Partnership Urges Lawmakers to Consider Negative Impact of Cost-Sharing on Vulnerable Beneficiaries, Medicare Costs

Washington, DC — Home health leaders today cautioned lawmakers on Capitol Hill that a cost-sharing requirement in the Medicare home health benefit could potentially have negative effects on many of the nation’s 3.5 million home health beneficiaries and future Medicare costs.

The Partnership for Quality Home Healthcare – a coalition of home health providers dedicated to developing innovative reforms to improve the program integrity, quality, and efficiency of home healthcare for our nation’s seniors — strongly opposes the re-imposition of a cost-sharing requirement in the Medicare home health benefit. Congress repealed a Medicare home health copayment in 1972 because it was ineffective in reducing costs and was found to create “a financial burden to many elderly persons living on marginal incomes.” Congress chose to eliminate the copayment because it limited patient access to care and led to patients being served in more expensive facility-based settings.

“Increasing the burden on America’s seniors, particularly those who are most vulnerable, has proven to be counterproductive,” said Eric Berger, CEO of the Partnership. “In fact, Avalere Health estimates that the re-imposition of out-of-pocket costs on Medicare home health beneficiaries could have the opposite effect of what Congress intends, potentially costing Medicare and taxpayers billions in increased healthcare costs.”

A new analysis by Avalere Health finds that nearly 40 percent of home health users who are not dually-eligible for Medicaid nor have other supplemental insurance would likely be responsible for the full out-of-pocket cost associated with a cost-sharing requirement. Whereas an estimated 38 percent of all Medicare beneficiaries have an annual income below the federal poverty level (FPL), which equals $22,340 per year for a household of one, fully 73 percent of Medicare home health beneficiaries have this low-income status.

The analysis also finds the same low-income population is typically older, sicker and more likely to have severe disabilities than the Medicare beneficiary population as a whole. Eighty-six percent of home health patients are living with three or more chronic conditions, while 69 percent of all Medicare beneficiaries is that ill. Nearly 26 percent of home health beneficiaries are age 85 and older compared to 11.8 percent for all Medicare patients. These factors increase the risk that patients will forgo low-cost home-based care and instead seek care in facility settings. As a result, Avalere Health has found that Medicare could incur as much as $16.7 billion in additional costs in other settings over a decade if a home health copayment — which Congress repealed in 1972 — were re-imposed.

Instead of increasing out-of-pocket costs to seniors, the Partnership is urging Congress to advance targeted policy solutions that combat waste, fraud and abuse. Home health community leaders have put forth the “Skilled Home Health and Integrity Program Savings” (SHHIPS) proposal, which offers targeted solutions to stop the payment of aberrant claims before they occur, strengthen the claims review process, and improve conditions of participation standards. These reforms are based on outlier payment reform, which was successfully implemented in 2010 and is on track to achieve more than $11 billion in savings over a 10-year period.

“We encourage lawmakers to advance pro-patient solutions that achieve significant savings through program integrity reforms. These positive solutions strengthen the integrity of the Medicare program and deliver billions in savings without negatively impact seniors citizens, compliant providers, or taxpayers,” added Berger.

The Partnership is also a member of Fight Fraud First! — a coalition of groups representing millions of older Americans, persons with disabilities, minorities, veterans and healthcare providers founded to advance the principle that eliminating waste, fraud and abuse in the Medicare program should be prioritized over beneficiary cost increases and across-the-board cuts.