Re: Home Health Hit Hard - Follow up

[Guest guest]

Here is a follow up story on the Home health debacle in Florida that we

have discussed:

Monday -- July 20, 1998

Home health care firm sues feds

ville company seeks injunction

by Gilmore

A ville-based home health care association is waging a

court battle with the federal government over Medicare changes that many

blame for causing 41 Florida home health care agencies to close their

doors in the past few months.

The Home Care Association of America Inc., which represents 470 agencies

around the nation, went to court July 8 in Oklahoma City seeking an

injunction against the Health Care Financing Administration, the division

of the Department of Health and Human Services overseeing Medicare

payments.

The injunction concerns an Interim Payment System set up by HCFA to

control escalating costs in Medicare, the federal health insurance

program for those aged 65 and older. An HHS study reported that home

health care was the fastest-growing recipient of Medicare funds,

increasing from 2.9 percent in 1990 to 8.7 percent in 1996.

Under the old " cost-based " system of payment, there were no

limits on the number of visits or types of care provided to patients,

which resulted in waste, fraud, and abuse. The Interim Payment System is

intended to be a bridge to an as-yet unfinished Prospective Payment

System, scheduled to begin in 1999.

" It's designed to stop agencies from providing for services not

medically necessary or billing for services not performed, " said

HCFA spokesman Peacock. " Scrupulous agencies should not be

harmed. "

Under the Interim Payment System, a part of the Balanced Budget Act of

1997, Medicare reimbursement rates to home health agencies are returned

to their February 1994 levels, the last time HCFA audited cost reports.

The Interim Payment System compensates agencies according to the lowest

amount among three costs: actual costs, a per-visit cap or an aggregate

per-beneficiary cap.

" The per-beneficiary cap is the killer, " said Gene Tischer,

executive director of the Association of Home Health Industries of

Florida Inc. " It's based 75 percent on the average of what services

your agency was billed for in 1994, and 25 percent on what was done in

your region. So if you ran a lean agency and only performed the services

you were supposed to perform, you just got screwed. If you were a fat cat

agency, milking the system, you get rewarded for it. "

While larger hospital-based agencies may have more maneuvering room, many

smaller, free-standing agencies feel that this is a personal attack.

" This part of the Balanced Budget Act was written specifically to

put free-standing agencies like ours out of business, " said HCAA

Chairman Dwight Cenac.

Similar associations around the nation are echoing that view.

" We are small and we're not unified, " said Anne ,

director of the American Federation of Home Health Agencies in

Washington, D.C. " The hospitals, on the other hand, are some of

Congress' biggest funders and lobbyists. "

About 1,100 agencies across the country have gone out of business this

year, according to .

From April to mid-June, 41 of Florida's Medicare-certified home health

care agencies shut their doors, including 26 of Florida's 400

" parent " agencies, Tischer said.

HCAA's case is not the first against HCFA regarding the new laws, but the

ville association is hoping for a decision more favorable to its

cause than some previous court rulings.

Last month, a Dallas judge threw out a case against HCFA filed by four

home health associations seeking an injunction on the grounds that the

payment-system change was unconstitutional.

HCAA filed suit through its Oklahoma chapter because it was informed that

it would have a better chance there, Cenac said.

He predicted dire consequences for a large number of patients as a result

of fewer home visits by nurses and the new law that nurses can no longer

make visits for venipuncture (taking blood).

" Without the help a lot of people get in their homes, many of them

are going to end up in nursing homes or assisted living facilities, "

Cenac said.

Attorney Bonnie Osler with the Department of Justice pointed out in court

this week that more than 40 percent of the services of home health

agencies nationwide were not medically necessary.

One co-owner of a home health agency replied that the government should

then be looking at the doctors who determine the agencies' treatment

plans, rather than focus the agencies themselves.

While free-standing agencies may be spearheading the battle,

hospital-based agencies are feeling the cuts as well.

" We had about a 19.1-percent drop in Medicare reimbursement, "

said Meleah Bridges, manager of operations and finance for Baptist/St.

s Health Systems. " Medicare is about 55 percent of our

business, which worked out to about a 10-percent drop in revenue. We had

seen some of these changes coming and had already been trying to

streamline. Basically, we've attacked administrative costs and merged

three separate branches into one branch. "

Cenac said hospital-based agencies are more to blame for waste and fraud

than free-standing agencies.

" Hospitals, through a loophole in the old system of cost-based

reimbursement, could shift financial overhead to the home care

program, " Cenac said. " When they increased home health care

costs, they increased their reimbursement and had an excuse to charge

more per visit. "

, vice president of Baptist/St. Health Systems,

said such practices would make his system uncompetitive and labeled the

charge ridiculous.

Closing arguments in the trial are expected around the end of the month.

R. Kovacek, MSA, PT

KovacekManagementServices, Inc.

The FOCUS Group, Inc.

20225 Danbury Lane

Harper Woods, MI 48225

Fax

Email Pkovacek@...

<http://www.theFOCUSgroup.net>

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