U.S. Sen. Charles Grassley of Iowa: Home health care is in danger

This is an excerpt of remarks by U.S. Sen. Charles Grassley of Iowa on the floor of the Senate last Friday. He was expressing support for a parliamentary motion by Sen. Mike Johanns of Nebraska focusing on home health care aspects of health care legislation now under debate. Johanns’ motion, to send the Senate bill back to committee, was defeated.

We are now considering a bill that cuts half a trillion dollars from the Medicare program to fund yet another unsustainable health care entitlement program. Around $42 billion comes from cuts to home health providers.

These severe cuts pose a legitimate threat to beneficiary access to home health services.

In Iowa alone, there are around 160 home health agencies that provide valuable services to Medicare beneficiaries across the state. Thanks to these providers, seniors in Iowa are able to continue to live at home instead of in institutional settings like nursing homes.

The cuts in the Reid bill will make it even harder for Iowa home health providers to care for Medicare beneficiaries.

A good part of the Medicare home health cuts come from “permanent productivity adjustments.” You have heard this week about how Medicare’s chief actuary found that savings from these productivity adjustments to be unrealistic.

You also heard this week how these permanent cuts would make it harder for providers to remain in the black. And you also heard these providers might end their participation in Medicare and possibly jeopardize access to care for beneficiaries.

Like many other Medicare providers, home health agencies provide labor-intensive services. There are few gadgets in home health that will increase productivity. And whatever available gadgets are unaffordable for many Iowa home health agencies because they are small operations with limited financial resources.

Home health care is about doctors, nurses and home health aides providing care to those who need it. So it is incorrect to assume these providers will achieve the levels of productivity like the rest of the economy.

The Department of Health and Human Services’ chief actuary’s findings clearly apply to home health in Iowa. Because of these cuts, the percent of Iowa home health agencies that have negative Medicare margins will increase to over 75 percent.

So, over 120 of the 160 home health providers will have negative Medicare margins because of the Reid bill.

Iowa providers are not alone. From one-half to 90 percent of home health agencies in states across the country would have negative Medicare margins.

I have here a letter dated Sept. 23, 2009, from Val Halamadaris, the president of the National Association for Home Care and Hospice. He wrote this letter in response to the $43 billion in home health cuts.

In this letter he stated, “It is crucial to the survival of the home health services delivery system that you work to reduce the $43 billion in cuts currently contained in the Senate Finance Committee’s health reform package. Our analysis indicates that by 2016, the proposed cuts in home health services payment rates will lead to nearly 70 percent of providers nationwide at risk of closing because their costs will exceed Medicare payments.”

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