Health providers study reform law to judge effects
By Nelson Sigelman
Published: March 25, 2010
On Sunday evening, in a historic 219-212 vote, the House of Representatives passed a $940 billion health care bill that will be implemented over 10 years.
Exactly what the 2,400-page bill will do is a heated topic of discussion among lawmakers, health industry analysts, and the general public. It is also generating considerable work for lawyers and consultants hired to interpret the bill.
The legislation's major provisions would extend health insurance coverage to an estimated 32 million Americans who are now uninsured, prohibit insurers from capping benefits for sick patients or from rejecting coverage for people with pre-existing conditions, and create health insurance exchanges for people to purchase affordable coverage.
Massachusetts already requires many of those benefits. As a result, the full impact of the health care vote remains unclear for Massachusetts residents, businesses, and health care providers.
At the VNA
The Vineyard Nursing Association is a nonprofit home healthcare agency that provides care for patients and families in at-home settings.
In a telephone conversation Tuesday, Robert Tonti, VNA chief executive, said he is trying to assess the impact passage of the health care bill will have on his agency.
The day after Sunday's historic vote, Mr. Tonti said he called the Homecare Alliance, a state association of home healthcare providers. "And I said, okay what does this mean?"
Mr. Tonti said the Senate version of the bill cut $35 billion over the next five years out of reimbursements for home health care services. But that was preferable to the House version, he said, which cut $55 billion. "I am better off that it was the Senate version and not the House version, but I don't know the details yet," he said.
The reconciliation process taking place between the Senate and the House this week could result in more changes. "I am optimistic that we will be treated fairly," Mr. Tonti said. "I don't think it is a boon to us in any sense. We were on a path to have our reimbursements cut, and I do not know if this means it is going to get accelerated or not."
Mr. Tonti expects that cuts will affect his agency budget; the question is by how much. The VNA budget is approximately $3 million. Medicare reimbursements account for approximately two thirds of VNA income.
Mr. Tonti said a two- or three-percent cut from Medicare translates into approximately $60,000 from his budget. "We then have to figure out how to deliver the same services on $60,000 less," he said.
The loss of that income would put pressure on fundraising. "The last thing we would do is cut services," Mr. Tonti said.
At Martha's Vineyard Hospital
Tim Walsh, Martha's Vineyard Hospital chief executive, has watched the evolving legislation very carefully. He describes it as a very complex bill and says it is unclear just what will trickle down to the Vineyard.
"The important piece for us is that we are a critical access hospital," Mr. Walsh said. "We have been recognized as having costs that are going to be higher than average by Medicare. To my knowledge that still holds true, but that is where you get a little nervous. If they started to pull back on that, it would be very difficult here."
Mr. Walsh said he is waiting to see how the legislation will unfold and how the administrative portion will be put in play. One challenge will be to extend the insurance benefit. In many ways, Massachusetts is ahead of the game, he said, because benefits already exist.
Existing state regulations may buffer the impact of the health bill. Mr. Walsh said the changes might be more dramatic in those states where there are few benefits. "It is part of why our costs are higher," he said. "We have done a lot of that prior to this. The rest of the country has to catch up."
One advantage Martha's Vineyard Hospital will have going forward is its alliance with Partners HealthCare network. "Just the depth of resources that they have can help in analyzing and understanding everything," Mr. Walsh said.
Hospice care
In December, Hospice & Palliative Care of Cape Cod (HPCCC) began operating on Martha's Vineyard as Island Hospice, in collaboration with Hospice of Martha's Vineyard and the Vineyard Nursing Association.
Reached by The Times Tuesday, David Rehm, HPCCC chief executive, had just received a review of the bill's provisions from a law firm that advises nonprofits on health care issues.
"Overall, I am essentially pleased and supportive of the bill's passage," Mr. Rehm said. "Which is not to say that I am in agreement with, or delighted with, the overall structure of the bill or a lot of what's in it. But I think it is essential that we begin a process, and I hope that's what this is, the beginning of a process to reform our health care delivery structure."
Mr. Rehm agrees that the effect on Massachusetts will not be as great as in other states. As far as how the legislation will affect hospice care by his agencies and his partners on the Vineyard, he said, "It's a mixed bag."
A program of Medicare rate reductions over a period of years will be shared by hospices. "One of our challenges will be to figure out how to manage those rate reductions over time without affecting the scope and quality of care that we provide," Mr. Rehm said. "That is a challenge that we've got, and it is something that we anticipated."
Medicare reimbursements account for 89 percent of HPCCC's income. Increased patient volume will help mitigate those reductions and was one factor in HPCCC's decision to expand its service area to include the Vineyard.
In addition to cuts in reimbursements, the bill will increase reporting requirements, adding to the administrative burden.
Mr. Rehm pointed to two demonstration projects within the bill that are of particular interest. One would allow people who elect to receive hospice care to maintain regular Medicare coverage, something they must now give up. In many ways, that would mimic the Hospice Martha's Vineyard model, which now allows that choice.
Another project that interests HPCCC is the "Home Health Independence Demonstration," which would fund a team led by a physician and nurse practitioner to provide primary care to patients at home.
"I think the portions of the bill that are creating those opportunities for sort of creative new demonstrations are the most hopeful part of this," Mr. Rehm said. "Because out of that, I think, will come the real reshaping of the way we deliver care."
