Vermont’s visiting nurses are teaming with the state’s congressional delegation to protest pending cuts in home health care funding.
The planned incremental phase-out of “rural add-on payments” will siphon an estimated $1.2 million from Vermont’s home health agencies by 2022, said Jill Mazza Olson, executive director of the VNAs of Vermont.
The federal add-on payments make up a relatively small portion of those agencies’ budgets. But some say the cuts will have a cumulative effect given the financial, geographic and demographic pressures that home health care providers already face.
“Our focus is making sure that we can continue to care for every Vermonter who needs home health care,” Olson said.
In a joint statement, U.S. Sens. Patrick Leahy, D-Vt., and Bernie Sanders, I-Vt., and U.S. Rep. Peter Welch, D-Vt., said “vulnerable Vermonters should never be forced to make the extraordinarily difficult decision between moving into a nursing facility or staying at home without much-needed care.”
“We are concerned the new payment rule for rural providers will harm their ability to provide these vital services,” the lawmakers said. “We are working closely with the VNAs of Vermont and with the state to work collaboratively to address this issue to ensure that patient care is not affected.”
Olson’s Montpelier-based organization represents nine nonprofit agencies that provide a mix of home health care; hospice or palliative care; and long-term care across the state. The agencies have a long reach, serving all Vermont towns and making about a million home visits every year.
Visiting health care workers play an important role in the health care system of a rural, aging state like Vermont. A program like Choices for Care, for example, “keeps people at home, out of hospitals, out of nursing homes, and it saves money,” said Ron Cioffi, chief executive officer for Rutland-based VNA & Hospice of the Southwest Region.
The congressional delegation added that, “by allowing Vermonters to stay in their homes, visiting nurses help improve the quality of life for patients and their families every day.”
But Vermont’s home health agencies are heavily dependent on public funding, with about 59 percent of their services covered by Medicare and another 26 percent covered by Medicaid. Given the relatively low reimbursement rates for public insurance, “the world of long-term care and care for older people is chronically underfunded,” Olson said.
She added that “one of the big trends in Medicare over the last decade or so has been to cut payments to home health.”
The latest cuts further that trend: A round of funding and policy changes issued by the federal Centers for Medicare & Medicaid Services includes the gradual elimination of rural add-on payments as mandated by the Bipartisan Budget Act of 2018.
The add-on payments are a 3 percent additional allocation for Medicare-funded home health services in rural areas. Seven of Vermont’s nonprofit visiting nurse agencies receive those payments; Chittenden and Franklin counties don’t qualify.
The latest CMS rule sets up new categories for dispensing add-on payments based on home health usage and population. But, no matter the category, the rule also incrementally decreases those payments through 2022.
“Right now, if nothing changes, it’s being phased out,” Olson said.
In Vermont, Olson said the net effect is that Addison County’s home health agency will see its rural add-on payment cut in half as of Jan. 1. That payment then declines to 0.5 percent in 2020 and disappears the following year.
The other affected agencies will keep their 3 percent Medicare add-on in 2019. But the payment drops by one percentage point in 2020 and 2021, and there is no payment budgeted for 2022.
For VNA and Hospice of the Southwest Region, which serves Bennington and Rutland counties, that represents a likely hit of more than $300,000. That is “a lot of money for organizations like ours,” Cioffi said.
He said his staff covers 1,534 square miles and has made 142,000 visits so far this year. “A lot of our areas are very rural,” he said. “It is more expensive in the time it takes to get to patients and the mileage.”
Cioffi also said home health agencies aren’t immune from the health care staffing shortage plaguing providers across the state. “We have to be competitive in wages and benefits,” he said.
With margins already thin, a further cut like losing the Medicare rural add-on “just kind of compounds everything,” Cioffi said.
Agencies can try to increase fundraising to make up the difference. But “eventually, down the road, there are going to have to be some decisions made about what we’re able to do,” Cioffi said.
Olson said it’s not clear whether the elimination of the rural add-on will impact home care in Vermont. She pointed out a number of factors that will or may impact federal funding for providers, including an expected 2.2 percent increase in Medicaid reimbursement in 2019.
But she also said home health usage and costs are going to continue to rise.
“I worry that, looking ahead, we know we’re going to have more people who need care, just based on our aging population,” Olson said. “And we know that we already have a nursing shortage.”
The Centers for Medicare & Medicaid Services, in its final rule for the add-on cuts and other changes, took note of public comments objecting to the funding decrease. Given that the rural add-on elimination is “statutory,” CMS officials said they don’t have authority to make any changes.
“However, we plan to continue to monitor the costs associated with providing home health care in rural versus urban areas,” officials wrote.