Rural care providers struggle in face of financial difficulties

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Rural care providers struggle in face of financial difficulties

By Dan Nephin

Wyoming News, May 5, 2003

Home health care providers are facing a financial crisis as they contend with decreased Medicare reimbursements and their clients are turning to more expensive hospitals or nursing homes for care or going without, according to two studies.

Though the studies focused on Pennsylvania, U.S. Rep. John Peterson, R-Pa., said the situation affects rural health care nationwide.

Researchers at University of Pittsburgh's Center for Rural Health Practice and at Penn State University's Pennsylvania Office of Rural Health found that fewer people are receiving home health care following changes due to the 1997 Balanced Budget Act. Peterson obtained funding for the center's study.

Center director Michael B. Meit said the independent studies used different methods, but reached the same conclusions.

Home health care agencies provide skilled care ordered by physicians for patients in home settings. That includes skilled nursing, physical therapy, occupational therapy, speech and language therapy and social work services. It's becoming increasingly popular with older Americans who want to live out their lives at home.

Part of the Balanced Budget Act changed reimbursements under Medicare, the federal health insurance program for the elderly and disabled. Although the changes were intended to reduce fraud and abuse, they also reduced reimbursements for rural health care providers.

Val J. Halamandaris, president of the National Association for Home Care and Hospice, which represents 6,000 Medicare-certified home care agencies, said the intent was to trim $16 billion from Medicare over five years.

Instead, he and others said, $70 billion was cut.

"What they were looking to do was moderate the rates of growth, not trim into the muscle of home health care," Halamandaris said. "They overshot the runway. They put in too many controls."

Halamandaris said his association is in the midst of a similar nationwide study and isn't surprised by the Pennsylvania findings. For instance, he said, nearly half of the counties in Texas and Utah don't have a Medicare certified home care provider.

"We're just seeing across the board that home health is suffering out there in rural America," agreed Alan Morgan, vice president of government affairs for the National Rural Health Association.

And on April 1, a 10 percent add-on that had been given to home health care providers in rural areas was eliminated. The differential was to recognize the increased costs of providing rural care, such as increased time to get to patients far away.

The studies' researchers are recommending that reimbursement cuts be reinstated and that rural providers be given administrative help. They also say that state and federal agencies should educate health-care providers about the role of home health care. Meit said that despite the aging population, physician referrals to home health care agencies have declined.

Between 1997 and 2001, the period covered by the Pennsylvania studies, Meit said, visits by home care providers to rural clients declined some 30 percent.

Lisa Davis, director of the Pennsylvania Office of Rural Health, said in 1997, 45 percent of home health providers had branch offices while now only 29 percent do.

"As home health agencies close and as services are curtailed, (we) will be seeing less of those services," Peterson said.

Rural clients will "go to a hospital or nursing facility at a much higher cost," Meit said.

In some cases, depending on who pays, hospitals will lose money treating those clients, Davis said. That's easier for hospitals in urban areas which can spread those costs around, she added.

Rural counties are defined as counties with half or more of the population living in non-urbanized areas. In Pennsylvania, 50 of the 67 counties are considered rural. Older people are also more likely to live in rural areas.

Home health care won't have a chance to succeed if it isn't adequately funded, Peterson said. He said he hopes Congress can address some of the issues as it works on Medicare reform.