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It is difficult in the very busy lives of home care clinicians to always be aware of what is happening in Washington, DC. However, even if home care clinicians were to watch every news program about the new Medicare legislation (the former Medicare Prescription Drug, Improvement and Modernization Act of 2003 (P.L. 108-173), they would still not know how this massive 678-page law could potentially affect the care they provide and the patients they serve.


News coverage has focused primarily on the new "prescription drug benefit" and on how much the Republicans and Democrats disagree on whether this new law will actually help Medicare beneficiaries. Yet, deep within the 678 pages of the new Medicare law are changes to the Medicare program that will have a profound effect on home healthcare for years to come.


From the strong incentives to entice both private insurance plans and beneficiaries to join the Medicare managed care market to the nitty-gritty details of the new chronic disease management program, the legislation presents huge challenges and opportunities for home health agencies, hospices, clinicians, and beneficiaries. Below are several of the most frequently asked questions from VNAs and their patients about the new Medicare law.


Will Medicare patients be hurt by the legislation's 3-year cut to home care providers' reimbursement inflation updates?


The reduction (2.4% over 3 years) will exacerbate the difficulty that home care agencies are experiencing in recruiting and retaining nurses and home health aides, further diminishing their ability to admit patients for necessary medical care. Already, home health agencies have begun turning patients away because they simply do not have sufficient clinical staff to meet the demand for services. This cut, which follows a 6.9% cut that occurred in 2003, will make it more difficult for physicians and hospitals to find home health services for their patients.


Who will be helped by the "homebound demonstration aspect" of this law?


A total of 15,000 individuals in three states who have severe and permanently disabling conditions will be exempt from the current "homebound" restriction as part of the demonstration project funded under this law. They will be able to leave their homes at any time for any duration or purpose without losing their life-sustaining home health services during the 2-year demonstration.


The VNAA assisted David Jayne, the founder of the National Coalition to Amend the Homebound Restriction, in his mission to reform the home-bound requirement and change the outdated current policy, which was intended to apply to acute care situations. Since 1965, the Medicare home health benefit has evolved to cover more long-term chronic conditions, yet the homebound requirement has largely not kept pace with this trend and technologies that permit greater freedom despite severely disabling conditions.


What will be the general effect of the new prescription drug benefit on home care patients?


The new drug benefit will unquestionably increase access to prescription drugs for a significant portion of the Medicare population, particularly low-income beneficiaries ineligible for Medicaid but eligible for subsidized coverage, as well as those with exorbitant prescription drug expenses.


These patients may ultimately be better able to comply with treatment at least until they reach the time when prescription drug costs exceed $2,250. At that point, coverage for any prescription drug ends until out-of-pocket expenditures reach $3,600.


Patients whose fixed income is not low enough to qualify for the subsidies (e.g., reduced premiums, coinsurance, deductibles) may be unable to afford the new plan.


Additionally, certain seniors who currently have ample prescription drug coverage through their former employer will have their coverage reduced due to the availability of the more limited Medicare Drug benefit.


Because Medicare will now cover prescription drug costs for Medicaid recipients, dually eligible patients (those with both Medicare and Medicaid coverage) in states that had better coverage under Medicaid may see reduced benefits as well.


The "winners" and "losers" under the new benefit largely reflect the news coverage and mixed reactions" by the public in general.


How might privatization of Medicare affect beneficiaries' access to home healthcare?


P.L. 108-173 provides powerful financial incentives to grow private "Medicare Advantage" plans, which seem strong enough to significantly increase the availability of private Medicare plans and enrollment in such plans. Unfortunately, Medicare managed care plans have, in general, offered less access to home healthcare than traditional Medicare. Beneficiaries may unwittingly gravitate to private plans that offer attractive coverage for current needs at the expense of adequate coverage for unexpected needs.


There lies the challenge.


However, the silver lining can be found in the cost savings that Medicare managed care plans will be seeking and those cost savings are inherent in home- and community-based care management models. It is the home care industry's burden to convince private plans that they would be wise to incorporate such models into their benefit packages.


In order to access a more comprehensive analysis of the new Medicare law, VNAA created a section-by-section summary of the most relevant components of the legislation. Members and non members can access this summary and related news by visiting and clicking on "New Medicare Law Resource Center" for more information.


Look for Part 2 of this feature in the June 2004 issue.


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