Obama Budget Proposes Home Health Copays to Cut Medicare Costs

A home health copay, as seen in the Obama Administration’s 2016 budget proposal, would reduce Medicare spending by $830 million through 2025.

The 2016 budget proposal, released Monday, contains home health copayments for Medicare beneficiaries along with cuts to post-acute care provider reimbursements for the next decade.

The budget proposal includes a reduction each year in the Market Basket Index updates for all post-acute providers from 2016 through 2025, including a 1.1 percentage point reduction for home health care. The proposed update cuts would reduce home health reimbursements by a total of over $15 billion.

If they take effect, these payment reductions would be in addition to the rebasing of home health, home health productivity adjustments, and sequestration that lower payment rates by over 14% starting in 2015, according to the National Association for Home Care & Hospice (NAHC).

The nonprofit home care and hospice advocacy group is voicing strong opposition against the 2016 budget, noting that the need for home care will only increase as baby boomers age, and higher cost-sharing would force seniors into more costly care settings. But the organization also notes that this proposal has not succeeded in the past.

“These proposals from the President are essentially repeats from last year’s budget,” says NAHC President Val J. Halamandaris, in a statement. “Congress refused to enact these suggestions last year and we hope for the same response to this year’s budget.”

Other post-acute advocacy groups, including LeadingAge and the American Health Care Association, also have spoken out against the budget, particularly the across-the-board provider reimbursement cuts.

These associations helped craft a recently passed bill that put other Medicare savings mechanisms in place, by tying reimbursement more closely to quality goals. This type of payment system reform is needed and valuable, compared with merely withholding money that operators rely on to provide services, LeadingAge Director of Governmental Affairs Barbara Gay tells HHCN.

Gay acknowledged that the White House budget is never adopted in full, but she cautions that the Medicare cuts could gain support as Congress works out its budget proposals, or be included in other pieces of legislation.

“It’s very much too early for us to say that it’s not a problem,” Gay says.

Written by Cassandra Dowell and Tim Mullaney