Tag Archives: Medicaid

Fixing Home Care: Low Wages for Home Health Aides a Complex Issue

Baby Boomers are retiring at a startling rates and their need for long-term care at home is causing the health care industry a host of problems.  The biggest of which is a shrinking workforce especially among home health aides.

The problem of finding people to work as home health aides involves a number of factors. These jobs are often low paying with some working for as low as $8.50 an hour without benefits.  It’s a shockingly low rate of pay considering the amount of responsibility a home health aide has. In fact most those who use long-term care services in their home depend on home health aides for everything from basic household chores to medically necessary treatment needed on a daily basis. In the case of the frail elderly the lack of care could have dire consequences.

Take for example an Elderly Lady in Ithaca, New York who according to the local newspaper had to go to the hospital because she lacked the home care support she needed.

An elderly, wheelchair-bound Tompkins County woman says she was left for almost two months without the home care aide she needs.

Lane Woods, 68, of Trumansburg says this isn’t the first time this has happened. A six-week stint without an aide when she lived in Niagara County ended with her being sent to the ICU due to the strains of caring for herself and maintaining her home without assistance.

The paper goes on to site several local officials who blame the shortage of home health aide workers for the limited access to home care services.

What is playing out in New York is happening all over the country as baby boomers and their children struggle to met the challenges left by increasing health care demands.  The elderly often depend on home health aides to provide care when family or friends are at work.  The shortage leaves many of the frail elderly to fend for themselves at home often with disastrous results.

Adding to the problem of low pay is the breakneck increase in demand for home based services.  According to a 2013 report by the U.S. Bureau of Labor Statistics, Personal Care Aides, Home Health Aides and Nursing Assistants are job categories projected to see an over 48% increase in job openings by 2022.  Those three segments combined, all of which are employed by the home care industry, will make up the nations second largest workforce with 4.8 million laborers by 2022.  Only the retail workforce is larger.

Government Still Part of the Problem

Now before you start beating the drum for government mandated pay increases you should consider that increasing the hourly rate is only part of the problem.  During 2015 various states around the country have begun mandating wage increases for home care workers.  A good first step but only half the problem.

In an effort to keep up with the increased cost of health care delivery, Medicare and Medicaid have been making deep cuts in reimbursement over the last five years. The most recent is scheduled to take place in 2016 and will slash $350 million from the Medicare budget.  The latest cost saving measure by the government adds to the $60 million in cuts that took effect just this year. Medicaid has seen similar cuts in recent years although those vary by state.

That leaves home care companies struggling to find away to deal with pay rate mandates while receiving less in reimbursement.

Lack of Coverage

Medicare only covers short-term home health care based on acute need often of only an hour or two a day for duration of 60 days.  But what happens to the frail elderly who need services for longer than Medicare based insurance coverage can provide. Those patients are often left without access to the care needed to help them age in pace at home. Rather the lack of care often ends like our lady from New York with a trip to the hospital and possibly a nursing home.

For patient to receive long-term home health care they often have to pay out-of-pocket or depend on local aging services agencies to provide subsidized care (often funded by Medicaid). But decreasing reimbursements and program cuts make access to care provided through these agencies difficult at best with most having to spend time on a waiting list before funding is available.

Fixing the Problem

Such a complex problem requires a dynamic solution.  Policymakers and health care industry leaders must come together and develop ways to provide access to quality care for those who need it most our frail elderly. Of course cost will be a factor which means compromises both government agencies and the health care industry will have to make sacrifices. The home health care industry will have to accept some additional regulations in order to combat fraud and waste and the government will have to increase its efficiency in processing and reimbursing claims.

The Fischer Report will not just present a problem without a solution. That is why we are starting a series of articles called Fixing Home Health Care where we will spotlight ways the public and private sectors are working together to solve the health care crisis for our seniors and forward new ideas that could help in the future. Hopefully it generates the discussion about how we can better care for our elderly.

Michigan’s Medicare Fraud Problem Caused By Lax Home Care Regulation

Michigan Lags Behind Other States In Home Care Regulation

Home Care services will play a key role in the ever-changing healthcare system.  With an avalanche of Baby Boomers nearing retirement age, the healthcare system is desperate for services that provide quality care cost efficiently while keeping patients from making costly emergency room visits.

Baby Boomers are also demanding more innovation and service improvements in healthcare just as they have of every other service they have consumed. Skilled Home Care, Hospice and Telemedicine have proliferated as a result.  So much so that lawmakers and policy wonks in Washington are expecting a dramatic increase in Home Care utilization over the next decade.

So what’s holding the rapidly growing home care industry back? Fraud.  New companies have sprung forth to meet demand with many founders having little to no experience in healthcare service delivery. Without the proper expertise to compete by providing quality service, owners turn to fraudulent schemes to make ends meet.

As a deterrent to fraudulent behavior the FBI has made a public spectacle of Medicare fraud busts.  The FBI press releases have had their intended effect but they have also had the unintended consequence of deterring patients form using the service.  That combined with the reluctance of doctors to refer to potentially fraudulent providers has slowed the development of this much needed service.

Falling Short

Most states have faced the fraud problem head-on by requiring companies to apply for a state license in addition to the federal Medicare license.  The extra requirements have served as their own deterrent to Medicare fraud.

Still there are four states in the union that don’t require any additional licensing to operate a home care company.  Michigan, Ohio, Iowa and Massachusetts all refrain from further regulating the home care industry. To their credit Ohio and Massachusetts require additional licensing for the professionals that work in the industry.  However Michigan Home Care Companies remain the least regulated and companies in the state remain a major target of the FBI’s Medicare fraud task force.

A Hot-Bed Of Activity

mcquade
Barbara MCquade, US District Attorney, Eastern District

Since 2013 the FBI’s Medicare Fraud Task force has indicted more than 70 Michigan healthcare professionals for medical fraud worth over $410 million. Even the FBI has noticed that southeast Michigan has become a hot bed for fraud activity.

“For whatever reason I think Southeast Michigan has become an opportune area to operate in,” said F.B.I. Special Agent in Charge Andy Arena. “That’s what this task force is trying to show. That this is not the place to be. Get out.”

The Reasons Fraud Runs Rampant In Michigan

Owners Lack Health Care Service Experience

The increase in fraud could have something to do how easily an entrepreneur can open a home care agency in Michigan. Even with little to no knowledge of the healthcare system.  Potential owners can also obtain a license to operate a home care at a relatively small cost. Normally expensive costs like labor can be purchased cheaply through contractual agreements with payment deferred until after the operator receives the license.

This year the federal agency overseeing Medicare and Medicaid reimbursement (CMS) finally issued a moratorium on new home care licenses. However the move comes after many fraudulent companies are already in operation in Michigan.

Infrequent Inspections

Another factor contributing to fraud is the infrequency of home care regulation provided in the current system.  Federal Medicare regulations require that licensed home care agencies be inspected

Photo Courtesy www.FreeDigital Photos.net David Castillo Dominici
Photo Courtesy www.FreeDigital Photos.net David Castillo Dominici

every two years. The Centers for Medicare and Medicaid Services (CMS) depend on third-party regulators to facilitate the survey process. Organizations like the Community Health Accreditation Partner (also known as CHAP) and the Joint Commission provide professionals to conducting inspections.  Although all inspectors receive training a shortage of inspectors often puts the process behind schedule.

The gap between inspections (known in the industry as surveys) opens a window of non-compliance with agencies able to ignore regulations without fear of inspection.  During this time agencies often go without key staff like Qualified Administrators, Clinical Directors, Medical Directors and key office staff to cut overhead cost and squeeze more profit out of the bottom line.  This practice adversely effects care and lowers the inter-agency accountability.  Without key healthcare professionals taking an active part in the company, owners often cut corners and open the door for fraud.

Not A Small Problem

The fraud problem isn’t limited to small companies or start-up companies.  Large companies with years of experience have also fallen into fraudulent habits either through malicious intent or negligent.

More regulation, especially in Michigan can help stem the tide of fraudulent behavior. Additional state licensing, requiring licensed administrators and an increase in inspection frequency can help fix a horribly flawed system.  For now consumers should make themselves aware of the warning signs of Medicare fraud as well as asking their lawmakers to increase home care regulations.

The cost efficiency of home care service can go along way to saving the healthcare system.  Until fraud is rooted out however the American taxpayers will have to foot the bill for billions of dollars in increased healthcare cost.