ca home care and hospice: where we stand in 2009

California Association for Health Services at Home (California Association for Health Services at Home (CAHSAH)CAHSAH)

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CA Home Care and CA Home Care and Hospice: Where We Hospice: Where We

Stand in 2009Stand in 2009California Association for Health California Association for Health

Services at Home (CAHSAH)Services at Home (CAHSAH)

March 23, 2009March 23, 2009


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What is Home Care?What is Home Care?

Provision of services and products in the Provision of services and products in the homehome

Broad definitionBroad definition Encompasses many different sectorsEncompasses many different sectors


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Home Care SpectrumHome Care Spectrum


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Services and ProgramsServices and Programs

Home health – Medicare and MedicaidHome health – Medicare and Medicaid Hospice – Medicare and MedicaidHospice – Medicare and Medicaid Shift Nursing and personal care – Shift Nursing and personal care –

MedicaidMedicaid Private DutyPrivate Duty


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Why Promote Home Care?Why Promote Home Care?

Cost-effectiveness vs. other settingsCost-effectiveness vs. other settings MedPAC, June 2005 Report to Congress reported MedPAC, June 2005 Report to Congress reported

that “in terms of Part A costs, episodes in an inpatient that “in terms of Part A costs, episodes in an inpatient rehab facility or SNF are much more costly for rehab facility or SNF are much more costly for Medicare than episodes of care among patients going Medicare than episodes of care among patients going home.”home.”

Medicaid waiversMedicaid waivers

Preferred by patients and familiesPreferred by patients and families Olmstead Decision (least restrictive Olmstead Decision (least restrictive

environment)environment)


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Sources of Payment forSources of Payment forHome Care, 2007Home Care, 2007

(billions)(billions)

MedicareMedicare $ 23.8$ 23.8

MedicaidMedicaid 20.520.5

Private PayPrivate Pay 14.714.7

TotalTotal $ 59.0$ 59.0

Source: CMS, National Health Expenditures, 2009


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Congressional Budget OfficeCongressional Budget OfficeProjected versus Actual ExpendituresProjected versus Actual Expenditures


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Reality of the Medicare Home Reality of the Medicare Home Health Benefit/Access to CareHealth Benefit/Access to Care

Medicare home health benefit has taken the Medicare home health benefit has taken the largest cut versus any other provider the past 10 largest cut versus any other provider the past 10 years, starting with the Balanced Budget Act of years, starting with the Balanced Budget Act of 19971997

Home Health share of Medicare spending has Home Health share of Medicare spending has dropped from 8.7 percent in 1997 to 3.1 percent dropped from 8.7 percent in 1997 to 3.1 percent todaytoday

Projected to decline to 2.6 percent of Medicare Projected to decline to 2.6 percent of Medicare by 2015by 2015


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Personal Health Care Personal Health Care Expenditures, 2007Expenditures, 2007

PercentPercent

Hospital CareHospital Care 37.137.1

Physician’s ServicesPhysician’s Services 25.525.5

Prescription DrugsPrescription Drugs 12.112.1

Nursing Home CareNursing Home Care 7.07.0

Dental ServicesDental Services 5.15.1

Other Personal Health CareOther Personal Health Care 3.53.5

DME and Other Medical ProductsDME and Other Medical Products 3.33.3

Other Professional ServicesOther Professional Services 3.33.3

Home CareHome Care 3.13.1

Source: CMS, National Health Expenditures, 2009


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Sector Growth, 1995-2005Sector Growth, 1995-2005

Nursing homes 263%Nursing homes 263% Physicians 214%Physicians 214% Medicare 84%Medicare 84% Hospitals 66%Hospitals 66% Home Health 45%Home Health 45%


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Medicare: Medicare: Prospective Payment System Prospective Payment System

(PPS)(PPS)

60 day episodes60 day episodes Payment adjusted by 153 HHRGsPayment adjusted by 153 HHRGs Episode exceptions (LUPAs, PEPs, Episode exceptions (LUPAs, PEPs,

outliers, etc)outliers, etc)


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Medicare Home Health Payment Medicare Home Health Payment ElementsElements

Base Rate – Base Rate – National 60-day Episode Payment National 60-day Episode Payment RateRate

Market Basket UpdateMarket Basket Update Case Mix Creep AdjustmentCase Mix Creep Adjustment Rural Add-on – Rural Add-on – five percent increase five percent increase

expired 12/31/06expired 12/31/06

Wage IndexWage Index


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Outlook for Home Care?Outlook for Home Care?

Concerns:Concerns: Years of Cuts Taken in Home HealthYears of Cuts Taken in Home Health Impact of President’s Budget Impact of President’s Budget Casemix Creep AdjustmentCasemix Creep Adjustment Loss of Rural Add OnLoss of Rural Add On


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Medicare Home Health Medicare Home Health Spending in California Spending in California

US Spending on Home Health = US Spending on Home Health = $13.9 $13.9 BillionBillion

California Spending on Home Health = California Spending on Home Health = $1.1 Billion$1.1 Billion

California comprises 7.8% of the Nation’s California comprises 7.8% of the Nation’s Current SpendingCurrent Spending

Source: NAHC EstimatesSource: NAHC Estimates


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Impact of the President’s Proposal Impact of the President’s Proposal on Home Health?on Home Health?

Reduces Home Health spending by $13.1 Reduces Home Health spending by $13.1 billion over the next five yearsbillion over the next five years By freezing the market basket over the next By freezing the market basket over the next

five years (2009-2013) five years (2009-2013) Casemix Creep Adjustment Casemix Creep Adjustment


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Budget Proposal Impact on CaliforniaBudget Proposal Impact on CaliforniaHome Health Medicare PaymentsHome Health Medicare Payments

FY 2010 Projected Losses for California: FY 2010 Projected Losses for California: $42.6 million$42.6 million

FY 2010-2014: $1.1 billionFY 2010-2014: $1.1 billion



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Why Home Health Needs Annual Why Home Health Needs Annual IncreasesIncreases

President Obama: “Now is the time to President Obama: “Now is the time to help families care for their aging parents help families care for their aging parents by enacting a real long-term care plan to by enacting a real long-term care plan to lower costs and guarantee all Americans lower costs and guarantee all Americans receive quality care in their later years.”receive quality care in their later years.”

Rising nursing salaries to compete with Rising nursing salaries to compete with hospitals and nursing homeshospitals and nursing homes

Cost of regulatory requirementsCost of regulatory requirements Rising cost of gasoline and insuranceRising cost of gasoline and insurance


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Special Needs of Rural AgenciesSpecial Needs of Rural Agencies

Why Rural Add on is critical:Why Rural Add on is critical: 24 of CAs 58 counties are rural24 of CAs 58 counties are rural 9 of these counties served by 2 or less 9 of these counties served by 2 or less

HHAsHHAs Shortage of personnelShortage of personnel Longer driving distancesLonger driving distances


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History of Rural Add OnHistory of Rural Add On

Rural add on was historically 10%Rural add on was historically 10% In FY 2003, the rural add on expiredIn FY 2003, the rural add on expired From April 1, 2004-March 31, 2004, it was re-From April 1, 2004-March 31, 2004, it was re-

instituted as 5% instituted as 5% No Add On: April 1, 2005 – December 31, No Add On: April 1, 2005 – December 31,

20052005 Effective January 1, 2006- December 31, Effective January 1, 2006- December 31,

2006 – 5% restored temporarily2006 – 5% restored temporarily Currently, there is no add-onCurrently, there is no add-on


2020

Add-On Counteracts Higher Costs, Add-On Counteracts Higher Costs, Negative MarginsNegative Margins

Rural agency costs 12-15% higherRural agency costs 12-15% higher Rural margins= -4.2% vs. urban 6.6%Rural margins= -4.2% vs. urban 6.6% Differential is 10.8%Differential is 10.8%


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What is Hospice?What is Hospice?

Individual’s prognosis is for a life Individual’s prognosis is for a life expectancy of 6 months or less if the expectancy of 6 months or less if the terminal illness runs its normal courseterminal illness runs its normal course

Care is focused on providing “comfort,” Care is focused on providing “comfort,” and not cureand not cure

Provided in Patients’ Home or Primary Provided in Patients’ Home or Primary Place of Residence Place of Residence


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Medicare Hospice Medicare Hospice Spending in CaliforniaSpending in California

US Spending on Hospice = US Spending on Hospice = $9.2 Billion$9.2 Billion California Spending on Hospice = California Spending on Hospice = $811 million$811 million California comprises 8.9% of the Nation’s California comprises 8.9% of the Nation’s

Current SpendingCurrent Spending



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Impact of the President’s Impact of the President’s Proposal on Hospice?Proposal on Hospice?

Budget Neutrality Adjustment Factor set to Budget Neutrality Adjustment Factor set to be reduced by 75% in 2010 and 100% in be reduced by 75% in 2010 and 100% in 20112011

Loss of BNAF FY 2010-2014 = $3.4 billionLoss of BNAF FY 2010-2014 = $3.4 billion


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Impact on CaliforniaImpact on CaliforniaHospice PaymentsHospice Payments

FY 2010 = $38 millionFY 2010 = $38 million FY 2011 = $50 millionFY 2011 = $50 million Total cuts FY 2010-2014 = $298 millionTotal cuts FY 2010-2014 = $298 million


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Hospice Needs Stable IncreasesHospice Needs Stable Increases

Subject to same cost factors as home Subject to same cost factors as home healthhealth

New CoPs and quality measures will add New CoPs and quality measures will add to costs to costs

Overwhelmingly cost-effective vs. heroic Overwhelmingly cost-effective vs. heroic treatmenttreatment


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Medicaid: Medicaid: Visit and Hourly Payment StructureVisit and Hourly Payment Structure

Medicaid Has Set “Rates”Medicaid Has Set “Rates”

““Rates” Set by State Legislature – Rates” Set by State Legislature – Hourly Nursing Rate: $29.41Hourly Nursing Rate: $29.41 Nursing Visit: $74.86 – One hour visitNursing Visit: $74.86 – One hour visit Last Rate Increase August 1, 2000Last Rate Increase August 1, 2000

California’s Match: 50/50 with FedsCalifornia’s Match: 50/50 with Feds


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Lack of Access to Medi-Cal Home Lack of Access to Medi-Cal Home Health Services in CaliforniaHealth Services in California

1994 State Plan Amendment (SPA) to Require 1994 State Plan Amendment (SPA) to Require Annual Review of Medi-Cal RatesAnnual Review of Medi-Cal Rates

CAHSAH vs. Department of Health ServicesCAHSAH vs. Department of Health Services Filed – April 2004Filed – April 2004 Trial Court Decision – September 14, 2005 Trial Court Decision – September 14, 2005 Court of Appeal Decision – March 15, 2007Court of Appeal Decision – March 15, 2007

2006 SPA to Remove HHA Annual Review2006 SPA to Remove HHA Annual Review


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CAHSAH conducted an Analysis of 2005 OSHPD DataCAHSAH conducted an Analysis of 2005 OSHPD Data -- Office of State Health Planning and Development Data (latest data available)-- Office of State Health Planning and Development Data (latest data available)

Only 5 percent of all visits and 7.5 percent of all payments are Medi-CalOnly 5 percent of all visits and 7.5 percent of all payments are Medi-Cal

82 percent of all home health agencies are eligible to provide Medi-Cal 82 percent of all home health agencies are eligible to provide Medi-Cal services; However:services; However:

40 percent provide NO Medi-Cal home health services40 percent provide NO Medi-Cal home health services 52 percent provide 75 visits or less for an entire year52 percent provide 75 visits or less for an entire year 3.9 percent or 31 agencies providing most Medi-Cal home health 3.9 percent or 31 agencies providing most Medi-Cal home health

services (5,000 or more visits per year)services (5,000 or more visits per year)


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19 California Counties have no or only one Medi-Cal home health 19 California Counties have no or only one Medi-Cal home health providerprovider Especially Acute for Northern and Rural CountiesEspecially Acute for Northern and Rural Counties

Remaining 39 Counties have a concentration of two to four Remaining 39 Counties have a concentration of two to four providers per county providing 80 percent of all services providers per county providing 80 percent of all services Includes Larger Counties, such as Alameda, Contra Costa, Fresno, Kern, Marin, Includes Larger Counties, such as Alameda, Contra Costa, Fresno, Kern, Marin,

Merced, Monterey, Orange County, Riverside, Sacramento, San Bernardino, San Merced, Monterey, Orange County, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Cruz, Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Cruz, Santa Clara, Sonoma, Stanislaus, Tulare and VenturaSanta Clara, Sonoma, Stanislaus, Tulare and Ventura

Los Angeles County has 8 agencies with two providing most of the servicesLos Angeles County has 8 agencies with two providing most of the services

Conclusion: Leaves very few safety net home and community based Conclusion: Leaves very few safety net home and community based providers in the California Countiesproviders in the California Counties


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HR 3582 (Woolsey)HR 3582 (Woolsey)

Would eliminate federal companion and Would eliminate federal companion and CA personal attendant exemptionsCA personal attendant exemptions

Would increase cost of a live-in from $192 Would increase cost of a live-in from $192 to $304 per day (58%)to $304 per day (58%)

Home care would no longer be affordableHome care would no longer be affordable


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Employee Free Choice ActEmployee Free Choice Act

Eliminates right to secret ballotEliminates right to secret ballot Eliminates federal supervision of union Eliminates federal supervision of union

electionselections Forces binding arbitration on both the Forces binding arbitration on both the

employer and the collective bargaining unitemployer and the collective bargaining unit


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What We NeedWhat We Need

Regular full annual updates for home Regular full annual updates for home health and hospicehealth and hospice

Permanent extension of rural add-onPermanent extension of rural add-on Elimination of Casemix Creep Adjustment Elimination of Casemix Creep Adjustment

and Hospice Budget Neutrality Adjustmentand Hospice Budget Neutrality Adjustment Oppose HR 3582 (Woolsey) and EFCAOppose HR 3582 (Woolsey) and EFCA


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More Information?More Information?

Contact California Association for Health Contact California Association for Health Services at Home (CAHSAH)Services at Home (CAHSAH)

http://www.cahsah.orghttp://www.cahsah.org 3780 Rosin Court, Suite 1903780 Rosin Court, Suite 190 Sacramento, CA 95834Sacramento, CA 95834 916-641-5795916-641-5795 [email protected]@cahsah.org [email protected]@cahsah.org

ca home care and hospice: where we stand in 2009

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