Home health and nursing homes seek year-end breaks in spending deal

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Long-term care and home care providers are mounting calls for financial aid under a year-end congressional spending deal, testing their influence against other health care interests trying to to insert favorable provisions in the unavoidable bill.

Why is this important: Feuds over health care “extenders” are an annual rite, but the stakes are higher this year due to labor and supply chain issues and the aftermath of the pandemic.

  • Nursing homes accounted for nearly a quarter of COVID-19-related deaths in the United States and were targeted for reforms in President Biden’s State of the Union address. But the industry is a vital cog in the healthcare system, supporting more than 1.4 million people, as well as hospitalized patients.
  • Demand for home and community care has increased during the pandemic, but a severe shortage of workers threatens the option, even for people who can afford it, according to the Washington Post. Nearly 5 million patients received home health services in 2017, according to the Centers for Disease Control.
  • Big home health companies like Amedisys, LHC and Aveanna that were poised to benefit from a shift to more home care could be hit by a proposed steep cut in Medicare payments for 2023.

Where are things going: Congress Deferred Key Funding Decisions to the ‘Lame Duck’ Session, and Democrats Resisted reallocating unspent COVID-19 funds previous relief packages.

  • Nursing homes say there will be closures without reliable government funding as the industry grapples with negative margins and a median occupancy rate of around 77%.
  • The home health industry weighs possible legal action to stop the cuts he faces while putting his hopes behind legislation of Sens. Susan Collins (R-Maine) and Debbie Stabenow (D-Mich.) which would delay cuts until 2026.

What they say : “We have seen past rate reductions, reductions in access to care in general and in the care that people receive,” Bill Dombi, president of the National Association for Home and Hospice Care, told Axios. .

  • “Our situation is much more exaggerated than other sectors in the space,” Clif Porter, senior vice president of government relations at the American Health Care Association/National Center for Assisted Living, told Axios. “We lost 14% of our workforce during COVID and we had a very marginal and slow recovery of that workforce. This is one of the lowest levels we have seen since the 1990s.”

Yes, but: Nursing homes and home health agencies have been overpaid by the Centers for Medicare and Medicaid Services due to an unintended increase in payments to industries stemming from the current reimbursement system.

  • The agency then delayed the adjustments due to the pandemic. Now some of the adjustments are coming due.
  • The advisory commission on the payment of health insurance supports payment reforms, saying the program has long overpaid for home health care. In retirement homes, note the combination federal relief programs and recent changes that take into account “case mix” or planned resources to care for residents, have improved the financial performance of facilities.

Go further: Home health insurance could potentially result in an $810 million payment reduction next year, which the industry says will force agencies to reduce their coverage areas or the volume of patient visits.

  • Raymond James analyst Chris Meekins expects CMS to soften the blow when it releases a final rule, possibly next month. But the cuts could be taken off the table entirely if Collins and Stabenow squeeze their three-year overdue payment into a year-end spending package.
  • Nursing homes that would have lost $320 million under updated payment policies won concessions that will see cuts spread over two years, as well as a 2.7% pay rise for 2023.

  • CMS said the decision was “to take a more cautious approach in order to mitigate potential negative impacts on the care home industry, such as facility closures or disproportionate impacts on rural and small-scale facilities. “. Operators say this still does not match the rising costs they are facing.

What we are looking at: Biden in his State of the Union called for “higher standards” for care homes, including minimum staffing requirements and financial incentives based on the quality of care provided. The proposed rules could come next year.

  • The industry is backtracking, saying a shortage of skilled workers and lack of funds to enforce a staffing mandate make it unworkable. Industry-backed bills in the Accommodation and Senate would, among other things, expand staffing flexibilities in the era of the pandemic and address workforce training and retention.

Keep in mind: Health Insurance only covers care services in nursing homes or at home for convalescent care and short-term discharge. Long-term care must be paid for directly or possibly by Medicaid.

  • Experts say a change is needed in the long-term payment system and that home health can be more cost-effective than care offered in facilities.
  • “We need to expand home and community care options while reimagining what a nursing home might look like,” David Grabowski, a professor of health policy at Harvard University, told Axios.
  • As home health and long-term care facilities seek more funding, Grabowski said the home health sector appears stronger, though he noted that widespread nursing home closings will not have not yet materialized.

The bottom line: With a pile of health care spending demands packed into a post-election session, industries will compete with doctors, hospitals and other provider groups for end-of-year freebies. “December is going to be a mess,” Meekins said.

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