The new tax law hasn’t passed yet—the Senate and the House still need to reconcile their disparate versions of the legislation—but odds are that we will have a bill very soon. And whatever compromise is reached is going to feature a major cut in the corporate tax rate, a big cut in the income tax rate for the wealthy, and modest or minimal reductions in the tax rate for the middle class, with a resulting whopping $1.5 trillion projected increase in the deficit over the next ten years. There’s only one way to compensate for that kind of deficit, and that’s cutting federal expenditures. And as Paul Ryan, Speaker of the House, acknowledged just this week, that’s exactly what he wants to do. “Frankly, it’s the health-care entitlements that are the big drivers of our debt,” he said in an interview. “We [will] spend more time on the health-care entitlements—because that’s really where the problem lies, fiscally speaking.”
Now I’m all in favor of reforms to the Medicare program. I’ve argued many times on this blog that Medicare is still too focused on acute care, on hospital-based care, and on technologically-intensive care, despite its recognition that chronic illness, in fact multiple chronic illness is what afflicts much of the older population. But Ryan et al aren’t talking about modifying Medicare; they are talking about slashing Medicare. I thought it might be a good idea to look at just what Medicare covers now, enabling us to better advocate for keeping what matters. I figured I’d start with a benefit about which there is widespread ignorance and much confusion, the home health benefit. It’s only a small slice of the Medicare pie—something like 3 percent, but when total Medicare expenditures top $632 billion, even 3 percent is far from trivial.
As luck would have it, the AARP Public Policy Institute just last month wrote a brief report called “Understanding Medicare’s Home Health Benefit.” It’s important to realize that this affects a great many people—3.5 million, in fact, as of 2015. And as is always the case, protestations about “socialized medicine” notwithstanding, Medicare doesn’t actually provide any services—it just certifies home health agencies as meeting federal standards and reimburses them for their services, in accordance with Congressionally mandated criteria. In fact, there are over 12,000 home health agencies in the U.S.
The services that Medicare authorizes under the Home Health benefit are intermittent. They include principally professional services, or what Medicare calls skilled care: nursing care, physical therapy, speech therapy, occupational therapy, and social work. They also pay for limited home health aide care and some durable medical equipment, supplies such as wheelchairs and walkers.
Not just anybody enrolled in Medicare qualifies for these services. To be eligible, you have to be homebound and a physician (it has to be an MD) has to certify that you’re homebound and that s/he has approved a “plan of care” for you that spells out what services you will receive and why you need them. “Homebound,” in turn, means that you cannot leave your home without “considerable and taxing effort” and you need the help of another person or specialized equipment to go anywhere. A couple of years ago, Medicare introduced the requirement for a face to face visit to certify eligibility. A nurse practitioner or physician assistant working with a physician can make the face to face visit, but only the MD can sign off on the certification. Certification must be renewed every sixty days but can, in principle, continue as long as the services are necessary for the individual to maintain his level of functioning or to improve.
Medicare has already invoked “re-balancing” to downwardly revise its payments for home care services. Another change under consideration include charging a co-pay of $150 or more if the home care service is initiated without a prior hospital stay. While this is meant to deter fraud and abuse, it sounds much like the notorious “three-day rule,” that says Medicare will only pay for a skilled nursing facility stay if it is preceded by a hospitalization of at least three days. The problem with that rule, as has been pointed out, is that far from assuring that patients don’t unnecessarily use SNF facilities, it promotes unnecessary use of the hospital as the only legitimate means to gain access to inpatient rehabilitative services! Similarly, if home physical therapy is what a patient needs, not hospital care with orthopedic consultation, MRIs, and other procedures, why should Medicare deprive patients of that option?
Other strategies for slashing the home care budget may well be adopted unless we are vigilant. So you better watch out, better do cry, the Grinch is coming to town.