VNA campaign wins favorable ruling from Medicare to fill a budget gap

Posted November 22, 2006

The Vineyard Nursing Association (VNA) will enjoy an 11 percent increase in the Medicare reimbursement rate for the rural home health care services it provides. The increase means an additional $115,000 in 2007 and comparable increases for the Visiting Nurse Service and the home care unit of Nantucket Cottage Hospital.

"This is a great day for the VNA. It is rare for Medicare to make this type of concession, and we are very pleased that they agreed with our concerns and made the appropriate changes," Bob Tonti, VNA chief executive officer, said in a press statement released last week. "The additional monies will help offset salary increases for 2007 and offset the annual increase in operating expenses that the move from the hospital to our new location in Vineyard Haven is costing the VNA."

The worry that an earlier, announced reimbursement would leave the providers with large budget gaps stemmed from Medicare's complicated policy for reimbursing home health-care agencies for labor costs. Medicare uses salary and wage data from local hospitals as a proxy for cost information for home-care agencies - but excludes data from Martha's Vineyard Hospital and Nantucket Cottage Hospital because of special rules, according to Mr. Tonti. The exclusion left Medicare without relevant data to use in setting reimbursement rates for the Islands' home-care groups. Instead, it simply assigned the previous year's reimbursement rate - a number that skewed low and which did not take into account the realties of day-to-day cost of operations for rural home health agencies on Nantucket and Martha's Vineyard such as the VNA. Medicare had followed the practice for two consecutive years.

The VNA appealed the Medicare reimbursements. In November 2005, when Medicare rejected multiple arguments to raise reimbursement rates for home health care agencies operating in rural Massachusetts, VNA enlisted help to change Medicare's policy. Over the course of the next year, Mr. Tonti worked with Tim Burgers and Pat Kelleher of the Home Care Alliance of Massachusetts, Stacey Sachs in Senator Kennedy's office and Neva Flaherty in Congressman William Delahunt's office to lobby Medicare to reconsider their ruling.

According to Mr. Tonti, "Little progress was made, however, until Bob Wardwell of the Visiting Nurse Association of America (VNAA) arranged for a pivotal meeting with Medicare at their headquarters in Baltimore, Md.

"We were able to plead our case firsthand and also gained an understanding of what arguments ultimately might fly," said Mr. Tonti, who attended the August 2007 meeting with Mr. Burgers.

Prior to making its final decision, Medicare received written comments from the Vineyard Nursing Association, the Home Care Alliance of Massachusetts, the Visiting Nurse Association of America, the National Association of Home Care and Hospice, Congressman Delahunt, Senator Kennedy, Martha's Vineyard Community Services, and the Nantucket Cottage Hospital.

"In the final analysis," said Mr. Tonti, "Medicare accepted the VNA argument that the best way to provide relative salary and wage data that would be most representative of the rural counties in Massachusetts would be to look at data from counties contiguous to Martha's Vineyard and Nantucket. Medicare agreed, and ended up increasing reimbursement rates by averaging the salary and wage data from Barnstable and Bristol counties.

"I am very grateful for the support the VNA received from our congressional delegation and our industry associations. They were very active on our behalf and we could not have been successful without them."