2016 Medicare and Medicaid Issue Brief
Legislation | March 02, 2016
Medicare and Medicaid are essential sources of coverage for acute and post-acute care and for long-term services and supports. LeadingAge is advocating to remedy the problem of "observation days" and prevent any more cuts in Medicare reimbursement.
ISSUE
Medicare and Medicaid are essential sources of coverage for post-acute care and for long-term services and supports. Private long-term care insurance, which in its current form has proven inaccessible and/or unattractive for most Americans, currently covers less than twelve percent of all long-term care costs nationwide.
Adequate Medicare and Medicaid reimbursement makes a major difference to providers’ ability to meet the costs of recruiting, training and retaining qualified staff as well as other essential operations that ensure high quality clinical care and quality of life for residents and clients. Restrictions on Medicare payments to post-acute care providers currently include:
A 2% reduction under the sequestration that will last through 2025.
Cuts resulting from the “productivity adjustment factor” applied under the Affordable Care Act.
Future cuts under the “withholding” provisions of value-based purchasing which will go into effect in fiscal 2019 according to the Protecting Access to Medicare Act of 2014.
SOLUTIONS:
- “Observation stays”: We support H.R. 1571 and S. 843, bipartisan legislation to correct the problem of Medicare beneficiaries being kept in the hospital for extended periods “under observation” without being admitted as inpatients. Beneficiaries in this situation do not meet the three-day stay requirement for Medicare coverage of any post-acute care they may need following their release from the hospital. They have to pay out of pocket, sometimes thousands of dollars, for the care they need or go without it.
The legislation we support would count any time a Medicare beneficiary spends in the hospital toward the three-day stay requirement. This is the simplest, fairest and most cost-effective way to resolve the issue.
- No more cuts in Medicare post-acute care reimbursement: We oppose any additional across-the-board cutbacks in Medicare reimbursement rates for skilled nursing facilities, home health care or hospice.
In his budget for fiscal 2017, President Obama proposed new cutbacks in the annual payment updates post-acute care providers receive. The Centers for Medicare and Medicaid Services computes the payment update according to the increase in costs involved in providing the services covered by Medicare. The cumulative payment cuts to which post-acute care providers are already subject can result in negative payment updates, that is, absolute payment cuts from one year to the next. More cuts would be damaging to the post-acute care system.
- Oppose HR 3298, the Medicare Post-Acute Care Value-Based Purchasing Act, as written: The value-based purchasing initiative already enacted and being implemented will “withhold” a percentage of Medicare payments to nursing homes. Nursing homes that provide high-quality care will be able to earn back part but not all of the withheld reimbursement. We supported the concepts behind the present value-based purchasing program because it measures reduction in avoidable rehospitalizations, a measurable indication of quality.
The new value-based purchasing legislation does not measure for quality and would effectively be an across-the-board cut in Medicare payments. The amount of payments proposed to be withheld is far larger than under the current initiative, and nursing homes would not be able earn back all the amounts withheld even if they met or exceeded the required measures.
Again, the payment reductions to which providers are already subject need to be taken into account. “Value”, or quality care, cannot be achieved by withholding the resources nursing homes need to hire staff and meet other essential expenses.
Medicaid:
We oppose proposals that would reduce federal Medicaid funding to the states, including blended payments, block grants or spending caps.
Long-Term Services and Supports
We urge Congress to continue working to develop a more sustainable, healthy and affordable means of financing long-term services and supports for the future, as recommended by LeadingAge’s seminal report, PATHWAYS: Perspectives on the Challenges of Financing Long-Term Care Financing.
February 20, 2016 Contact: Marsha Greenfield, mgreenfield@leadingage.org, (202) 508-9488