Executive order budget undermines long-term health savings

Gov. Dannel Malloy’s Executive Order calls for a 5-10 percent reimbursement cut to non-profits as well as eliminating “add-on” payments to Medicaid home health providers serving the State’s most vulnerable in our inner cities.

The financial impact of this action hurts Connecticut, its taxpayers, and our Medicaid program by jeopardizing the viability of the cost-effective healthcare provider network that creates a state savings of more than $100-million each year for the CT Dept. of Social Services (DSS).

DSS data indicates that home and community-based providers under the CT Home Care Program for Elders and other home-based programs saved the Connecticut State budget $1 billion over the past 10 years.

Any further Medicaid provider payment reduction would directly harm home health agencies, particularly those who care for residents with AIDS, high-risk maternal health issues, and those who require extended home health hours including pediatric patients. The elimination of the Medicaid “add-on” would also hinder access to care to Medicaid clients in the most challenging neighborhoods as agencies could not afford to hire “escorts” – people necessary to accompany nurses and home health workers to Medicaid clients in the “roughest” neighborhoods.

Connecicut home health agencies are the cost-effective solution to caring for one out of every five state residents who receive healthcare under the state-sponsored Medicaid program. While the state benefits from cost savings, home health agencies lose money on every patient visit.

On average, Medicaid payment rates to home health agencies cover 60 percent of the cost to deliver home health nursing, therapy, medication reconciliation or other care to manages acute or chronic conditions. Home health agencies have not received a reimbursement rate increase in 10 years, with the exception of a 1 percent increase in 2015 (equaling $9 on a nursing visit). Medicare and private insurance reimbursement has also been reduced significantly over the past five years, squeezing the providers further.

Approximately 45 Connecticut home health agencies serve Medicaid clients. Several agencies will not be able to sustain any reduction in Medicaid reimbursement. Many agencies have already limited the number of Medicaid clients they will accept, and others are having emergency meetings with their boards to discuss their financial condition and ability to continue as a Medicaid provider.

Unfortunately, there is no back-up plan to manage the care needs of Connecticut’s most vulnerable and aging population once the home health agencies exit as Medicaid providers. The default for these individuals is the hospital emergency room or a nursing home at a significantly-increased cost to taxpayers and the state.

The home health provider community is asking the state Llegislature to recognize that shortsighted budget cuts now will have a negative and costly long-term impact on Connecticut.

We understand the critical nature of creating a workable and balanced budget, however, long-term budget savings will be lost if home health agencies are no longer part of the Medicaid delivery system due to unsustainable state reimbursement.

There are no easy answers, but the value proposition is clear.

The home health sector has been a longtime collaborative partner with the state, but sustainable and appropriate reimbursement for services rendered is imperative.