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Archive for Thursday, November 27, 1997

VNA FACING BUDGET SHORTFALL

November 27, 1997

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The Balanced Budget Act will cut $115 million from the Medicare budget, but home health agency representatives said it will be at the expense of patients.

The Douglas County Visiting Nurses Assn. is facing budget uncertainties due to the federal Balanced Budget Act, forcing the association to freeze salaries starting next year and to consider more drastic measures.

Marceil Lauppe, executive director of the association, said up to $200,000 in Medicare reimbursements may be cut from the association's budget in 1998 because the federal legislation is changing the reimbursement formula.

"Our reimbursements will be considerably less than they have been in the past, and we won't know until April what the effect will be," Lauppe said.

Home health agencies depend heavily on the Medicare money, and the VNA will receive an estimated $1.996 million of its $3.4 million budget through Medicare by the end of this year. With the Balanced Budget Act basing next year's figures on 1993 costs, Lauppe expects the shortfall to be at least $220,000.

According to the act, per-person Medicare reimbursements for 1998 might not be released until April. The act calls for $115 billion in cuts to the Medicare budget over the next five years. A new provision is a yearly cap on what Medicare will pay for each person seen at home. VNA's 1998 budget was set months before the Health Care Finance Administration, which regulates Medicare, set the cap.

The Balanced Budget Act also covers changes in Medicare reimbursements to hospitals and hospice associations and includes anti-fraud and abuse legislation.

Without concrete figures to act on, the VNA board hasn't made any decisions besides the salary freeze.

"The fact remains that we have to cut our budget without knowing how deep those cuts have to go. We definitely will be forced to do business differently," Lauppe said.

"We have to look at a new environment and have to look at different ways to deal with that environment," she said.

The VNA is not alone in the budget crisis, said Linda Lubensky, executive director of the Kansas Home Care Assn. based in Lawrence. The association has 237 members from more than 300 home care agencies across the state.

Lubensky said agencies similar to VNA could be seeing a 17 percent drop in their budgets, forcing them to lay off employees, cut services and see fewer patients. Home health agencies provide medical staff to people recuperating from strokes, surgery or other conditions in their homes.

Rural areas served by small home health agencies will be hard-pressed to obtain a $50,000 surety bond by Jan. 1, as outlined in the new legislation, Lubensky said. The agencies will have to show they have that much collateral to obtain the bond, which is required in the event that the agencies are required to pay back Medicare payments due to abuse.

Diabetics and others recovering from surgery who required daily or weekly blood tests won't have their home "venapunctures" covered anymore, Lubensky said. Many of these people will probably find programs that are paid through state money, causing a bigger burden on state taxpayers.

"We're looking at some really serious problems," she said. "There's still a lot of denial, and a lot of agencies haven't even begun to look at the problem. The smart agencies have."

Lauppe said the VNA's board is closely watching the situation and may have a special meeting in December. She doesn't anticipate the changes to force the organization, which has been in Douglas County since 1969, to close.

"We've hit rough times with Medicare before, and we've always figured out what to do," she said. "We plan to get over this hurdle and serve the community."

-- Chris Koger's phone message number is 832-7126. His e-mail address is koger@ljworld.com.

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