The U.S. Centers for Medicare & Medicaid Services (CMS) on Wednesday released $165 million in supplemental funding for Money Follows the Person (MFP) programs, which encourage transitions from long-term care facilities to home- and community-based settings.
In the grand scheme of government health care spending, $165 million is only a drop in the bucket. In fact, the new funding will only divert $5 million to each eligible state’s Medicaid program for MFP — helpful, but hardly game-changing.
The arguably most exciting part of Wednesday’s announcement was CMS Administrator Seema Verma’s remarks about home-based care and shifting America’s focus away from nursing homes.
“The tragic devastation wrought by the Coronavirus on nursing home residents exposes America’s over-reliance on institutional long-term care facilities,” Verma stated. “Residential care will always be an essential part of the care continuum, but our goal must always be to give residents options that help keep our loved ones in their own homes and communities for as long as possible.”
Contextually, those words very likely stand as the strongest, most direct endorsement of in-home care from CMS’s leader since the start of the COVID-19 public health emergency in March. A case can even be made that the brief but powerful remarks are CMS’s biggest backing of home-based care ever.
In the past, government officials often viewed home-based care as a vital cog in the senior care machine. Wednesday’s comments from Verma about keeping people “in their own homes and communities for as long as possible” make it clear CMS now sees in-home care as the star of the show instead of a supporting character.
Apart from recognizing the overwhelming preference older adults have for aging in place, CMS additionally gave a nod to home-based care’s cost-cutting ability, an important consideration as the federal government bleeds money at a historic pace.
Overall, the federal budget deficit is estimated to hit $3.3 trillion for the fiscal year ending this month, according to new projections from the Congressional Budget Office (CBO).
“Home- and community-based care is not only frequently more cost effective, but is preferred by seniors and adults with disabilities seeking to maintain the dignity of independent living,” Verma added.
There are seemingly countless studies that highlight savings associated with in-home care.
One 2019 study, for example, found that individuals who received home health care immediately after going to the ER had a total 90-day cost of $13,012, compared to $20,325 for patients who were treated in the hospital.
A separate, internal study conducted by Bayada Home Health Care found that the state of New Jersey could save roughly $30,000 per person annually if more care was provided in the home instead of facilities.
While the federal deficit is rising in a variety of areas, wasteful spending in health care and long-term care is particularly egregious. About a quarter of all U.S. health care spending — $760 billion to $935 billion per year — can be categorized as waste, past research from Humana Inc. (NYSE: HUM) suggests.
Humana CEO Bruce Broussard is among those to tout home-based care’s value in this regard.
“You have this holistic view of the [individual], so you can create an intervention based on personal needs, clinical needs and [personal] preferences,” Broussard said at a Medicare Advantage conference last year. “All of those, I think, will make a great health care system a decade from now.”
Hopefully, Wednesday’s encouraging sentiments from Verma signal a true turning point for in-home care, both during the ongoing pandemic and into the future.
For that to happen, however, CMS will need to continue taking tangible actions to support both Medicare-certified home health providers and Medicaid-reimbursed home care agencies.
On the home health front, one major step CMS can take is reconsidering parts of the Patient-Driven Groupings Model (PDGM), namely the payment overhaul’s 4.36% behavioral adjustment.
An independent analysis commissioned by the Partnership for Quality Home Healthcare (PQHH) found that PDGM has led to a substantial dip in government spending on home health care, forcing providers to do more with less during an extraordinarily difficult time.
Meanwhile, when it comes to Medicaid, the agency should do everything in its power to reduce red tape, eliminate administrative costs and support direct care workers. Doing so would go a long way in keeping Medicaid-reimbursed home care businesses afloat, as stagnant rates in some states have already forced operators out of certain markets.
Whether those things happen is anybody’s guess.
But Wednesday’s comments definitely suggest CMS is moving in the right direction.