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Western North Carolina hospitals are increasingly resorting to turning home-care programs over to private businesses, which, hospital officials say, have become too costly for them to provide.
In one of the latest changes, Transylvania Regional Hospital has announced plans to drop home-care services, which applies to non-medical services such as personal hygiene assistance, running errands, light housekeeping and meal preparation. These type services often help elderly people continue to live independently in their own homes.
Officials at the Brevard-based hospital said its Support Services Private In-Home Aide Program, which served about 100 patients, would end by Nov. 1. The change does not include home healthcare services, which applies to skilled nursing and other care such as physical therapy. Transylvania Regional plans to continue that program.
Ron Paulus, president and CEO of Mission Health System, said the service cuts at Transylvania Regional were related to the loss of Medicaid reimbursements the government has been giving to hospitals for caring for uninsured people who end up in emergency rooms. Mission Health, based in Asheville, is the state’s sixth largest health system and includes member and affiliate hospitals in Asheville, Franklin, Marion and Spruce Pine. After being in a management agreement with Mission since Jan. 1, 2011, Transylvania Regional Hospital became a full member hospital of Mission Health last October.
Medicare, Medicaid and private insurers will only pay for medically necessary care ordered by a physician or authorized medical provider.
Now, private companies, such as Bayada Home Health Care and Compassionate Home Care, also provide in-home aide services in Transylvania County and surrounding communities.
But Sam Smitherman, owner and administrator for the Hendersonville-based Compassionate Home Care, said the home-care industry is highly competitive and not very profitable. For example, it has the lowest increases in government reimbursements of any segment of the home-care industry that includes nursing homes.
“Most of our clients are out-of-pocket payees, but 10 percent have long-term care policies. Medicaid and the VA also will pay for some supportive services,” he said, referring to the U.S. Department of Veterans Affairs. Compassionate Home Care is licensed to serve patients in five counties, including Buncombe, Henderson, Polk, Rutherford and Transylvania counties.
“But, it’s still pretty tough to make a profit,” Smitherman added.
CEO: Mission Health facing $350 million in cuts
Hospitals have a harder time making a profit with home care because many of their certified nursing assistants that provide that care are at the top of their pay grades, while private businesses use non-certified in-home aides who are not paid as much. When benefits, and in some cases state retirement, are tacked onto CNAs’ pay, the CNAs usually end up making more than hospitals receive from the government for providing those services.
The reduced Medicaid reimbursements to hospitals that will go into effect in 2014 with the Affordable Care Act were based on states expanding their Medicaid program and fewer uninsured people showing up at hospital emergency departments.
Since Gov. Pat McCrory rejected Medicaid expansion, hospitals in North Carolina will be hit with a double whammy. Not only will many of those same uninsured people seek healthcare at emergency departments, but now hospitals will not receive the reimbursements for providing that care.
Mission Health faces cuts of more than $350 million in federal and state reimbursements over the next 10 years alone, Paulus said.
“Cuts of this magnitude are not confined to Mission, or even North Carolina; this is the financial reality in which healthcare operates today, and will operate going forward,” Paulus said.
“Because of our demographics in Western North Carolina, Mission is impacted even more by the cuts than most other health systems in North Carolina,” he added.
Hospitals with a lot of older patients feel the impact of reduced federal and state reimbursements more than others. Smaller hospitals don’t have the operating margins that larger hospitals have and are not reimbursed at the same rate as those located in metropolitan areas. However, large hospitals like Mission often have a larger number of patients who rely on Medicare and Medicaid to pay for their care.
“Mission has been reviewing, and will continue to review, all of our operations to determine where program improvements and efficiencies can be realized – whether by eliminating waste or by working with our community and associated organizations to ensure that high-quality services are available through alternative means. We view our community organizations as partners in caring for those who live and work here,” Paulus said.
“All Mission facilities will see multimillion-dollar cuts over the decade. For just one example, Transylvania Regional Hospital – a small, rural Critical Access Hospital — alone will experience a $15 to $18 million payment reduction (from cuts in Medicaid and Medicare reimbursements) in that time period alone,” he said.
‘At this time, other program cuts are not planned’
Recognizing that Transylvania Regional has been only one of several in-home aide programs operating in its community, it chose to transition this particular program to other local providers, Paulus said.
“They (Transylvania Regional staff) called to inform us about what was going on and to see if we could help those clients,” Smitherman said, adding that he does not know how many of the 100 Transylvania home-care clients will be absorbed by his agency.
“I do know we can definitely pick up those clients,” Smitherman said.
“We are confident that these local in-home aide providers will meet the needs of patients and we look forward to collaborating with them,” Paulus said. “At this time, other program cuts (for the Mission system) are not planned, but we always look for ways to enhance the care of patients in our communities, whether by us or a community partner.”
But Transylvania Regional is not the only hospital that has eliminated home-care services in recent years.
MedWest Health System dropped its in-home aide services in 2012 at its Haywood hospital, but continues to offer the service further west at its Harris hospital, located in Sylva.
“We discontinued the Community Assistance Program for Disabled Adults and the Home Care and Community Services Block Grant program on June 30, 2012, due to many factors, but mainly it was duplication of services by other agencies,” said Christina Deidesheimer, director of strategic marketing and communications for MedWest-Haywood, located in Clyde.
“It is important to note that these programs differ from Medicare Certified Home Health, which is intermittent-skilled care,” she said. “MedWest-Haywood still operates a very robust home health program that assists a great many patients.”
But state and federal changes will likely have further impact on available health-care options.
Hospitals will not lose federal reimbursements related to the decision not to expand Medicaid coverage this year, but will also lose $5.6 billion in Medicare reimbursements over the next 10 years. That’s added to the $1.2 billion in other Medicare cuts already enacted, Don Dalton, spokesman for the N.C. Hospital Association told Carolina Public Press shortly after McCrory announced the state would not expand the Medicaid program.
All hospitals across the state will look for ways to cut costs, Dalton said, and may ultimately eliminate more money-losing services.