Industry Groups Working to Protect Rural Safeguards

Monday, April 16, 2018


Most people who live in rural areas will happily tell you about the virtues of living in such areas: the fresh air, the open space, the distance from many of the problems that plague more urban areas. However, living in rural America isn’t without its challenges, especially when it comes to healthcare.

Ensuring that those living in rural areas have access to healthcare has been a major priority for some time. For the elderly in particular, those living in rural areas tend to be older, sicker, and poorer than others in more urban areas, and thus need more home health care services than others. Medicare’s home health benefit is vital to many of these patients, who cannot easily access healthcare services, and need providers to come to them. In fact, according to research by the Moran Company, most rural Medicare beneficiaries have to travel twice as far to get to a hospital, meaning that home health care is even more vital in the effort to reduce unnecessary hospitalizations and ensure that they receive the care they need.

Of course, if patients have to travel great distances to see providers, providers have to travel great distances to see their patients. In a rural state like Maine, for example, providers travel an average of 35 miles between visits — compared to 10 miles or less in more urban areas. Since many home health providers drive their own vehicles, and receive a mileage reimbursement for the fuel and wear and tear on their vehicles (which can be significant due to driving on poorly maintained rural roads), transportation costs comprise a significant percentage of many rural home health agencies’ budgets; one organization in Vermont estimates that transportation costs represent at least 30 percent of the expenses, for example.

For nearly two decades, lawmakers have recognized the financial burden that working in rural areas places on home health agencies, and provided a “rural safeguard” payment to agencies located in specific geographic areas. This 3 percent additional payment has been renewed at least five times since its inception in 2000, but it is now in danger of being cut as part of the Trump administration’s budget.

Industry Response

The rural safeguard payment expired on December 31, 2017, and has yet to be acted upon by Congress in terms of renewal — something that has HHAs and industry groups concerned. The travel cost per episode in rural areas is 36 percent higher than that in non-rural areas ($229 v. $168) meaning that most rural agencies are already operating on slimmer margins than their urban counterparts.

Industry experts say that removing the rural safeguard would further destabilize an industry that is already somewhat precarious. In some areas, such as rural southern California, home healthcare agencies have already stopped serving patients who aren’t located within an hour’s drive of the agency, as it is too costly to travel to those areas. Without adequate Medicare reimbursement, more rural agencies are likely to close their doors, leaving patients without many options. It’s likely that many will be forced into nursing homes or face repeated hospitalizations, increasing the overall costs to Medicare.

As a result, many industry leaders are calling on lawmakers to renew the rural safeguard payments. Keith Myers, chairman of the Partnership for Quality Home Healthcare, wrote in an editorial in The Hill, “I urge Congress to quickly pass the crucial Medicare extenders package, including the home health rural safeguard provision. If we wait any longer, we risk the quality, uninterrupted home health care our most vulnerable American seniors deserve.”

Fawn Barrie, executive director of the Oregon Association for Home Care, echoed those sentiments in an editorial in The Oregonian. “I strongly urge Congress to extend the rural safeguard so that rural Medicare beneficiaries — like their urban counterparts — can access high-quality, cost-effective home healthcare allowing them to remain at their home as they age… Congress can protect home-based care for rural seniors by doing what they have done for nearly 20 years: Ensuring the Medicare home health rural safeguard is extended beyond this year.”

In the meantime, rural home health agencies need to take steps to ensure that they can withstand the impact of the rural safeguard being eliminated. Investing in personal care services and software that has the capability to more efficiently schedule employees can help reduce travel time and expense. Efficiently planning routes and patient visits can allow your employees to spend less time on the road and more time seeing patients.

Stay tuned to this space for updates on this and other important issues facing the home health industry. And be sure to check out Complia Health’s resources and products to learn more about how state-of-the-art personal care services can help you run your agency more efficiently and productively, while reducing costs.