Q&A with: Home Care Association Executive Director Susan Young
Q. Whom does the Home Care Association of New Hampshire represent? A. Our membership is licensed providers of home health services in New Hampshire. Most people identify us by the Visiting Nurse Association agencies. That is a large portion of our membership. But we also represent proprietary home health services. Basically, the requirement to be a member of our association is that you must licensed by the state of New Hampshire to deliver home health services. Q. There’s a pretty broad range of services under the aegis of home health care, isn’t there? A. Yes. I think the public is hearing a lot about home health care as an alternative to nursing home care or long-term, chronic care. It ranges from skilled nursing, therapies, acute care kinds of services in the home to long-term or chronic care and supportive services that includes home health aides, homemaker services and companionship services. In New Hampshire, most hospice services are also provided in the home by the VNA. The majority of home health care is actually short-term, acute care. For example, someone’s coming home from the hospital with a broken hip and requires some physical therapy at home, some assistance with activities of daily living. Another typical case might be someone with congestive heart failure or diabetes, but is not well managed. There is also pediatric home care. For instance, an infant may be born with serious difficulties or a premature infant that may be discharged on a ventilator. But that kind of care is very specialized. Home health care might help with some chronic conditions, but the concept is to make the client able to manage their own care. It’s about keeping people out of institutions, getting them out of institutions and maintaining their independence, and maintaining them in a healthy and safe environment. Q. That’s a pretty broad scope. A. Our client agencies report to me annually how many clients they serve, how many visits they provide. For 2005, more than 46,000 people in New Hampshire received home care services. They delivered over 1 million home visits. And they traveled — and this just blows my mind — over 10 million miles to deliver those services. Q. How has the high cost of gas affected the industry here? A. That has been a huge, huge impact on home health agencies. Some agencies have said their transportation bill has gone from something like $200,000 to $400,000. Every agency reimburses for travel to some extent. A lot, however, do not pay the IRS rate, they pay somewhat less than that. Some agency boards have since adopted a policy that they would pay whatever the IRS level is. So, when the IRS went from 40 cents to 48 cents, that’s like a 20 percent increase for that line item — with no more money from any of your payers. But the alternative is that you wouldn’t have anybody to go on visits. There was a story last fall that some nurses had to leave the job because it was just too expensive. And more so than even nurses and therapists, are the aides, whose salaries are so much less. The average wage for a nursing assistant I think is around $11.50 an hour. So, some workers are leaving the industry because of the high cost of gas. Q. With hospitals and insurers relying more and more on at-home care for patients, the demand for home health services is increasing, yet funds to support agencies have not. Why? A. The state, under the Medicaid program, does purchase both acute and long-term care services. Medicare is the largest payer of home health services by far, but they don’t cover chronic care. Generally, it covers shorter term care. By shorter term, I mean three weeks, eight weeks, 12 weeks. Medicaid funding has lagged behind the cost for years. I heard that Medicaid pays 60 percent of cost. The one question is: Why would any business deliver a service if you’re not even going to break even much less make a positive margin? The nature of health is that everyone accepts that there is going to be cost-shifting. I think we’re seeing the tolerance of that diminishing, though. Medicare does not want to be picking up the tab for Medicaid. At the federal level, the pressure to reduce Medicare spending means that there’s not going to be the kind of margin in Medicare that has allowed home care agencies to continue to take care of Medicaid patients. The private market likes to pay on a per visit basis vs. an episode of care [visits and services stemming from a single incident, such as a hospital admission]. They do a lot of pre-authorization. Some private insurers are very poor payers regardless of any state law about prompt payment. They will declare that a claim in not a clean claim. Some agencies have told me they have to bill three times for a single visit and go for administrative rigamarole to get the next visit approved. The administrative costs for those visits are very high. It’s increasingly difficult for the nonprofit agencies to maintain access in their communities for everyone, for the uninsured and the Medicaid folks, when the places that they’ve shifted cost to don’t exist anymore. Q. At the same time the state wants to increase community-based care. A. The state is talking about increasing use of home- and community-based care rather than nursing homes because it’s cheaper. But it’s not as cheap as the state would have you believe. They’re paying 50 cents on the dollar — it’s what they’re paying; it’s not what the cost is. When you listen to quotes from various people, the state is saying that home care typically costs about $13,000 a year vs. $40,000 to $45,000 a year in a nursing home. The $13,000 price is probably a lot closer to $18,000 if you pay cost. Last year [the state] began to see some evidence of problems in getting access to home health services, just in a couple of areas, in some of the rural areas. There are agencies in non-rural areas that are unable to take unlimited numbers of Medicaid patients anymore because they cannot jeopardize the solvency of the agency as a whole. But you have other agencies in the south. If you can’t get services from one, you should be able to get them from somebody else. Q. Did the passage of HB 1710 help? A. That piece of legislation was intended to help several sectors, but in the final analysis, home health was the only area that was funded in the bill. The bill included some dollars to carry forward through fiscal ’07 a rate increase that was put in place this year, so rates wouldn’t actually have to decrease. That was an error in last year’s budget; they put money in the budget to fund the long-term care — the Medicaid waiver part of home care — but sort of forgot that quite a bit of home care is delivered as an acute care service. So they increased those rates part way through the year, so the rates would be the same. They also added dollars to carry forward a 4.6 percent increase in [fiscal year] 2007, the year starting July 1. There were no rate increases from 1999 to 2006 at a time when there were rapid expansion of cost. It is our understanding that the intent was to use the dollars as a pool of dollars to increase home care reimbursement. In our discussions with the department [state Department of Health and Human Services] in the last few weeks, they said, “Well, we really consider home health to be not just home health services, but also unlicensed personal care services under the waiver program, adult day care, some medical transportation.” So, there are fewer dollars, really, available for the actual “medical” type of care. What we’ve learned through our research is that the most underpaid type of services are those shorter visits of nurses and home health aides. There’s more overhead in those shorter, 45-minute, 1 hour, types of services. We’re still trying to convince the department that there’s different levels of care and that there’s a different way to look at this. Our latest numbers indicate that nursing visits of less than 2 hours are paid at 58 cents on the dollar. A shorter aide visit is paid at about 39 cents on the dollar. So a 4.6 percent increase, while appreciated, is not going to close that gap. That’s really grim. Agencies are mission-driven, whether they’re for-profit or not-for-profit. They’re about providing good care and support to people and the community. They’re not happy about turning people away. They’re not going to have any choice at some point. It’s a challenge. It’ll be an even greater challenge with the Medicaid program. While it’s not the major payer, I always say it’s the major opportunity to lose money. Q. It sounds like funding is the top issue impacting home-health care in New Hampshire. A. The biggest thing is money. Just this year, agencies in the four southern counties got hit by a huge Medicare cut. Over the next two years, Medicare will reduce reimbursement to those agencies by $4 million. Basically, Medicare rates are set by national average costs, then are adjusted locally according to a wage index. For the past decade, the four southern counties — Merrimack, Stafford, Rockingham and Hillsborough -- had been considered part of the Boston wage index area. After the 2000 Census, they decided some population shifts had occurred and carved out those counties from the Boston area. Subsequently, they lost that higher wage area. Now they’re going to be reimbursed at about 8 percent less. For agencies, especially large agencies like VNA of Manchester, that’s like $400,000 a year less. The second major issue we’re facing is workforce. We’re all competing for nurses. The health-care workforce is in very high demand, so you’re competing with hospitals and others for workers. And a couple of agencies say they’re competing for paraprofessionals as well.