It seems the United States stands at an impasse on the subject of long-term healthcare services – a topic that has stood center stage as one of the reforms spurred on by President Obama’s administration and has become the “red-headed stepchild” of the current Medicare system.

According to U.S. Census Bureau projections, between 2010 and 2050, the number of people 65 or older is expected to reach a record 20 percent of the national population. Bolstered by advances in medical technology enabling individuals with chronic illnesses and disabilities to live longer, the rather sudden longevity of our senior generation has brought into focus the gross inadequacy of services available to them.

While Medicare stands as the government’s main program to meet the needs of our seniors, there is actually little it does to address their long-term care needs. Instead, many of the upfront costs are taken on by the elderly or disabled themselves, along with their families, and when their own financial reserves have been exhausted, state Medicare programs step in. Accounting for approximately 22 percent of the total state budget, Medicaid consumption has sent individual states scrambling for alternatives to meet patient needs and reduce skyrocketing spending.

One avenue that many state governments are encouraging is home care rehabilitation services, which can cost about a third of the price as comparable care in a nursing home. Many medical experts believe that a home environment is generally better for patient recovery and long-term care, but only if there is adequate clinical and caregiver support. In a survivalist economy, with scant aid from Medicare, a new class of nurses and therapists are entering the home care field, prepared to weather the storm.

In for the Long Haul

In recent years, 20/20 and other network “special reports” have highlighted the cost of long-term care and the need to plan for it well in advance, focusing not only on the burden that long-term care poses on individuals, families, and society, but also on concerns about the quality of that care. Price and the particular patient’s needs are both key in choosing long-term care services – more than 80 percent of older adults have one chronic condition and nearly two-thirds have multiple chronic conditions.

Running out of viable options, admitting the patient to a nursing home seems like the most logical solution for most families.

“If you’re placed in a long-term care facility, chances are good that you’re never coming out of there,” says Cynthia Laverty, founder of The Care Company, a Sherman Oaks, Calif.-based home care provider. “Unfortunately, this mentality has become part of our society, or at least, American society. In other countries – Japan, for example – the elderly live very vital lives because they’re brought into the family, nurtured, and taken care of as a part of the functioning family. In America, we seem to just toss people away when they become inconvenient.”


The advantages of having home care services rather than admission into a nursing home cannot be understated. The intellectual portion of being able to keep some level of independence can go a long way to improving the quality of life for many elderly or disabled adults. Furthermore, most patients only require assistance with regular, daily activities, which might include transportation to doctor’s appointments, grocery shopping, or bathing.

“Long-term care facilities also knock a family out of the box financially, too,” says Laverty. “These places are not inexpensive. Even with forethought for long-term care, when caregivers are deciding between a $100,000 policy or $200,000 policy, that’s basically your bag of money for any necessary services. And that bag of money can run out fast because we no longer live in a society, thankfully, where our seniors are dying at 65 years old – we can keep people alive longer and prolong their quality of life. Caring for the elderly or the chronically ill is no longer a six-month to a year process. It can last decades. And I don’t think the government is prepared to deal with this.”

To Meddle with Medicare

Today, more than 7.5 million Americans receive home care services – a number that is only expected to grow as individual state governments attempt to cap rampant Medicaid spending, and put the squeeze on applicants to long-term care facilities. However, for the time being, the home care field remains the one feeling the pinch.

“In home care, it all comes down to money because, then, anything is available,” says Laverty. “You can get anything. You can get oxygen from medical supply stores. You can get equipment for suctioning through the chest. You can get anything you need – but you’re paying for it. You can submit it to your insurance and Medicare all you want, but it’s not getting paid for. It’s like if you were traveling to a foreign country; you can get anything you want if you can pay for it. But if you’re the person who has to go on the bus tour, you’re not getting anything you want. You’re only getting what the bus tour offers.”

While many healthcare reformers are advocating the provision of more federally-funded care to patients in their own homes or communities, rather than in hospitals and nursing homes, Medicare officials seem hesitant to push forward. One reason for this obstacle is the recent controversy surrounding one particular segment of the home healthcare market, namely those providing short-term care to Medicare beneficiaries after hospitalization.

In its annual report to Congress earlier this year, the Medicare Payment Advisory Commission concluded that several home health agencies have been paid much more than the cost of providing their services. After monitoring the reimbursement rates, these experts say there is room to reduce payments substantially without harming the provision of services, such as skilled nursing care, physical or occupational therapy, and speech therapy. Members of the home healthcare industry obviously disagree.

“Many states have removed the in-home care Medicare benefit for physical therapy, so seniors now need to pay privately or receive these services in a long-term care facility,” says Shelly Sun, co-founder and CEO of BrightStar Healthcare in Gurnee, Ill.

As just one of many home care agencies in the field, BrightStar Healthcare specializes in providing medical and non-medical homecare to private clients within their homes, as well as supplemental healthcare staff to corporate clients, including hospitals and nursing homes. While senior citizens do make up the majority of its clientele, BrightStar Healthcare also works with pediatric and worker compensation cases, long-term care and veteran clients, as well as private trust and public guardian payers.

“At BrightStar, we try to partner with the rehabilitation departments to help the senior transition home with additional care and support after the Medicare benefit runs out,” says Sun. “The costs of the facility are often higher than offering the services on a pre-approved visit basis through Medicare in the home. State changes have increased the costs for Medicare and have made access to care inconvenient for those in need. If Medicare delivered in-home care therapy services, then the patient could receive more cost-effective and convenient care for therapy and supplement these services with private pay home care.”

Dismal Medicare reimbursements, as well as suggested future cuts, have also hit other home care providers hard in recent times – namely, companies that provide infusion therapy in the home setting. Working with a wide range of a patients – including those afflicted congestive heart failure, immune disorders, neurological disorders, growth hormone deficiencies, and high-risk pregnancy – home infusion medical professionals can provide antibiotics, chelation, immune globulin (IVIg), milrinone, pain management, steroids, total parenteral nutrition, and many other therapies.

“One of [Raleigh, N.C.-based] MedPro Rx Inc.’s core services is the provision of IVIg in the home setting,” says Andy Clark, RPh, MedPro’s director of clinical services. “Our clinical team, consisting of a high-tech infusion nurse and lead clinical pharmacist, is very diligent in evaluating current and anticipated challenges in the provision of this therapy at home. A constantly changing reimbursement landscape, side-effect management and care coordination among healthcare professionals and the patient are but a few of those challenges.”


According to many medical professionals, home infusion is more cost-effective than an in-patient hospital stay. In addition to this, it decreases the length of a hospital stay, which also reduces the risk of opportunistic infection. Returning to one’s home and family can promote quicker recovery and improve the quality of life for both patient and family or caregiver. Most patients like receiving IV therapy in the privacy and comfort of their own home, where it can be administered around their schedules.

“Currently a gap exists in coverage for drugs used in infusions to treat certain conditions,” says Clark. “Medical supplies, nursing services, and the equipment needed are often not included in the therapy coverage. In addition, Medicare’s reimbursement methodology for infusion medications limits therapies that home care companies can provide at a profit. This lack of coverage and a reduced reimbursement often forces patients to remain in the hospital longer than necessary to receive their treatment that could possibly have been done in the home or alternate site setting.”

The Challenges Ahead

For many, the writing is already on the wall: the current nurse shortage will continue into the next decade, and by 2020, it is expected that nearly one in 10 nurses will be needed exclusively for home health care services.

Spurred on by these staggering statistics – and in an attempt to address home health overpayments stemming from potential fraud and abuse – the Centers for Medicare & Medicaid Services (CMS) recently announced a proposed 2.2-percent home health market basket update to the home health prospective payment system (HH PPS) rates for 2010, along with other modifications to its outlier policy.

Currently, home health agencies receive additional payments – also known as outlier payments – for 60-day home health episodes of care that carry unusually high costs. The new CMS proposal intends to cap outlier payments at 10 percent per agency and target total aggregate outlier payments at 2.5 percent of total HH PPS payments, rather than the current 5 percent – the reduction of home health rates would in turn fund outlier payments. By lowering the total outlier payment target to 2.5 percent of total HH PPS payments, CMS could then increase home health rates by 2.5 percent.

“The outlier policy changes we are proposing are in response to overwhelming evidence showing a small, but growing, number of home health providers have been abusing the system, especially in certain parts of the country,” says Jonathan Blum, director of CMS’ Center for Medicare Management. “Refining our outlier policy with an additional emphasis on data collection will help us maintain fiscal integrity and encourage better coordination of home health benefits for people with Medicare.”

As home care moves into the new millennium, it is evident that something has to give in how our long-term care services are managed. With a senior population living longer and poised to strain the healthcare and economic resources in this country, many home care agencies and Medicare reformers believe that home care services is one solution.

Others believe that the new role of home care will be expanded, focusing on more than just services for homebound people, but also providing a full range of services that help people of all ages live in the community with maximum levels of independence and self-sufficiency. However, with impending Medicare cuts and restructuring proposals, the future of home healthcare remains uncertain.

— Bob Stott is the senior editor for Therapy Times. Questions and comments can be directed to bstott@therapytimes.com.