimbursement and supplies are no longer being paid. Despite what he realizes are "adverse community relations," by not stocking and delivering supplies, Solecki says his agency, which has a partnership with its own HME, has already saved $60,000 this year.
A utilization management nurse is on staff "to help us do more gatekeeping and make sure that we're not dealing with many outliers," he says. In spite of Henry Ford's cost-saving efforts, Solecki says it appears the agency will end up in the red. "It looks like we'll be losing money, but one of the benefits of the HME is that the home health care agency is looked at as a cost center so the fact that we're not making money won't lead to our immediate demise. We aren't facing the same challenges that our freestanding colleagues are - they're up against a wall. We have already cut expenses to the bone. Now our real fear is cutting into the bone," he says.
As for further battle plans, Solecki says "I don't really know what we'll do. I expect what everyone else is doing, tightening our belt some more."
r Jeanne Tucker, RN, administrator of Texoma Community Health Services in Vernon, TX, foresaw the impending reimbursement caps and took action earlier in the year. "I already cut my budget down so much that it really won't be a reaction for me," she says. "I did it at the beginning of the year knowing it was coming because of the Balanced Budget Act."
Not being a hospital-based agency, Tucker realizes it's going to be tough going, especially for agencies in less-populated areas. "For rural areas, they actually reduced reimbursement at a time when our rates have already been drastically reduced," she says. "As it is, I don't see how some of the rural agencies can continue."
But it's not just rural agencies that Tucker sees facing serious threat. "I'm amazed at the number of people who don't seem to have a clue about the Balanced Budget Act and how it will impact their operations so they haven't made any changes," she explains. "And that scares me."
r Chicago-based Rebecca Friedman Zuber, BSW, MA, a self-employed consultant specializing in regulatory compliance issues faced by the home health care industry, says that Illinois has already seen 30 home health agency closures since the beginning of the year. While she can't directly attribute all of them to the payment caps, she says that a good number can be.
What's more, the last round of reimbursement caps forced agencies into merging or combining services with others "because they can't survive under this payment system. A good number are talking about closing in the next few weeks if things aren't changed. A number of smaller hospitals will probably have to get rid of their agencies once they become a drain on their resources," she says. "This is certainly having an affect on agencies' ability to survive."
On a legislative front, Zuber believes that now is the time for the home health care agency troops to strike. "It certainly appears that Congress is interested in doing something to straighten some of this out as long as it's budget-neutral, and the industry is working very hard not to lose the moment," she notes. "We have got to get it done when everyone agrees and is on the same page, but we're all worried that all this craziness in Washington right now will sweep the issue aside. If it does, there will be much fewer agencies."
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