The Patient Protection and Affordable Care Act is projected to generate $500-billion in Medicare savings by ending overpayment to Medicare Advantage plans and some reduction in provider payments. The provider payments are to be reduced by increased efficiency in the Medicare program and reducing the inflationary payments to providers.
Skilled nursing facilities, home health agencies, inpatient hospitals, hospices and other Medicare providers will see a 1-percent reduction in their annual Market Basket (inflationary) updates in 2011 through 2104. At the same time, rural home health care providers will see higher payments. Home health agencies, nursing homes, and ambulatory surgical centers will be required to implement Medicare value-purchasing programs, which will act to further reduce costs for the Medicare program.
The aim of these new provisions, in addition to streamlining provider payments, is to address the long-term care needs of all Americans and to shift or rebalance Medicaid payments from institutions to home and community-based care.
The new health care law establishes the Community First Choice Option, which creates a new state plan option under Medicaid to provide community based attendant supports and services to individuals with disabilities who are Medicaid eligible and who require an institutional level of care. Services would be provided based on a functional needs assessment. States are freed from expenditure caps currently applicable in Home and Community based waiver programs. States that choose the Community First Option will be eligible for an enhanced Medicaid match rate of plus six percentage points for reimbursable expenses in the program. States will have the option of providing coverage for attendant services necessary to assist eligible individuals with activities of daily living and other related tasks.
States will also be able to use the funds to transition individuals from nursing homes in a number of ways, including; first month's rent and utilities, rent and utility deposits, basic kitchen supplies and other necessities that would facilitate the individual's transition from institutional to "at home" care.
These provisions goes into effect a little over a one year from now, October 11, 2011. For more information CLICK HERE.
Tomorrow: Part Two...Class Act & Money Follows the Person Rebalancing Demonstration