The specter of copayments is one of the biggest issues facing the home healthcare industry today, said a panel Thursday during a Web-based conference.
Hosted by Avalere Health, a healthcare business strategy and public policy advisory company, the panel of Emil Parker, Avalere director, Michael Johnson, director, skilled visit services, Bayada Nurses, and Charlene MacDonald, senior healthcare policy advisor for U.S. Rep. Allyson Schwartz (D-Pa.), discussed the current challenges facing the home healthcare industry with emphasis on the impact of copayments recommended to Congress by the Medicare Payment Advisory Panel (MedPAC) last spring.
MedPAC noted in its report to Congress that about 3.3 million Medicare beneficiaries received home healthcare services in 2009, costing $19 billion. The advisory panel said that a copayment would discourage overuse of home healthcare services and fraud.
[See also: Since when is a co-pay the cure for fraud?]
MedPAC said a copayment of $150 per episode would reduce Medicare spending by $250 million to $750 million in 2012 and $1 billion over five years. And, while acknowledging that some beneficiaries would turn to higher-cost inpatient settings if faced with a copayment for home healthcare services, the panel said it expected Medicare home healthcare expenditures to decrease because on the whole, beneficiaries would use the services less.
Parker said the rationale of copayments as a deficit reduction measure is a faulty one. "The thinking there is that some home health utilization is discretionary and in response to the copayment beneficiaries would forgo this not-absolutely-necessary home healthcare," he said. "Now, what we found about the demographics of the population suggests that for many of these home health users the benefit is not a discretionary item. It's rather necessary to remain in the home as opposed to going into a nursing facility."
"Research basically shows that introducing copayments for outpatient services can actually result in increased spending on inpatient care," he continued. "Basically, when people don't get the outpatient services they need or they forgo outpatient services they need because of a copayment then they're more likely to experience an adverse health event and end up in the hospital."
An analysis by Avalere Health found that the population that would be affected by a copayment for home healthcare services has multiple chronic illnesses, low income and no Medigap coverage. It also found a copayment would increase Medicare hospital inpatient spending by $6 to $13 billion over 10 years.
The home healthcare community is advocating an alternative to copayments: the Skilled Home Healthcare Integrity and Program Savings (SHHIPS) Act, which is projected to save Medicare $22.9 billion over 10 years through integrity improvements.
MacDonald urged those in the home healthcare industry to press their message of the cost benefits of home healthcare services.
"What's on the proverbial table" shifts daily said MacDonald, as political dynamics change as lawmakers debate the budget and related cuts and the debt ceiling.
"It's becoming increasingly clear that beneficiary cost sharing, including home health copays, is very much on the Republican table. That's a stark contrast from where we stand," she said.
"There are very real and detrimental implications when we cut reimbursements or increase cost sharing for the most vulnerable beneficiaries," she added. "The $40 billion in copays is just too easy for Republicans to grab."