HCA Testifies at Joint Senate-Assembly Budget Hearing

Download: HCA's Statement in Response to the 2010-11 Executive State Budget

For Immediate Release: February 9, 2010
Contact: Roger Noyes (518) 810-0665; (518) 275-6961 cell

HCA Budget Testimony: $155M More in State Budget Cuts Would Sideline Home Care System Already Jeopardized by Prior Year Cuts

Home Care Association of New York State (HCA) Board Member Michelle Mazzacco, Vice President/Director of Troy-based Eddy Visiting Nurse Association (VNA), today delivered testimony on behalf of HCA before a joint hearing of the Senate Finance and Assembly Ways and Means Committees where she described the impact of $155 million in proposed state budget cuts on a home care system already destabilized by over $300 million in cuts just since April 2008.

Due to past cuts, chronic underinvestment and unfunded mandates, an astonishing 67 percent of New York home care agencies are already operating in the red as of 2007, according to the most recent data available, with the threat of greater fiscal instability looming under further cuts proposed by Governor Paterson.

Ms. Mazzacco's agency, the Eddy VNA, serves an average of 1,300 patients at home on any given day in five Capital Region counties. Her testimony described patients at the Eddy whose cases represent the kind of cost-effective in-home care that would be severely jeopardized by $155 million in further cuts to Medicaid.

One patient, age 55, has Guillain-Barré syndrome, a sometimes fatal disorder in which the immune system attacks the patient's peripheral nervous system, resulting in severe muscle weakness and/or paralysis. She also suffers from chronic obstructive pulmonary disease, type 2 diabetes, hypothyroidism, and sleep apnea, has a tracheotomy, is on continuous oxygen and is morbidly obese. Having been on the Eddy's home care service for three years, the patient has had just one hospitalization, for pneumonia.

"Today, my agency serves patients with increasingly complex clinical needs at home," Ms. Mazzacco said. "Without home care, most of these patients would be hospitalized more often, experience much longer hospital stays, and would more likely need nursing-home care as their health, cognitive, or physical condition deteriorated — all at a much higher cost to Medicaid."

"Yet in spite of home care's proven cost-effectiveness, and its success in managing complex health conditions, a legion of past Medicaid cuts has left many providers in dire economic distress," Ms. Mazzacco said in her testimony. "Not only has home care been inflicted with $320 million in Medicaid cuts during the past two years, but home care operations have been further saddled by new unfunded mandates and taxes that alone are costing agencies about $65 million per year statewide." This amount is equivalent to a 3.6-percent Medicaid cut when factoring $65 million as a share of home care's overall streamlined operating cost picture.

Ms. Mazzacco also shared the findings of a home care fiscal-conditions report recently issued by HCA and the New York Association of Homes & Services for the Aging (NYAHSA), entitled Lethal Doses, which finds that an astonishing 67 percent of home care services agencies in New York State are now operating in the red, due to chronic underpayment by the state, budget cuts, and unfunded mandates.

Among the Lethal Doses report's other key findings:

• 75 percent of county-run agencies are operating in the red (many of these are the sole community provider in their region);
• Long Term Home Health Care Programs — which serve nursing-home-eligible patients in need of long term care at home — saw their operating losses rise 65 percent from 2004 to 2007;
• 44 percent of home care agencies must borrow money to meet operating expenses; and
• 44 percent of home care agencies would be "likely" or "very likely" to close under an additional five-percent cut.

"These findings paint a grim picture, revealing that chronic disinvestment in home care threatens home care's role as a safety net," Ms. Mazzacco said.

A copy of Lethal Doses, which contains a number of other key findings, is available at www.hca-nys.org/lethaldoses.pdf.

Ms. Mazzacco also noted that HCA has already offered alternative, constructive Medicaid cost-savings proposals for the Governor and Legislature to consider in place of blunt reimbursement cuts. These proposals are part of HCA's "Home Care Accessibility and Efficiency Improvement Act" (HCA-EIA, S.5179), sponsored by Senator Craig Johnson (D-Port Washington). S.5179 would generate significant savings for Medicaid through home care program enhancements, regulatory reforms, and initiatives to realign health care financial incentives, among other components of the 33-provision bill.

Three HCA-EIA provisions were included in the Governor's 2010-11 proposed budget, though these proposals are merely a few of many HCA-developed ideas for implementing constructive cost-saving enhancements that could avert the need for further cuts, Ms. Mazzacco noted.

"Unfortunately, this budget is disproportionately weighed with proposals seeking to slash rather than to create or change," Ms. Mazzacco said. "Together, through cooperation, we can develop sound policies that solve today's pressing fiscal needs, promote long-term efficiencies rather than prolonged fiscal ruin for our health care system, and continue to care for patients in the most appropriate setting at the right cost."

A copy of Ms. Mazzacco's testimony is available here.