Senate Finance Committee Hearing on Health Care Delivery Innovations spotlights urgency of protecting U.S. Nursing Home Patients, Providers from $782.3 million Sequestration Cuts

WASHINGTON, May 23, 2012 /PRNewswire-USNewswire/ -- The Alliance for Quality Nursing Home Care praised the U.S. Senate Finance Committee for holding today's hearing on health care delivery innovation, and said the testimony by Kindred Healthcare CEO, Paul Diaz, was highly pertinent because he emphasized that ongoing post-acute care innovations that help achieve Medicare spending efficiencies and improve patient care are specifically contingent upon fostering stability in a health sector already inundated by a series of recent Medicare cuts.

"We commend the Senate Finance Committee for holding today's important hearing because it provides a high profile forum for our sector to articulate how increasing economic instability through more Medicare cuts will lead to decreasing our ability to bring about desired reforms that help patients, help taxpayers and benefit the public good," stated Alan G. Rosenbloom, President of the Alliance for Quality Nursing Home Care (AQNHC). Kindred Healthcare is a member of the Alliance.

While highlighting various healthcare delivery innovations achieved by Kindred, Diaz urged in his prepared testimony for the Committee "to consider the impact of additional payment cuts—including the impending 2% sequestration cut to Medicare payments beginning in January 2013 and continuing for 10 years—on our ability to continue the kinds of innovation pilots I have described today. Innovation requires stability, and more payment cuts will cause a level of instability that I fear will prevent the kind of innovation needed to transform our healthcare system." (Full text of testimony avail at www.finance.senate.gov  )

Diaz also observed that today's current "silo-based" healthcare delivery system "results in a lack of coordination among providers, confusion about how to transition patients, when to transition, what is the most appropriate setting and how to continue the care in a seamless way from provider to provider."

This inefficient delivery system, he continued, "results in fragmented care including unnecessary hospitalizations, a major focus of policymakers and providers. This system is also not ideal from a payment perspective.

Because providers are paid each time the patient has an encounter with the healthcare system, there is little incentive for coordination of care and this system can produce redundancy in services and higher than necessary costs."

Rosenbloom said from the standpoint of protecting nursing home patients from $782.3 million Medicare cuts in January 2013 as a consequence of sequestration, health system delivery reforms that both save Medicare resources and benefit patients "are essential to replacing irrational cuts as the 'default' position in these times of fiscal duress."

A recent Avalere Health analysis of mandated Medicare funding reductions under the Budget Control Act estimates seniors' nursing home care will be cut $782.3 million in January 2013, with seniors in California, Florida, Texas, New York, Illinois, New Jersey, Ohio, Pennsylvania, Michigan and Massachusetts suffering the largest cuts. (For additional information and methodology notes on the Avalere study, go to www.aqnhc.org)