The ACA’s Potential Impact on Quality of Care in Medicare Home Health Care

Updated March 15, 2017: What the GOP’s New Health Care Proposal Could Mean for Home Care

In January 2016, we took a look at the potential impact that reduced cuts in Medicare payments under the Affordable Care Act (ACA) would have on the quality of care provided by the home health care sector. Under the new U.S. Administration, the GOP presented proposed legislation that would replace the ACA and includes changes to Medicaid, which also have the potential to limit services offered by home care providers.

Overview: Medicare Payments & Home Health Care

The ACA’s Potential Impact on Quality of Care in Medicare Home Health Care

In 2012, Medicare spent more than $18 billion for nurses, therapists, and home health aides to visit the homes of about 3.5 million Americans too ill or frail to leave the house, providing rehab, help in managing medications, and conducting post-surgical checkups. Under Medicare Parts A & B, home health care services such as intermittent skilled nursing care, physical therapy, speech-language pathology services and continued occupational services are all covered. Medical social services, part-time or intermittent home health aide services, medical supplies for use at home, durable medical equipment, or injectable osteoporosis drugs may also be covered by Medicare.

Typically, a home health agency coordinates the services prescribed by the patient’s physician, who has certified the patient as eligible to receive care at home. The covered services under Medicare must be specific, safe, considered an effective treatment for the patient, and performed by a qualified and skilled provider.

The Affordable Care Act (ACA) sought to improve the quality of care and the manner in which care is delivered, while at the same time reducing costs.  Under the ACA, home health services was one of the mandated 10 essential benefits in an effort to encourage home care for the elderly in lieu of expensive nursing homes and hospital stays. However, the quality of care may be increasingly jeopardized due to changes that were made under ObamaCare.

For example, Medicare payments to home health care providers were reduced by $60 million, or 0.3%, in 2015, as part of a four-year phase-in plan to lower payment rates under the ACA.  The National Association for Home Care & Hospice (NAHC) has calculated the reductions over four years at 14% and estimated that more than half of home health agencies will be paid less than the cost of care by 2017. This could mean fewer home care workers available to help patients, with home health care firms (both for-profit and non-profit) warning that these cuts may result in sub-standard care for patients. In fact, home health agencies say these rate cuts will make it even harder for providers to incorporate home care as a significant piece of the care continuum.

Obama’s 2017 Budget Called for More Changes to Home Health Care

Moreover, the 2017 budget proposal presented by President Obama called for the re-imposition of the Medicare copayment to $100 on home health beneficiaries beginning in 2020 as well as additional cuts to the home health benefit. According to the Partnership for Quality Home Healthcare, “reinstituting beneficiary cost-sharing policies would jeopardize seniors’ access to quality skilled home healthcare.” NAHC also opposes the introduction of a home health copayment, stating: “Congress should oppose any copay proposal for Medicare home health services and prohibit Medicare Advantage plans from charging a home health copay. Reinstating the copay today would directly conflict with the goal of Congress to modernize the Medicare program.”

New Administration Brings ACA Replacement on the Horizon, Medicaid Limits

The ACA’s Potential Impact on Quality of Care in Medicare Home Health Care

Recently the Republicans presented their plan to replace the Affordable Care Act, called the American Health Care Act, to mixed reviews from home health stakeholders. Although the plan is in its infant stages and will most likely undergo significant changes before the final bill, some in the home health care industry have already weighed in. For example, NAHC in a press release cited the following proposed provisions in the new law as having the greatest potential impact on home health care agencies:

  • The elimination of the ACA employer mandate.
  • The repeal of a bonus payment to states adopting a Medicaid personal care attendant optional benefit.
  • The transformation of Medicaid to a per-capita cap federal payment program. The Medicaid per-capita cap, for instance, according to the initial Republican plan, would go into effect in 2020. The loss of Medicaid expansion in states where this was implemented under the ACA would greatly affect home health care agencies as one-third of Medicaid is used to support and provide services in the home and community-based settings, according to New York-based non-profit, Paraprofessional Healthcare Institute (PHI).

Of course, more analysis of the new health care program has to be done to truly understand the true short- and long-term impact of any changes to the home care sector and the populations they serve.

Medicare changes under the ACA and proposed Medicaid limits under the GOP health care plan (if it passes) all have a direct impact on the quality and availability of care for patients. With skilled nursing staff and home health aides already stretched too thin – perhaps because of budget cuts or a greater patient load per employee – home health care firms will become increasingly vulnerable to Professional Liability exposures involving errors or oversights in treatment leading to injury, illness or even death. Greater emphasis on risk management and loss control combined with the safety net of Entity Professional Liability insurance is therefore critical for the continued viability and growth of home health care agencies.

Manchester Specialty Programs is committed to helping protect the future of home health care providers, home care franchisors and franchisees and hospices by providing comprehensive insurance solutions, including Professional Liability coverage. For more information about our products and services, please contact us today at 855.972.9399.

Sources: Medicare.gov, Partnership for Quality Home Healthcare, National Association for Homecare & Hospice