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Gazing Into a Crystal Ball

October 1, 2004
by root
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Is that home- and community-based services we see rising ahead? by Alan E. Schabes, Esq.

"...and, furthermore, I don't want to see your face in my office until the research report is finished!"

The door slammed behind the young healthcare analyst at a prestigious investment bank in New York City. Several weeks before, the analyst's supervisor had assigned him to draft a definitive research report for his firm on the future of the long-term care and home healthcare industries. He tried to obtain that definitive information but was stymied by the often confusing and conflicting information available. Disheartened, and facing an abrupt end to his once-promising and financially rewarding career, the young man decided to take an early lunch to figure out how he could get out of this mess. As he walked down the street, he was drawn to a storefront that he passed by hundreds of times before without giving it a second glance. The sign in the window read:

Deciding that he had nothing to lose, he stepped inside. The dark, musty room smelled odd-a mixture of burning incense and garlic. Next to a small table covered by a dirty tablecloth sat an overweight elderly woman. "Yes, can I help you?" she asked. He hesitated for a moment and nodded his head warily.

"I can see that you are deeply troubled," she said in a mixture of indefinable foreign accents. Again, he nodded in agreement and then stammered out his woebegone story: the research project...his inability to get clear and consistent information...his total frustration...and, most importantly, the possible end to a lucrative career.

She solemnly tipped her head and replied, "You have come to the right place. Please sit down. I can help you, but it will cost $250." He reluctantly agreed. She placed a small crystal ball on the tabletop, uttered a strange incantation that sounded like a cross between Hungarian and Chinese, and waved her hands frantically over the crystal ball. Closing her eyes, she began to speak: "I can't help you very much with long-term care. You have to be a real prophet to figure that area out, and I'm only a master fortune-teller. However, home health is easier, so sit back and take some notes." The young man listened attentively.

"To see the future, you must be aware of the past," said the fortune-teller. "The story begins with the Balanced Budget Act of 1997. In the three years following its implementation, the number of Medicare beneficiaries who received home health services annually dropped by about 1,000,000 individuals, or nearly 30%. MedPAC [the Medicare Payment Advisory Commission] estimated that in 2001, which was the first calendar year after the home health Prospective Payment System was instituted, an additional 300,000 beneficiaries lost their home health services. In fact, MedPAC found that hospital discharge planners observed that hospitals were taking special measures to provide rural beneficiaries with home care, to the point of even renting hotel rooms or housing patients on a temporary basis in apartments that were owned or rented by the hospitals," explained the gypsy.

The young analyst was impressed. Thinking that she really might be able to give him sound advice, he took a notepad from his jacket and began to scribble furiously.

She continued: "The tide began to turn with the Olmstead case that was decided by the United States Supreme Court on June 22, 1999. The Supreme Court held in Olmstead that some persons with disabilities in institutions may have suffered discrimination under the Americans with Disabilities Act of 1990 [ADA] by being deprived of an opportunity to live in the community. The Olmstead court stated that the ADA did not mandate deinstitutionalization," she explained, "but the Supreme Court set forth three conditions for community placement: (1) the state's treatment professionals must reasonably determine that community placement is appropriate; (2) the person seeking placement does not oppose such placement; and (3) placement can reasonably be accommodated taking into account resources available to the state and the needs of others receiving state-supported disability services."

The fortune-teller gave a heavy sigh, and began chanting and waving her hands over the crystal ball. With a twinkle in her eye, she explained that the globe was growing dim and she had to reboot. Her gaze resumed its intensity:

"Back in 1981, Congress established the Home and Community-Based Services Waiver Program that authorized a state's use of Medicaid funds to pay for home- and community-based services for individuals who would otherwise require services in a long-term care setting. While the waiver program allowed the states to have discretion in determining what populations would be served and which services would be allowed, the waiver program also required that the cost of providing home- and community-based services must be cost-neutral to receiving services in an institutional setting, and it also required that room and board are not to be covered by Medicaid. Now, in February 2001, President Bush announced the New Freedom Initiative, which was aimed at promoting full access to community life through efforts to implement the Supreme Court's Olmstead decision. The initiative consisted of a governmental framework to help provide elders and people with disabilities with the necessary support to live and participate in community life.