Thus for all five centers, increased state support is a primary factor in their ability to continue to operate their program. These five centers are located in five different states: Massachusetts New York Pennsylvania Colorado Michigan The cut off in federal funding is reported by these centers to be having no effect on the level of services they will provide in the community. CENTERS UNCERTAIN OF THEIR FUTURE FUNDING Two centers were unable to state whether or not they would be in financial difficulty as a result of termination in their federal staffing grant. Both centers were hoping for increases in support from state funds and other sources. These centers had grants running out within a few months of the survey date, for the following amounts: Grant runs out: February 1975_ Funds will be replaced by: Amount of last year's grant award $115, 529 65,000 Uncertain hopes for increases in state funding, has implemented new fee schedule and hopes for improved fee collections and third party reimbursements. (However, after repeated efforts the center has found it impossible to obtain Medicaid and Medicare)-1 center. Hopes for increases in state and local government funds, and intends to increase fees-1 center. These two centers are located in Michigan and North Dakota. One of these centers reports that it expects to cut some services, and may lose one or two staff people. The funding picture for the other center is too uncertain for estimates of cut backs. CENTERS FORCED TO CUT SERVICES Eleven centers (61% of respondents) report that without further federal aid (which is not now available to them) they will be forced to reduce services, in some cases very substantially. Many of these centers have already received their final payment through the federal staffing grant program and thus these cuts are not hypothetical, they are already being implemented. Others will be implemented shortly. Amount of last year's grant award $200,000 220, 600 600, 000 257, 933 50, 680 December 1974_. January 1975_ July 1975____ 135, 000 203,000 58, 925 600, 000 121, 000 442, 547 While two of the centers had found no alternative source of funding, the remaining 9 centers intended to replace part of their lost federal funding through the following sources: Funds will be replaced by: State government_-. Local government.. Increased fee collections_. Increased collections of 3d party payments Private contributions__ No one--- Number of centers citing this source1 536412 1 These figures represent the number of centers which expect to collect funds from this source; some centers report they will collect funds from more than one such source and hence there are some duplications in these figures. 2 Computer billing system for one center will pick up about $60,000-$90,000 per annum that had previously been "overlooked," The funds which these centers have been able to raise from other sources will generally replace less than half of the amount of federal dollars lost. However, three centers were unable at this time to accurately estimate what percentage of the federal grant would be replaced by these other funds: Number of centers As a result of the cut back in funding, most centers report their services will be substantially reduced: Generally, the cutbacks in services will effect almost all aspects of the centers' programs. However, the degree of cut back in each service appears to differ quite substantially, as alternative funding for certain services (such as outpatient, consultation and education, and emergency services) are particularly hard to obtain. The number of centers reporting some cutbacks in various services is shown below (note this table does not indicate the degree to which each service would be reduced): The following chart shows the degree to which each of these service areas will be reduced by these centers. The service to be hardest hit appears to be consultation and education with two centers reporting complete elimination of these preventive services. Many centers report most of their services will be cut back to provide care only for those who can pay. The result of this policy will be discrimination against outpatient care and partial hospitalization, since most third party payment mechanisms (including private insurance policies and federal Medicaid and Medicare programs) emphasize inpatient care. This is reflected in the estimates of cutbacks in outpatient and partial hospitalization services. Nonetheless, cutbacks in inpatient services are expected to be quite substantial in some centers. Emergency services appear to be hit hard too, and here again emphasis will be placed on the patient's ability to pay, or his third party insurance coverage. Fewer centers report cutbacks in half-way house and specialized programs: probably a reflection of the fact that these services are not provided by all CMHCs. In the area of special programs many centers indicated they will not need to cut back these services because of alternative federal funding obtained through Part F of the CMHC Act (for children's programs), and alcoholism and drug abuse funds obtained through Parts C & D of the CMHC Act and through other legislation. However, special programs for the elderly-which are rarely offered in centers and which cannot be funded through other sources-will be cut entirely by one center. Finally two centers report they will be able to absorb some of the reduction in federal funds by reducing their administrative and secretarial staff. REDUCTIONS IN SERVICES CAUSED BY CUT OFFS IN FEDERAL FUNDING Outpatient Services-8 centers report cutbacks, as follows: 1. 80 patient reduction per month 2. Will cut patient load; be unable to meet all needs 3. 3,000 sessions (per annum); 3 staff positions to be cut 4. Reduce patient load to those who can pay 5. Cut staff; reduction in patients 6. Raise fees substantially and effectively squeeze out lower and middle income group. Need to lay off 30-40% of staff 7. Staff cuts 8. Staff cuts and reduction in patients served Consultation and Education Services-6 centers report cutbacks as follows: 1. All activity eliminated 2. 1,000 hours C&E work cut 3. Delete service 4. Raise fees substantially and effectively squeeze out lower and middle income group. Need to lay off 30-40% of staff 5. Must reduce 6. Staff cuts Inpatient Services-7 centers report cutbacks as follows: 1. Will only be available on referral to private psychiatrists 2. 2,000 days of adult and adolescent hospitalization eliminated 8. Will limit to those who can pay 4. Staff cuts and reduction in patients served 5. Raise fees substantially and effectively squeeze out lower and middle income group; need to lay off 30-40% of staff 6. Will not be able to continue 7. Staff cuts Emergency Services, Crisis Intervention Teams, etc.-6 centers report cutbacks, as follows: 1. Will eliminate walk-in emergency service 2. 1,400 patient visits (children and adults) will have to be cut 3. Will be limited to those who can pay 4. Raise fees substantially and effectively squeeze out lower and middle income groups. Need to lay off 30-40% of staff 5. Very little emergency service will be provided 6. Staff cuts Partial Hospitalization-8 centers report cutbacks, as follows: 1. Budget reduced; program moved to less desirable quarters 2. Reduce staff by about one-third 3. 850 patient days (children) and 750 patient days (adult) cut 4. 1,500 sessions of day treatment and two staff members to be cut 5. Limited to those who can pay 6. Raise fees substantially and effectively squeeze out lower and middle income groups. Need to lay off 30-40% of staff 7. Will cut staff and patient load 8. Staff cuts and reduction in patients served Half-Way House Service-One center reports cutbacks, as follows: 1. Raise fees substantially and effectively squeeze out lower and middle income groups. Need to lay off 30-40% of staff Special programs-5 centers report cutbacks in special services for children, elderly, Alcoholics and/or Drug Addicts, as follows: Children's Programs: 1. Support will be reduced and may result in smaller enrollment in special school for emotionally disturbed children. 2. 500 hours (including C&E for school and probation department and cutbacks in partial hospitalization) 3. 1,000 day treatment and 2 staff members to be cut from children and adolescent service Programs for Elderly: 1. Program will be eliminated. Programs for Alcoholics: 1. Cut back of 250 hours of consultation services. Programs for Drug Abusers: 1. 250 hours of consultation cutback Administration and Secretarial Support-2 centers report cutbacks as follows: 1. Will eliminate many positions here (50%) 2. Will cut staff Program Evaluation-1 center reports cutbacks, as follows: 1. 1,000 hours of evaluation time cut Financial Distress Grants: Ten of the eleven centers in distress reported that they would apply for federal financial distress grants, were these to become available. The amounts which the centers feel they need for their programs are shown below (note, these are not the amounts which would be awarded under the proposed legislation-which restricts these grants to an amount equal to 90% of the percentage of costs for which the center was eligible in the last year of its staffing grant-but are the amounts the centers feel they would need to continue their current programs). The amounts required vary from a modest $40,000 up to $600,000. By and large these amounts are higher than the last federal grant awarded, reflecting increases in health care costs. $240,000 2,840, 000 1 This center does not intend to apply for a financial distress grant (see below). The eleven centers in financial distress are located in eight states; two of these are states which will provide other centers with sufficient funding to continue to operate their program without further federal aid (New York and Pennsylvania): Arkansas New York Texas One center reported it will not apply for financial distress because: "Our efforts to meet federal demands forced us into expansion beyond our ability to function. We will not repeat this mistake." This comment highlights two issues which should be carefully considered by policy makers. First, although federal funds for CMHCs may represent only a relatively small proportion of total spending (approximately one-third nationwide), these dollars are crucially important to the programs in that they ensure comprehensive services and adherence to national standards which might not otherwise be applied. Secondly, if federal grants are set at too low a level, there is a serious danger of programs electing not to apply for federal funding because the requirements are too stiff and the dollars too low. Apparently, this one center feels the dollars in the financial distress grant are not enough to enable it to meet the federal requirements. Hopefully, this center is in a distinct minority, but this is something which needs to be watched over the next few years (assuming that legislation authorizing financial distress grants is enacted). STATEMENT OF THE NATIONAL ASSOCIATION OF HOME HEALTH AGENCIES LEGISLATIVE COMMITTEE The National Association of Home Health Agencies supports H.R. 1736 and the Home Health Services Section of H.R. 2954 that provides grants for expansion of Home Health Services and training of personnel to provide Home Health Services. We urge the Committee to retain this section in their bill. In a speech to the American Association of Retired persons on January 20, 1975, Casper Weinberger, Secretary of HEW stated: "It is becoming increasingly obvious that Government reimbursement programs are encouraging this warehousing of older Americans. Government reimburses more for institutional care than it does for care in the patient's own home. Because Home Health Services have been under-financed by Government. Programs like Medicare, Medicaid and Public Medical Assistance provide home health service benefits for only a narrow segment of the older population." "This is perhaps the major reason why people end up in institutions-it is the only way they can receive care for long term illnesses." "Nursing homes are not cheap to build. Nor is care in them cheap; the cost of caring for a person in a nursing home now averages around $12.500 in New York City. For example, nursing homes cost the Medicaid system over $600 million annually in New York State. Taking into account current construction plans in that State, which call for a substantial increase in nursing home and similar beds over two years, nursing home Medicaid costs will soon exceed $1 billion in that State alone." "Many of these additional beds would in all likelihood not be needed if adequate home care programs existed. And depending on the level of care needed, care of the elderly at home could be financed for between $3,000 and $9,000 a year." "Today, home services do not exist on anywhere near the scale needed. Nor do we have the reimbursement mechanisms to meet the total need. Yet both economics and common humanity argue that we should have these home-care services." In spite of the mounting evidence that Home Health Care would be both a cost effective and humane approach to providing needed care, the number of home health Medicare certified agencies dropped from 2,350 in 1970 to 2,247 in 1974 due to restrictive interpretation of the Medicare home health benefit and other funding problems. About half of the agencies provide only two types of services-nursing plus one other-instead of a full range of services. Hospital based home care programs, which often offer a wide range of services, have found the same problems in trying to expand as have the community-based agencies. Only 230 of a total of some 7,000 hospitals have such programs. In addition to expansion funds, training funds are needed— To increase the availability of trained home-oriented paraprofessional personnel; To provide business management training for Agency administrators; and To provide continuing education for existing staff. Demand for home care services by all age groups is expected to increase in the months and years ahead due to pending and recently enacted legislation. Home health services are included in the benefits which must be offered by HMOs under the Health Maintenance Organization and Resource Development Act and are included in the major national health insurance proposals as alternatives to institutionalization. The Medicare, Medicaid Program does not provide an adequate reimbursement mechanism to create resources for development and expansion. Payments from these programs are made to certified Home Health Agencies only after services have been rendered and make no allowance in their formulas for development and expansion of Home Health Services. The service expansion funds would enable these existing Home Health Agencies to: (a) Extend services into unserved areas (b) Add homemaker/home health aide services and other services to existing home health agencies (c) to expand the number of services an existing home health agency can provide. (d) Improve the quality and cost-effectiveness of home health services; for example, improving staff productivity, developing a utilization review program, or an improved system of service documentation to reduce paperwork, etc. 49-210 O 75 16 |