Senate Panel Acts Against HMO Home Health Care Cuts

TRENTON –The sudden attempt by Horizon NJ health, one of the largest HMO’s in New Jersey, to reduce payments for home health care services prompted action by a Senate committee on Monday when it approved legislation that would require HMO’s to justify any such cuts and get approval from the state Department of Human Services.

The hearing drew a broad contingent of groups, organizations and individuals directly involved in the increasingly-important work of providing home health care services. Their testimony focused on the negative impact the reductions could have on the availability and quality of in-home services.

“Home health care is a service that allows patients to remain in their homes and their communities, living with family and staying involved with friends and community activities,” said Senate Majority Leader Loretta Weinberg, a co-sponsor of the bill. “It can make the difference between living at home or going into a nursing home.”

The Senate Health, Human Services and Senior Citizens Committee unanimously voted out S-2241, requiring managed care organizations that participate in the Medicaid program or NJ Family Care to demonstrate a justifiable need for the reduced payments and show that the cuts wouldn’t harm the quality and availability of home care. They would also have to show that they have taken all steps possible to find savings elsewhere, such as unnecessary administrative costs and fraud. The measure would also require a public hearing, so that patients, home aides, service providers and anyone else affected by the change would be informed.

“Supporting home care is not only the compassionate thing to do, it is the smart thing to do,” said Senator Joe Vitale, a co-sponsor of the bill and chairman of the health committee, who pointed out that the lion’s share of Medicaid dollars is used for nursing home care. “We want to make the most effective use of Medicaid spending. Quality care in nursing homes is a priority but patients should be allowed to remain in their homes if they want and if they are able.”

In September, Horizon unilaterally informed home care providers that the managed care company would cut reimbursements by 10 percent, from $15.50 per hour to $13.95 per hour. Horizon later said it would reduce the amount of the reduction. The average wage for the approximately 30,000 personal care aides working for about 170 agencies in New Jersey at the current reimbursement rate is $9 to $10 per hour – which results in less than $20,000 annually for full-time work.

Speaking in support of the bill were service providers, home health aides, and numerous health care organizations and advocacy groups, including: The Home Health Services and Staffing Association of NJ; Accredited Health Services; 1199 SEIU United Healthcare Workers East; The Home Care Council of New Jersey; The New Jersey Hospital Association; The Home Care Association of NJ; The Health Providers Association of NJ, Voorhees Pediatric Medical Day Care and Broadway Home Care & Respite.

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