RINALDO. Thank you. And now our final witness, Mrs. Liven STATEMENT OF WINIFRED LIVENGOOD LIVENGOOD. I am Winifred Livengood, executive director of ome Health Agency Assembly, which is located here in PrinThis organization represents the 50 home health agencies li1 by New Jersey and certified to be medicare providers. They ve a long list of services which they give to patients in their under the medicare program. They are also the only home providers used by medicaid and Blue Cross of New Jersey. It nonor for New Jersey to have this field hearing, Mr. Rinaldo Mr. Smith, and we are pleased to be able to give this ony. ognition of the value of home health care has been increasing past few years. Controlled expansion of home care can assist ation in its cost containment efforts and can help insure conI provision of quality care. Home care reinforces and supplethe care provided by family members and friends and enges maximum independence of thought and functioning, as s preservation of human dignity. prudent use of home care should be stimulated, not inhibitany steps taken in 1983 and the future, to meet the national s. Proper allocation of additional human and financial rees is imperative for essential expansion of home care services et the need. Expansion of home care raises a number of critiblic policy issues. I will address some of these and the iments towards the realization of a national policy in home care following remarks. spective reimbursement. Reimbursement of hospital costs by rates, as a method of controlling hospital costs, is the most tant experiment in health care financing undertaken in the d States in recent years. With the probable use of DRG's as a etting base for the medicare program, it is important to exits effect in New Jersey. While recognizing the overriding tance of controlling hospital costs, it is also essential to keep nd that hospital care is one part of a total health-care system hat changes in hospital cost reimbursements may effect parts health system in unanticipated ways. are cap of $43, our av the home health pro the Federal proposa there is no provision New Jersey system. T for both hospitals a The DRG rate system, the medicare and t ey the all payers are disincentive to priva he introduction of the gnition among priva raged as a cost-effecti other private insure home care coverage tives such as 3-to-1 co care days. For the D y is gone, and home bursement to the hosp length of stay, and arge for the payor. Spokesmen for the se and despite their an reduce the total cos ey were not interest ith the DRG system in The impact of this on no home care insu alth coverage if a pro Effect on the patient his today. I hope to b that have been said in At the same time ho hat under DRG's, ear the hospital. There ha from home health ag harged from the hosp tion. There is current ut our agencies have revolving door syndr taken place. Home health percei stable position, the Home Health Assembly has observed that the DRG method nbursement has affected home health care in several imporreas which should be considered in making a full evaluation benefits of the system. nstituting the rate setting system in New Jersey, the State ed a medicare waiver. Under this waiver, the HCFA cost on hospital-based home health agencies were removed. This tted the hospital, under the chapter 83 regulations, to make ance for the cost of indigent care and for the spread of hospiministrative costs onto the home health department. s has produced allowable home health charges well above the A medicare rate; $80 per nursing visit in one hospital home agency as compared to the HCFA cap of $54. The average e in New Jersey's freestanding agencies, which have a HCFA JU, VU out the hospital setting have been spread onto average craige is qu2. in tituu, taptiisUD S. health providers as a whole, which is a mix of hosreestanding home health agencies, the large differle charges creates a noncompetitive position for d agency, and obviously it makes for more expen- care, if it is in a hospital-based agency. d that medicare not allow hospital administration d onto the home health departments and hospitalth agencies under the DRG or case mix reimburse l proposal for DRG rate setting covers only medio provision for nonreimbursible costs as there is in system. Thus costs for indigent or nonreimbursible ospitals and home health agencies remains unre e system, although the national program addresses are and that has its own set of problems, in New payers are under the DRG rates. This has operated e to private insurers for home care coverage. Prior tion of the DRG reimbursement, there was growing ong private insurers that home care should be encost-effective alternative to hospital care. Blue Cross ate insurers were encouraging utilization by includcoverage in their benefit packages and offering inas 3-to-1 conversion for home care days versus hospiFor the DRG's, the incentive to reduce the hospital nd home care becomes an add-on. The amount of reto the hospital for the DRG is the same, regardless of stay, and any home care costs are an additional payor. for the private insurance industry addressed this pite their conviction that expanded use of home care e total cost of an episode of illness, the insurers said t interested in expanding the home health benefits system in place. of this on both client and provider can mean reduced care insurance, and it is imperative to have home ge if a prospective rate is used for hospitals. he patient, there has been some previous testimony on hope to be able to clarify for you some of the things en said in the paper. he time hospital administrators were quick to perceive ORG's, early discharge produces financial benefits for There has been broad-based and dramatic testimony health agency directors that patients are being disn the hospital to home care in a more acutely ill condiis currently no data to document to the extent of this, ncies have cited some cases where the problem of the loor syndrome", that is, early hospital readmission has alth perceives that as long as a patient is in a medically ion, the care of the more acutely ill patient is not a lem for home health agencies and is accepted as a rational and t the present time we have no requirements for prospective re- here is no source of payment for continuing care after that 2 to very Congress going back to the 92d has gone on record in favor n adjustment in the priority of government funding which has pred placing medicare and medicaid patients in institutions. Dee the progress that has been made toward encouragement of he care, the primary impediment remains skilled nursing definis and home bound definitions under the present law. he bulk of the population have no insurance to pick up this distinued medical and home health care. We recommend reimsement for long term home care under medicare. We realize t the cost of such a program would require substantial sharing osts on the part of the client. We would support an up-front detible as the most straightforward and acceptable method of costring. ed progra The goals of such be achievemen de early detecti medical interven ance with health a f community re ring our healt greater utilizat and greater use bservations made are currently an independent and remain in Con County wh 23 years, the tur astically reduced. Summary, as w rect the thrust o and maintenan alth system, as A efore this. Through chronic are when really ne ced system, the nd the rate of grow I will also attach That Ms. Davis sai 4 budget. And I he time has come to consider longterm home health care as t of a health system. Nowhere is the fragmentation of the lth care system more damaging and more counterproductive to ional health goals than in medicare's artificial separation of onic care from acute care. Iedical advances in recent decades make people live long. We e been through that. I will not repeat that now. ut a health care system which reimburses only for acute care ses up important opportunities to stabilize condition and introe health promotion activities that would prevent decline and ppearance of the chronic condition. inally, I would like to put the last recommendation for health nitoring and maintenance. In addition to long term care for the erely disabled who are at home, we believe the health of those h less severe chronic disabilities could be maintained through ke up the time thi Mr. RINALDO. Yes Mrs. LIVENGOOD. and copayments and Mr. RINALDO. Tha Material submitt HHAA POS program under medicare of health maintenance and f such a program are the preservation of good health vement of maximum functional independence. They detection and early assessment, timely and appropritervention, self-care improvement and increased comhealth and drug and prescriptions. And more effective nity resources. Activities include health maintenance, ar health assessment, screening, referral to the physiutilization of other health providers besides the physiter use of community resources. s made by providers of health maintenance programs rrently being run in New Jersey indicate the clients endent longer. They have fewer incidents of acute illain in their residences until the end. In housing sites nty where these programs have been carried out for 8 the turnover rate in the housing complex has been duced. There has been no institutionalization. y, as we design a better system, we would, therefore, hrust of health funding, starting with health monitorintenance, that is your primary entrance into the n, as Anne said. By the way, we did not get together hronic care for known disabilities and finally to acute eally needed, we are convinced that under such a bal, the health of the Nation's elderly would improve of growth of medical care costs would decline. attach my submission of some details of my feelings of avis said this morning on the proposals of the 1983And I will make that a matter of record, but I will not ime this morning. DO. Yes. That will be included in the record. GOOD. They are quite detailed about waiver of liability ents and all of that. DO. Thank you, Mrs. Livengood. submitted by Mrs. Livengood follows:] HAA POSITIONS on Key Legislative/RegulaTORY ISSUES (By Winifred Livengood) budget cuts: We oppose the proposed Medicare budget cuts which he elderly to pay greater amounts to participate in Medicare (Part B to pay greater out-of-pocket costs (increased Part A and Part B cointrongly oppose the proposed repeal of the waiver of provider liability n protects providers who, acting in good faith, render services to indielieve to be covered by Medicare when the facts turn out to be other ce: We oppose the proposal requiring the elderly to pay a 20 percent durable medical equipment furnished by home health agencies of Medicare. Similarly, we oppose mandatory coinsurance in Medicaid. ave the government money but will actually result in increased costs. eorgia recently abandoned Medicaid coinsurance, finding it cost them $1.00 they collected. ng medicare coverage: The HHAA believes the government should ments which prevent greater utilization of home care. For example, e deletion or liberalization of the term "skilled nursing" which curhe number of beneficiaries who can qualify for home care under Medi |