Who’s getting hurt by the BBA?
Who’s getting hurt by the BBA?
Some would have you believe no one is
Depending on whom you believe, either the American public has suffered no ill effects under the Balanced Budget Act of 1997 (BBA) or they are being denied access to the most basic of care with the frailest suffering the most.
A congressional advisory panel, the Medicare Payment Advisory Commission (MedPAC), has reported that Medicare beneficiaries have not lost their access to health care services under BBA. The commission based its findings, which are due out in March as part of the group’s annual report to Congress, on the Health Care Financing Administration’s Beneficiary Health Care Service Use surveys.
Those surveys were taken in 1998 at a time when a large number of the BBA’s payment provisions had already taken place. The surveys found that only slightly fewer beneficiaries had delayed seeking health care because of the costs. The panel also found that a slightly greater number of beneficiaries didn’t see a physician that year at all — a fact whose meaning is open to interpretation.
Among those beneficiaries who receive benefits through HMOs, the percentage of those who delayed care because of costs did increase slightly. But even so, MedPAC feels that the BBA has "posed no significant threat" to the beneficiaries’ access to health services.
Rising prices
MedPAC’s findings, however, are in direct contrast with a host of other studies and testimony from health care professionals, including hospital executives who have stated that they have been forced to cut Medicare services because of the costs involved.
Recently released Consumer Price Index figures, which measure changes in retail prices, indicate that hospitals, in response to spending limits imposed by the BBA, raised prices last year at twice the rate of inflation.
New government figures show retail prices rose 5.1% last year compared with a 2.7% inflation rate for all goods and services, the largest increase since 1994 when prices rose 5.5%. In 1998, when the overall inflation rate was 1.6%, hospitals raised prices by 3.2%.
According to the Labor Department’s Producer Price Index, which measures changes in net revenues (money actually collected by hospitals), hospitals’ inpatient Medicare revenues rose 1.3% last year compared with 0.4% the year before. Inpatient Medicaid revenues grew 0.5% last year, whereas in 1998 they had fallen by 2.2%. And inpatient revenues from private payers rose 2.4% last year compared with 2.1% in 1998. As for outpatient services, the amount of growth depended on the payer source outpatient services; Medicare led the pack with a 2.5% increase. Net revenues grew last year by 1.6% in comparison to a 1.1% hike in 1998.
Self-admitted price increases on the part of hospitals certainly lend credence to the results of the findings of a study commissioned by the Washington, DC-based groups National Association for Home Health and the Home Health Services and Staffing Association (HHSSA), which helped fund the study.
The two groups asked researchers at the George Washington University (GWU) Center for Health Services Research and Policy, also in Washington, DC, to conduct a two-part study of the effects of the home health interim payment system (IPS) on Medicare patients.
Last fall, as Congress considered changes in BBA cuts, the preliminary findings of this study boosted the case for reform. Now, the final report, An Examination of Medicare Home Health Services: A Descriptive Study of the Effects of the Balanced Budget Act Interim Payment System on Hospital Discharge Planning, has been published and shows that Medicare patients are being denied access, with the sickest patients feeling the greatest pinch.
In fact, 68% of all hospital discharge planners surveyed by GWU reported increased difficulty in initially obtaining home health services for Medicare patients who require home health care, according to a report released in January. Meanwhile, only 22% of hospital discharge planners surveyed reported no changes in difficulty in obtaining or sustaining home health care services for Medicare beneficiaries since implementation of IPS.
A geographic difference
Those findings were included among the results of the second phase of the study designed to measure the impact of payment changes mandated by the BBA.
HHSSA said the findings are further evidence of a severe decrease in access to home health services for the sickest, most frail Medicare beneficiaries over the past two years. The first part of the study reported on changes in home health agency patient admitting practices, clinical practice patterns, and staffing patterns that could affect beneficiary access to care or the quality of that care.
The initial phase of the study found that the majority of home health agencies responding had altered their case mix and/or practice patterns to conform utilization to reimbursement.
It also found that home health agencies located in the South generally lack the capability to alter their case mix as much as other regions. In addition, chronically ill beneficiaries were found to have experienced the highest degree of fragmented care as well as more disruptions in care as a result of payment changes.
This phase of the study zeroed in on the experience of hospital planners in obtaining home health services for Medicare beneficiaries after discharge from the hospital since IPS was imposed in 1997.
Other major findings from the report include:
1. 61% of discharge planners surveyed reported increased difficulty in obtaining sufficient intensity of services sought in the initial placement.
2. 56% of respondents reported increases in the number of beneficiaries requiring substitute placements, primarily in skilled nursing facilities, in lieu of home health services.
3. 41% of discharge planners surveyed reported increased hospital readmission rates among beneficiaries initially discharged to home health services.
4. Discharge planners reported that the type of beneficiary presenting discharge problems is predictable based on the beneficiary’s service needs.
Chronically ill suffer most
According to the report, discharge planners indicate that the most serious placement and sufficiency problems apply to chronically ill, medically complex beneficiaries as well as those who require high-intensity services over a relatively short period of time.
The beneficiaries found to be most affected were those with pulmonary disease, congestive heart failure, IV therapy and infusion needs, diabetes, and complex wound care needs. Notably, no hospital reported home care discharge planning difficulties for short-term, low-intensity patients.
"There is compelling evidence of differential treatment of sicker beneficiaries in response to the financial incentives of IPS that suggest problems with access to and quality of home care services for this population," the study concluded.
"These findings raise significant policy questions that should be addressed in evaluating IPS and any other payment system that may be developed."
The report also argued that further studies should be conducted to track beneficiary health status through payment changes in payment methodology and also to evaluate disruptions in care and the relative cost-effectiveness of care in different settings.
"Given the evidence that sicker beneficiaries have been disproportionately affected by IPS, greater attention must be focused on structuring payment to providers to create incentives for appropriate care to higher-cost beneficiaries," the report added.
Eight states involved
This phase of the study examined the experiences of hospital discharge planners in eight states — California, Florida, Indiana, Iowa, Louisiana, Massachusetts, Pennsylvania, and Texas — and focused on the availability of services, the need to substitute alternative services, and changes in hospital readmissions since the BBA. The report did not address the availability of these services when patients were discharged from nonhospital facilities, long-term acute care hospitals, or through physicians’ offices.
Forty-one hospitals, ranging in size from 56 beds to 1,248 beds, participated in the study. The response rate was 87%.
[More information on the study is available from the George Washington University Medical Center at (202) 296-6922.]
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