State Budget Cuts Impact Home Health Care

The Home Care Alliance participated in several calls with MassHealth and Health and Human Services on planned budget cuts from Governor Baker’s administration. In total, the Governor announced $98 million in cuts from the $39.25 billion state budget.

Although there are reductions in home health, there are positive rates increases to report.

After years of advocacy by the Alliance and more recent efforts from a coalition of continuous skilled nursing providers as well as a family-based network called the Mass. Pediatric Nursing Campaign, MassHealth informed the HCA that payment rates for Continuous Skilled Nursing will increase by 2.6%. According to MassHealth, this equates to a $2.2 million bump in rates, which will become effective January 1st, 2017.

For the RN and LPN day and night rates, the increase hovers around a $1 boost in what those agencies currently receive. The Alliance, along with the provider coalition and family-based campaign, will continue to advocate for further adjustments to continuous skilled nursing rates in the upcoming FY18 state budget cycle.

As for home health skilled nursing rates outside of CSN, payment will be reorganized by the length of service of the MassHealth member. As of July 1, 2017, MassHealth is planning to break up the current skilled nursing rate for home health agencies into three separate tiers. The first tier will be for patients on services from day 1 through 30, which will be increased from $86.99 to $89.21. The second rate tier will be 31-180 days and the third rate tier is any home health service beyond 180 days.

MassHealth has indicated that the rates in the second tier will remain relatively static and the third tier will be decreased, but post 30-day rates as of 7/1/17 will be budget neutral from the changes taking effect on January 1st. An announcement from EOHHS will specifically outline the new tiered rates, but according to MassHealth, anything regarding rates that is seen before the New Year is not finalized and therefore subject to change.

The other notable decrease will take effect on January 1st when MassHealth plans to approximate the budget impact of those proposed second and third rate tiers into the current post 60-rate. The cut in the post 60-day rate from 1/1/17 to 7/1/17 will be a 6.75% reduction. This means the current post 60-day rate of $69.59 will be roughly $64.89 for the first six months of 2017. (This rate remains higher than the medication administration rate originally considered by MassHealth.)

Laid out in another way, this will be how rates are currently planned to change:

January 1 – July 1:

Home health services post 60-day rate will be roughly $64.89 (6.75% reduction)

July 1:

Service days 1-30: $89.21

Service days 31-180: Rates will remain roughly the same, but are not yet finalized

Service days 180: Rates will be slightly reduced from the current post 60-day rate, but are not yet finalized.

MassHealth is also streamlining enrollment in the Independent Nursing program to cut their application process from 8 weeks down to one week.

The net state cut for home health is approximately $3.8 million out of $758 million in MassHealth spending on home health care services.

Most of the other cuts announced by the administration are restoring vetoes previously proposed by the Governor in the FY2017 budget, but that were overridden by the legislature. At that time, the Governor vetoed $255 million and the legislature overrode $231 million. Included in these cut overrides are certain hospital supplementary payments (particularly to pediatric and Western MA hospitals) as well as $1.1 million in cuts to public health hospitals.

Other impacted accounts include supplemental payments to nursing homes, which will be reduced by $2.8 million, as well as a $2.8 million cut to adult foster care (AFC).

The Pediatric Palliative Care account (4590-1503) is being reduced by $400,000.

The legislature has already announced their view that Governor Baker went too far with some of the announced cuts and they will be working on restoring some of the funding reductions.

HCA of MA has an upcoming meeting with MassHealth to review the Governor’s proposal.  Also on the agenda are issues with ICD-10 changes that are impacting agency billing and payment.

Return to www.thinkhomecare.org.

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