Posts Tagged ‘home health aides’

Home Health Agency Declares Bankruptcy, Blames Medicare


Home health care benefits available through the Medicare program have been curtailed in recent years. The effect of the government’s crackdown on home health care costs has been felt not only by patients, but also by health care providers themselves.

Take, for example, the case of Idaho’s Community Home Health agency (CHH). The company had been serving about 500 patients. Then Congress passed the Balanced Budget Act of 1997, directing Medicare to set limits on the costs which could be paid through for home care.

CHH, like other Medicare providers, had been paid a monthly amount based on an estimate of the number of patients it would see. These “periodic interim payments” would then be adjusted for the amount actually due the agency, with a smaller amount either paid or withheld from future payments once the bookkeeping was completed.

With the new law, however, CHH decided that it would not be able to serve the same number of patients. The agency dramatically cut its Medicare caseload in an attempt to anticipate the new government regulations. Its income would be slashed, but its costs would also be contained—or at least that was the theory.

Unfortunately, the agency continued to receive and cash checks based on its prior caseload. By the time CHH figured out it had a problem it had received overpayments of more than one million dollars. The agency told Medicare it needed to set up a plan to repay the money over time; Medicare first denied that there had been any overpayment, then threatened to withhold all payments until the account was corrected.

Although Medicare relented and offered a two-year repayment plan, CHH closed its doors and declared bankruptcy. Agency owners Gary and Verlene Kaiser, who had personally guaranteed CHH’s debts, also filed for bankruptcy. Meanwhile, Medicare investigators were allegedly telling other providers about the Kaisers and CHH, making it difficult for them to do any future business.

The Kaisers sued the government and Blue Cross of California, the “fiscal intermediary” which had handled CHH’s Medicare reimbursements. The Ninth Circuit Court of Appeals threw the lawsuit out, ruling that CHH and the Kaisers had to make their claims through Medicare’s administrative channels. The part of their claim alleging defamation and invasion of privacy was simply dismissed, since the government must give its consent to be sued. Kaiser v. Blue Cross, October 28, 2003.

CHH’s story provides a cautionary example to other providers. While government programs may provide a reliable cash flow, changes in the benefits can have a huge and unpredictable effect on the provider.

Estate Recovery

JUNE 13, 1994 VOLUME 1, NUMBER 29

A nursing home resident may qualify for and receive ALTCS benefits even though she owns a home and other exempt assets. Upon the death of the unmarried nursing home resident, however, the state may have a claim against the recipient’s estate for recovery of benefits paid during her life. When Congress made changes to the Medicaid program last fall, they included a provision that requires states to actively seek reimbursement from the estates of deceased recipients.

Congress specifically suggested that states might seek to recover from joint tenants and others who receive property by virtue of the death of recipients. Arizona has graciously declined to accept Congress’ suggestion.

According to new regulations just adopted in Arizona, the “estate recovery” program will pursue only those assets constituting the probate estate. This means that assets held in joint tenancy, or accounts naming a beneficiary, will not be subject to estate recovery. It also means that some planning options, such as sale of the elder’s residence to younger family members while retaining a life estate, will be even more attractive under the new rules.

The estate recovery program will most often be important with reference to the elder’s family home. Of course, transfer of a remainder interest (or transfer from the elder’s name into joint tenancy with children) will cause other problems. Either the transfer must be compensated at its fair market value (generating cash which will cause eligibility problems until it is spent) or it will result in a transfer penalty period. Still, planning options are increased, particularly for married applicants and for those who placed property in joint tenancy years ago.

Home Aide Shortage

Wall Street Journal, June 1, 1994

“Work-family juggling acts are being upset by a shortage of reliable home health aides.

Rising demand for aides to care for aged, disabled or ill people in their homes has made it the nation’s fastest-growing job, the Labor Department says. But poor pay and benefits and the hard tasks required are breeding shortages and turnover as high as 50% in some regions.

Just as child-care problems erode productivity, a tardy or absent home health aide can force those who oversee a family member’s care to miss work. ‘It’s a very serious issue for employed caregivers,’ says Barbara Lepis, director of the Partnership for Elder Care, a nonprofit consortium of 10 employers and the New York City Department for the Aging. Even if they get to work, family members may have to ‘spend all their time on the phone, patching together something for mom,’ she says.

When Elizabeth Kutza’s aged father moved in with her, she spent most of one summer at home because she couldn’t find a home health aide. The first person she hired quit after one day, and others were unable to lift her father or lacked transportation. She finally found someone to work part time. ‘I got almost nothing done. I was a nervous wreck by the end of the summer.’ says Dr. Kutza, director of Portland State University’s Institute on Aging. Qualified aides ‘are not easy to find and not easy to keep.’

Home care agencies, which have grown by nearly 50% in the past five years, can reduce turnover by screening and training aides, but many charge an hourly fee of several dollars that is added to the $4.25 to $8.50 an hour received by aides. Members of the National Association for Home Care, a Washington, D.C., industry group, are studying techniques to reduce turnover, among them improving benefits, including child-care aid.”

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