BARRIERS TO HEALTH CARE FOR OLDER AMERICANS TUESDAY, JULY 9, 1974 U.S. SENATE, SUBCOMMITTEE ON HEALTH OF THE ELDERLY OF THE SPECIAL COMMITTEE ON AGING, The subcommittee met, pursuant to notice, at 10 a.m., in room 1318, Dirksen Senate Office Building. Hon. Edmund S. Muskie, chairman, presiding. Present: Senators Muskie and Percy. Also present: William E. Oriol, staff director; Elizabeth Heidbreder, professional staff member; John Guy Miller, minority staff director; Margaret Fayé minority professional staff member; Gerald Strickler, printing assistant; Yvonne McCoy, assistant chief clerk; and Beth Ming, clerk. OPENING STATEMENT BY SENATOR EDMUND S. MUSKIE, CHAIRMAN Senator MUSKIE. The subcommittee will come to order. A year ago, this subcommittee held 2 days of hearings on home health care for the elderly. Witnesses representing such diverse groups as the Gray Panthers and the American Medical Association endorsed in-home health services. Yet it was also made clear that home health under the Medicare program receives less than 1 percent of Medicare expenditures. Payments had, in fact, declined since 1970. Home health agencies were in financial trouble. These figures were disturbing because they indicated that home health benefits under Medicare were not serving their purpose. And as a consequence, some patients were institutionalized unnecessarily. 1 And, worst of all, some sick patients were going without needed care. Today, the General Accounting Office is releasing a report 1 on home health benefits under both Medicare and Medicaid. The report further documents the underutilization of home health. In 11 States which it surveyed, GAO found that from 1968 to 1971: -The number of home visits to Medicare patients decreased 42 percent. -The number of nurses in home health programs and home health aides decreased by 41 and 49 percent. The report shows the facts were worse than we thought. 1 See appendix 1, p. 1449. The report says that one of the reasons for this decline was the varying interpretation of the skilled nursing requirement in the law by the Social Security Administration, the fiscal intermediaries, and the home health agencies. Furthermore, patients and physicians have been confused. Physicians recommended home health care; the Medicare claim forms showed entitlement to home health visits; yet the intermediaries denied payments. The Social Security Administration has commented that it considers the time covered by the report an "educational" period. "Educational" seems hardly the right word for patients who were denied care, or for agencies who had their staffs reduced and faced financial ruin. The situation is not much better today, although reimbursements have stopped declining. The mail which I receive still tells of needed care being denied to the elderly, and of agencies struggling to somehow meet the need. S. 2690 WOULD LIBERALIZE RESTRICTIONS Legislation which I have introduced, S. 2690, would help home. health under Medicare realize its potential by liberalizing current statutory restrictions on home health benefits-notably by lifting the requirement for skilled nursing care. It would allow Medicare to provide home health services that more nearly meet the needs of our aged population rather than to be conditioned by a requirement that is not only stringent but confusing and subject to widely varying interpretations. The GAO report also analyzes home health care under Medicaid, and concludes that its potential is not being fully realized in the State programs. States are allowed to provide preventive, skilled, and nonskilled care in the Medicaid home health benefit. Unlike Medicare, there is no requirement for skilled nursing care, speech, or physical therapy before patients can become eligible for home care. But the States surveyed by GAO have generally not taken advantage of this flexibility. Representatives from the General Accounting Office who are here today will be commenting in further detail on the report. We also will be hearing from the American Geriatric Society and the American Public Health Association on home health care and day care. Spokesmen for the associations will be commenting on these alternatives, particularly as they relate to the long-term care component of national health insurance. I am also pleased to welcome again Thomas Tierney, Director of the Bureau of Health Insurance, Social Security Administration, who was present at our home health hearings last year and at our hearing 2 weeks ago when we examined a difficulty in interpreting the Medicare law by an intermediary. He has, I understand, a brief statement and will be available for questions. I hope our hearing today will not only give us an opportunity to learn more about the defects of home health care under Medicare in the past, but also how the administration of the program, and the basic Medicare law, can be improved to allow more effective use of home health and other alternatives to institutionalization. Our first witness today is Gregory J. Ahart, Director of the Manpower and Welfare Division of the General Accounting Office. STATEMENT OF GREGORY J. AHART, DIRECTOR, MANPOWER AND WELFARE DIVISION, GENERAL ACCOUNTING OFFICE; ACCOMPANIED BY RONALD F. LAUVE, ASSISTANT DIRECTOR, AND ALAN S. ZIPP, SUPERVISORY AUDITOR Mr. AHART. Mr. Chairman and members of the subcommittee, I am pleased to appear here today to discuss the results of our review of home health care benefits under Medicare and Medicaid. During our review, we visited four States-California, Florida, Massachusetts, and Michigan-and obtained information through questionnaires from 11 additional States. Although home health care benefits are provided under both Medicare and Medicaid, the philosophies, coverages, and methods of administration differ. Home health care benefits under Medicare, which is administered by the Social Security Administration-SSÁ-are, by law, skilledcare oriented. They were not designed to provide coverage for care involving only help with activities of daily living. To be eligible for coverage for home health care under Medicare, a person must be confined to his residence, be under the care of a physician, and need part-time or intermittent skilled nursing service and/ or physical or speech therapy. The need for such care must be prescribed by a physician. To qualify for benefits under hospital insurance-part A, a person must have been in a hospital for at least 3 consecutive days prior to entry into home care. The care provided must be for the condition for which the person was hospitalized and must be provided within the year following hospitalization or a stay in a skilled nursing home following such hospitalization. Coverage is limited to 100 visits per benefit period. A person may have more than 1 benefit period and thereby receive more than 100 visits in a single year. A person may qualify for home health benefits under part B without prior hospitalization provided certain conditions are met. Visits under part B are limited to 100 in any 1 calendar year. SSA has contracted with intermediaries to assist in administering home health care benefits. Medicaid, which is a Federal-State program, is administered at the Federal level by HEW's Social and Rehabilitation Service. Primary responsibility for its operation is at the State level. Home health care became a required service under Medicaid effective July 1, 1970. Under Medicaid, in contrast to Medicare, a person can be eligible for home health care benefits without requiring skilled nursing care or physical or speech therapy. Nor does an individual need prior hospitalization to be eligible for Medicaid benefits. Much attention has been given to the need for developing alternatives to institutional care. Various studies have been made that support the position that home health care, in some instances, provides a less expensive and more effective alternative. As you know, some of these studies were prepared for the Senate Special Committee on Aging. Other studies, which have focused on the early transfer of patients from hospitals to home care programs, have pointed out that home health care can be considerably less expensive than care in a hospital or skilled nursing facility. Studies in this respect have been done by the Rochester, N.Y., Home Care Association and the Denver, Colo., Department of Health and Hospitals. Also, HEW has funded projects to study alternatives to institutional care. In addition, the Social Security Amendments of 1972 authorize the Secretary of HEW, either directly or through grants and contracts, to conduct experiments and demonstration projects to determine whether coverage of intermediate care facilities' services and homemaker services would provide suitable alternatives to benefits presently provided under Medicare. On June 28, 1974, HEW awarded six contracts for demonstration projects under this section of the law. THE RECORD ON MEDICARE Home health coverage under Medicare experienced some significant problems in its early stages. Some problems have been alleviated but others continue to diminish its overall effectiveness. During the period covered by our fieldwork a decline in home health care activities under Medicare was occurring. In fiscal year 1970, the peak year for expenditures for home health benefits under Medicare, SSA expended about $115 million for such benefits. By fiscal year 1973, the amount had increased to $75 million. Further, a summary of 65 responses to questionnaires which we sent to home health agencies in 11 States showed that from 1968 to 1971: -Reimbursements from Medicare for home health services provided decreased 47 percent. -The number of home visits to Medicare patients decreased 42 percent. -The number of nurses and home health aides on home health agencies' staffs decreased by 41 and 49 percent, respectively. I would like to discuss briefly some of the factors that we believe contributed to these circumstances. First, in the initial stage of Medicare, considerable confusion existed as to what care was covered under home health benefits. As a result, noncovered care was apparently paid for from inception of the program until about August 1969. At that time, in an attempt to restore the statutory integrity of the home health benefits program, SSA issued guidelines to intermediaries to clarify the services covered. These guidelines, upon implementation by the intermediaries, resulted in numerous denials of claims and caused considerable concern to home health agencies and patients. In May 1971, SSA encouraged intermediaries to better explain to providers the reasons for denying claims. Despite SSA's efforts, home health agencies continued to disagree with intermediaries, and claims for care which home health agencies considered skilled were denied as nonskilled. Officials of some home health agencies told us at the time of our fieldwork that the application of the definition of skilled nursing care continued to be a problem. SSA officials acknowledged that prior to August 1969 the supervision of intermediary adjudication of home health claims was insufficient. SSA officials told us that they now view the period from 1969 to 1971 as an educational period within the home health field. A second factor is that Medicare is oriented, by law, to the need for skilled care and does not independently thereof cover home health services considered nonskilled. Determination as to whether skilled care is required is sometimes complicated. Preventive care is another area not covered under Medicare law. A third factor involved differences in screening guidelines used by intermediaries to assist home health agencies in applying safeguards against such unnecessary utilization of services. We compared service limits by three intermediaries located in three States for five diagnoses or illnesses, and found that the screening guidelines varied considerably as to the number of visits allowed and the period of coverage. Fourth, information provided to beneficiaries on allowable home health benefits did not always clearly spell out the limitations of the benefits. Representatives of several home health agencies informed us that beneficiaries were confused regarding the coverage and limitations of Medicare home health care benefits. A problem that often occurred was that after each claim was processed, the patient was mailed a form by SSA which showed how many visits he had received and the number of remaining visits he could receive. Beneficiaries often assumed that they were entitled to all the additional visits. However, the number of visits covered under Medicare is based on whether the patient continues to need skilled care and the limitations imposed by intermediaries, not necessarily the remaining visits shown on the form sent by SSA to the beneficiary. This often confused beneficiaries in that their physicians recommended home health care and the claim forms indicated they were entitled to additional visits, yet the intermediaries denied payment. Fifth, even though physician and hospital involvement is essential to the success of home health care, physician involvement has been limited and hospitals have not always encouraged the effective use of home health care. Physician involvement has been limited because some physicians do not have a thorough understanding of Medicare home health benefits; physicians believe there is no incentive for them to refer their patients to home health care because they are not paid for additional work incidental to maintaining patients in home health programs such as preparing treatment plans and recertifications; and there is potential for conflict between physicians and intermediaries because intermediaries have authority to assist in applying safeguards against unnecessary utilization of services. This means that, even though a physician prescribes care and certifies that it is needed, a claim based on such care can be denied by the intermediary. |