Medicare and Long Term Care

I saw this article the other day and meant to blog about it but didn’t have time.

Hundreds of hospice providers across the country are facing the catastrophic financial consequence of what would otherwise seem a positive development: their patients are living longer than expected.

 

Over the last eight years, the refusal of patients to die according to actuarial schedules has led the federal government to demand that hospices exceeding reimbursement limits repay hundreds of millions of dollars to Medicare.

Hospice provides palliative and non-curative care for people who are diagnosed as having only six or fewer months to live. Much of what is provided through hospice is indistinguishable from long term care – many of the particular services and supports look exactly the same as what is provided to people who are elderly or have disabilities but are not considered terminally ill. Some hospice is provided in facilities but much is provided in the home and community. Thus, for hospice patients who continue to live – and live in their own home or somewhere other than a nursing facility – their hospice services are long term care services.

The Medicare program wasn’t designed to provide long term care. It was intended to provide acute care (which we all think of as ‘regular’ health care, meaning doctor visits and hospitals stays and such) as well as post-acute skilled care and rehabilitation. For certain people with disabilities and functional limitations who are very poor (as well as a group who would be very poor if they paid all their medical bills), the Medicaid program provides long term services and supports.

Medicaid long term care used to be primarily nursing facility care. But in the past couple of decades, states have been working to expand home and community-based (HCB) alternatives to nursing facility care. This shift has largely been due to budget pressures, as HCB is typically less expensive in the aggregate than nursing facility services. Of course, the political involvement of disability and senior advocacy groups, which have raised awareness of the needs and rights of individuals who need these services, has also played a big part in this shift.

However, because facility-based care is an entitlement to anyone who meets the Medicaid income and health/functioning criteria but HCB services are not, state Medicaid programs typically have waiting lists of people who want to receive HCB services. One result of Medicaid’s failure to fully meet the demand for HCB long term care services is that those who are ‘dually eligible’ for Medicaid and Medicare sometimes get their long term care services from the Medicare program. They aren’t supposed to, but some Medicare services (ie, the post-acute care) look very much like long term care.

Medicare has a home health benefit, for example, which provides skilled nursing care, home health aide servies on a part-time and intermittent basis, and other things like physical therapies. The nurse or aide coming into the home may be performing the exact same activity for Patient A, who is getting the service through the Medicare home health benefit, as for Patient B, who is getting the service through a state’s HCB services Medicaid waiver program. In 1997, the federal government made changes to the Medicare home health benefit in response to significant cost increases over the preceding decade or so. They cracked down on reimbursement policies and eligibility rules and made it much more difficult to use the benefit to meet long term care needs.

Now many hospice patients are outliving the six month prediction and thus driving costs upward as they receive what is, for all intents and purposes, long term care services via the hospice benefit. A decade after the home health crackdown, it would appear we are getting a hospice crackdown, despite the fact that providing these services saves Medicare dollars overall:

In the early days of the Medicare hospice benefit, which was designed for those with less than six months to live, nearly all patients were cancer victims, who tended to die relatively quickly and predictably once curative efforts were abandoned.

 

But in the last five years, hospice use has skyrocketed among patients with less predictable trajectories, like those with Alzheimer’s disease and dementia. Those patients now form a majority of hospice consumers, and their average stays are far longer — 86 days for Alzheimer’s patients, for instance, compared with 44 for those with lung cancer, according to the Medicare Payment Advisory Commission.

 

The commission, which analyzes Medicare issues for Congress, recently projected that 220 hospices — about one of every 13 providers — received 2005 repayment demands totaling $166 million. The National Alliance for Hospice Access, a providers’ group that is lobbying for a three-year moratorium on the collections, places the numbers at 250 hospices and $200 million.

 

Because fewer than a tenth of all hospice providers have faced repayment, Medicare officials suggest that management might have been an issue. But Lois C. Armstrong, president of the hospice access alliance, said that if the cap on Medicare reimbursements was not lifted, the availability of care would tighten at a time when demand for hospice care was exploding and when new research suggests it saves money for the runaway Medicare program.

If these people don’t get the home-based care they need, they are more likely to end up with an acute condition or exacerbation of an existing condition, resulting in more doctor visits, labwork and – most expensively – hospital stays. Which may be followed by a nursing facility stay (the first hundred days of a post-hospital nursing facility stay are paid by Medicare).

Such Medicare beneficiaries may not be poor enough to qualify for Medicaid long term care services. Even if they are, their state’s Medicaid program may not offer HCB long term care at all or in their area, and if it does there may be a waiting list.

As a former government bureaucrat, I do agree that keeping a benefit within its defined limits is good – accountability as well as planning require accurate data about who is getting what, for what purpose and to what end, in what setting. So serving a non-terminal individual via the hospice program is no good from that perspective. However, people need the services so you might think the easy answer (ha) is to fund more HCB services via the correct benefit. But in this case that benefit is only offered in the Medicaid program.

This is a problem. Not all Medicare beneficiaries qualify for Medicaid. In fact, most do not. In fact, your family may include at least one older member who needs some home care but doesn’t get it because they don’t qualify for Medicaid and don’t have the money themselves to hire an aide or assistant. My mom and aunt spent a couple of years rotating my grandmother between their houses because she couldn’t live alone, no one wanted to put her in a nursing home and neither she nor they could afford to maintain her in her own apartment by hiring a round-the-clock attendant.

If you can’t afford HCB care and you can’t get Medicaid-funded HCB care, you either go without or with the help of family as long as you can – or else (or eventually) you end up in the hospital and/or a nursing facility. Which is both costlier and crappier from the quality of life perspective.

The inability of most people to afford HCB long term care will become an ever bigger problem as our population ages. Long term care insurance is an option for those who can afford it, but that product is still a work in progress as it only began being offered in the last couple of decades. And in a country with millions of un- and under-insured, the notion that long term care insurance is going to close the gap between the need and what’s available through Medicaid or people’s own bank accounts is a bit ridiculous.

And now that you’ve read this whole long thing (are you still there??), I know you are saying to yourself “Enough with the coma-inducement, what does she think we should do?”

One solution is to combine Medicaid and Medicare into a single program (which resolves alot of issues since people who are dually eligible are the cost drivers in both programs although it introduces alot of program administration and funding issues) and expand it as the basis of a national health care program. Failing that, Medicare needs a long term care benefit.