• Medicare Home Health Co-Pays & LTC

    One detail of President Obama’s proposal released yesterday is the creation of a Medicare Home Health co-pay of $100 per episode if it includes more than 5 visits (p. 39).

    This would apply to new beneficiaries beginning in 2017. This proposal is consistent with a MedPAC recommendation to establish a per episode copayment. MedPAC noted that “beneficiaries without a prior hospitalization account for a rising share of episodes” and that “adding beneficiary cost sharing for home health care could be an additional measure to encourage appropriate use of home health services.”

    This is a tiny aspect of the overall package, and would reduce Medicare spending by $400 million over 10 years. However, it caught my eye because I think it is consistent with something that a Medicare official told me at a meeting a few years back: there is a strong institutional fear (at CMS) of any aspect of its benefit package becoming a “back door” long term care benefit.

    After expansion of Medicare home health in the early the 1990s, there has been a general move to medicalize the benefit and reduce its use for personal long term care. McCall et al. (2001) noted the changes to the home health benefit brought about by the Balanced Budget Act of 1997

    Eligibility for Medicare home health is limited to beneficiaries who are “homebound,” need “intermittent” skilled nursing or therapy services, and are under the care of a physician who prescribes their plan of care. A beneficiary needing only personal care does not qualify (emphasis mine)

    These changes greatly reduced the use of home health; according to MEDPAC, total Medicare home health spending in 1997 was $17.7 billion, fell to $8.5 billion in 2000, and was $18.9 billion in 2009 (p. 177 of March 2011 report).

    Further, I think that at least some of the discussion by MEDPAC of changes to the Medicare hospice benefit per diem payment and increased efforts to address very long lengths of hospice use for patients with non cancer diagnoses could be viewed in a similar light (such policies are not a part of the President’s proposal but remain a MEDPAC priority). From the MEDPAC March 2011 report (p. 267):

    …between 1998 and 2008, the number of hospice users with debility increased from just over 8,500 to nearly 107,000, and the number with either Alzheimer’s disease or non-Alzheimer’s dementia grew from about 28,000 to 174,000…

    It should be noted that outreach to patients with diagnoses other than cancer had been an earlier priority, but this success may feed worries that hospice is being inappropriately used for long term care.

    Long term care represents a tremendous burden to Medicare beneficiaries, and under our current system the responsibility for such care falls initially on individuals and families. The cost of informal caregiving (family members caring for loved ones) is enormous, and could be understood as individuals self insuring against needed long term care, but many choose this by default due to lack of options. Private long term care insurance is rare, and Medicaid stands as the default payer of nursing home care–the most expensive care setting we have.

    The question remains how will we insure long term care? Certainly not by repealing the CLASS provisions of the ACA and replacing them with nothing. As Howard Gleckman says

    Aging Baby Boomers and their families would all be far better off if congressional critics of CLASS sat down with the White House to design a national long-term care insurance program that does work.

    We could reduce the pressure for a “back door” LTC benefit by developing a coherent strategy for insuring the LTC needs of our aging population.

    Update: for clarity, the type of care CMS has tried to decrease in the Medicare home health benefit over time is custodial care (help bathing, dressing, cooking, shopping), based on the argument the benefit is for skilled care, such as wound care.

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    • I can appreciate why CMS doesn’t want the home health or hospice benefits to turn into ‘back-door’ LTC, at least for cost-control reasons. But as a retired CHHA/Hospice exec, I am troubled that MedPAC fails to distinguish between for-profit and non-profit agency performance when it looks at utilization and episode-cost data as a basis for making policy recommendations. That data suggests that the creep towards back-door LTC happens much more often at for-profit providers than it does at mission-driven NFP agencies. NFP agencies typically are trying to help families deal with the burdens of informal caregiving, while proprietaries are typically trying to make things better for agency owners and stockholders. Families need the help when they confront tough decisions under pressure of time (and guilt, frequently).

      • @BillNRoc
        If you read through the entirety of the hospice chapter of the March 2011 MEDPAC report that is linked in this post, there is a great deal of discussion focused on FP hospice providers. In fact, I worry that they are so focused on long stays that are associated with FP hospice they forget that the 25th percentile length of use has been 5 days for quite a while. Short length of use (quality concerns, forgone ability to reduce $) and long ones (worry about wasteful and/or fraudulent use) present problems and it is hard to devise a policy to address both.

    • Thanks Don. Other than CLASS, I cannot remember any attempt to address long term care by either party. Am I correct? While I have read a fair bit on health care in other countries, this is one area that does not get covered well. Any idea what most of the OECD countries do for this coverage.

      Steve

      • @steve
        there have been tax credits for LTC insurance, especially in some states. I think the effects of these have been fairly minimal, but I don’t have an evaluation handy. I was talking with some folks at the Bipartisan Policy Center about this and they haven’t addressed this topic (long term care insurance) which shows that there is relatively little attention paid. I think there should be some common ground between left and right in policy terms on LTC. Maybe I will write about that soon.
        As far as OECD, the most interesting nations are Germany and Japan. Both had major efforts in late ’90s early ’00s to move toward social insurance, but with different tacks. Germany allows ‘cash out’ option whereby family caregivers can be paid, but in Japan it was an explicit effort to create a formal sector to take pressure off of families (women; it was called the ‘daughter in law bill’ when debated). I will right about this, but can’t get to it this week.