Wednesday, March 31, 2010

Healthcare Reform Will Impact Long-Term Care

The health reform legislation passed in the House Sunday contains numerous provisions related to long-term care.

One of these provisions is the Community Living Assistance Services and Support (CLASS) Act, which was originally introduced by the late Senator Edward Kennedy. The CLASS Act will make long-term care insurance available to all Americans, who will be automatically enrolled with the choice to opt out.

Individuals will begin paying a premium immediately and, after five years, those with functional limitations have the option of receiving a cash benefit of around $50 a day that can be used to offset the cost of long-term care services.

"The CLASS Act will help offset the high cost of long-term care services for aging and disabled populations. In particular, these funds will allow individuals flexibility to receive services in their homes and potentially prevent admissions to nursing homes," says Katherine McCarthy, business account manager at PointRight in Lexington, MA. "The overarching goal of healthcare reform is to make healthcare both more accessible and affordable in the U.S. Long-term care expenses, particularly in aging populations, are among the most costly to Medicare and Medicaid today. By providing insurance, there is a real opportunity to reduce costs in this sector."

The bill also includes a provision to help close the Medicare Part D coverage gap for medications. According to the Senate’s summary of the Patient Protection and Affordable Care Act, "in order to have their drugs covered under the Medicare Part D program, drug manufacturers will provide a 50 percent discount to Part D beneficiaries for brand-name drugs and biologics purchased during the coverage gap beginning July 1, 2010. The initial coverage limit in the standard Part D benefit will be expanded by $500 for 2010."

The bill will implement much stricter guidelines in terms of ownership transparency of nursing home chains.

"This will allow patients and the public at large to better understand ownership and operational hierarchies that currently are difficult to identify. Making these changes in the industry will be challenging, particularly for large publically-owned chains," McCarthy says. "However, those of us in the industry are all very excited that the bill will extend the therapy caps exceptions process through 2010. At the end of this year, they will have to revisit this issue again, at which point we are all hopeful for a long-term fix that ensures patients are able to receive the care they need based on medical necessity, rather than an arbitrary cap on funding."

In addition to the healthcare reform bill, the House passed a reconciliation bill containing changes to the just-passed legislation, which will be sent to the Senate for final approval.

One of these amendments awaiting a final vote is an amendment to delay the implementation of Resource Utilization Group, Version Four (RUG-IV), by a year. RUG-IV was originally scheduled to be implemented alongside the MDS 3.0 in October, but the amendment to the healthcare bill will not allow RUG-IV to be implemented before October 1, 2011.

However, the amendment will still implement the MDS 3.0, concurrent therapy adjustment, and changes to the look-back period to ensure that only services provided after skilled nursing facility admission are counted toward RUG placement on October 1 of this year.

"The RUG-IV delay is not certain yet, but we will know more as the budget reconciliation process unfolds and expect an answer within the next few days," McCarthy says. "In my opinion, the RUG-IV delay is not a cost saver, and that a delay in the implementation of RUG-IV is unlikely, but we don't have any concrete information at this time."

McCarthy says long-term care faces challenges, but she is hopeful that it will continue to adapt.

"In my opinion, reform will be a hurdle for long-term care facilities and providers. While there will always be a need for nursing homes, healthcare reform does ultimately encourage greater usage of home care services or other residential options," McCarthy says. "But overall, this bill, and the spirit with which it was written, is good for everyone, because its main goal is to increase the number of insured substantially and improve both quality and access to care. The long-term care sector has proven their adaptability in the past, and I am certain we will see that in these changing times as well."

MacKenzie Kimball, for HealthLeaders Media, March 23, 2010
MacKenzie Kimball is an associate editor in the long-term care market at HCPro. She writes PPS Alert for Long-term Care and manages MDSCentral.

TSH Editor's Note:
While this Post is not necessarily about technology, it certainly does underscore the fact that homecare will begin to offset congregate living settings as a modality of care for many more of us as we age. This fact of course means that technology will play an ever more important role in the home-based setting. Smart Homes, remote monitoring, tele-homecare, and virtual visit technology will become part of the mainstream of healthcare information technology. To see the most current examples of the state-of-the-art in this field plan to attend the American Telemedicine Association's (ATA) Conference in San Antonio May 16-18.