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Avalere Health Finds New Plan to Reform Medicare Post-Acute and Long Term Care System Could Save U.S. Approximately $35 Billion Over Ten Years

AHCA/NCAL/Alliance Implore President, Congress to Include Plan in Broader Health Reform Discussion

WASHINGTON, April 21 /PRNewswire-USNewswire/ -- Saying the opportunity now exists for the Obama Administration and Congress to both enhance U.S. seniors' care choices as well as save approximately $35 billion over ten years by adopting a new Medicare post-acute and long term care reform plan, the nation's leading long term care advocacy organizations today warned any broad-based reform of the nation's health care system in the months ahead will be incomplete without including long term and post-acute care.

Earlier today, Avalere Health announced it had scored the new reform proposal developed by the American Health Care Association (AHCA), the National Center for Assisted Living (NCAL), and the Alliance for Quality Nursing Home Care "using Congressional Budget Office-style methods and assumptions." Anne Tumlinson, a vice president at Avalere Health and lead author of the firm's new report, said, "The health reform goals debated today - achieving greater efficiency and value for the healthcare dollar, adding discipline to Medicare spending, and better use of evidence to improve patient experience - are inextricably tied to improving long-term and post-acute care in the U.S. Any meaningful reform effort will involve a careful analysis of choices, policy options, and trade-offs."

Reforming the Medicare post-acute payment system, she said, would generate $81 billion in savings over 10 years of operation. Those savings would offset the costs of launching a new federal LTC program, which by Avalere estimates, would cost $46 billion over 10 years to create. The total 10-year program savings is $35 billion. A full set of assumptions and methods is published in the report, entitled, "Post-Acute and Long-Term Care Reform/Estimating the Federal Budgetary Effects of the AHCA/NCAL/Alliance Proposal." To view the report, visit or

The key components of the AHCA/NCAL/Alliance plan are:

  • A voluntary, federal LTC benefit. A federal benefit covering LTC expenses would be available to those who commit a portion of their private funds, known as a personal responsibility amount (PRA), to LTC.
  • Greater consumer choice. People participating in the program would have greater choice of care settings and services, with expanded access to assisted living and other home-and-community-based services in addition to nursing facility care.
  • A standardized benefit built on a public-private partnership. Individuals with limited assets and incomes below 150% of the poverty line would qualify for the federal benefit without any PRA. For everyone else, the PRA amount would vary from $50,000 to $180,000 based on income and assets. Once individuals satisfy the PRA, the government pays all remaining care costs.
  • More effective care coordination. As part of the benefit package, care coordinators will assist in assessing an individual's needs and finding the right care at the right time, whether the individual needs long-term chronic care and supports or short-term post-acute care.
  • Evidence-based payment system for Post-Acute Care (PAC). The development of a new prospective payment system (PPS) for Medicare PAC services to enhance care coordination by basing payments primarily on patient need rather than the setting in which services are delivered.

"The health care reform goals articulated by President Obama and our congressional leaders - expanding access, improving quality, enhancing choice, boosting efficiency and controlling costs - can now be achieved in a realistic, comprehensive manner by adopting our proposal," said Bruce Yarwood, President and CEO of AHCA. "There exists a narrow window of time to achieve the global reforms that will guide the U.S. health system for decades to come, and we must not allow this enormous opportunity to escape our collective grasp."

Alan G. Rosenbloom, President of the Alliance, said, "This is a very serious plan to address a very serious crisis. Addressing post-acute and long term care in the manner we advocate -- which has now been validated by highly credible health policy experts -- is not only consistent with the overarching national goal of health care reform, it is central to achieving it. It is crucial that we recognize that older Americans have both chronic and intermittent health care needs. Failing to do so does a disservice to those who need care and undermines efforts to bring costs under control. This plan provides a substantive roadmap to accomplish many of the key reform policy objectives that will benefit every American."

David Kyllo, Executive Director of NCAL, stated, "The growing diversity of long term care settings is a welcome and necessary trend that better serves the needs and choices of aging Americans. Now that there is a strong, credible plan to bring about positive change that benefits every senior in need of care, it is incumbent on our elected leaders as well as our profession to help move this proposal from the drawing board to the health care marketplace."

In regard to the projected cost explosion in the years to come associated with simply patching the rapidly deteriorating post acute and long term care financing structure with periodic, piecemeal fixes, the AHCA/NCAL/Alliance leaders said the status quo is unsustainable in its present form and will eventually collapse. Further, accessing the long-term care they need to live productive dignified lives requires many older Americans to exhaust personal resources and declare bankruptcy - which in itself is an admission the system is morally wrong, they said.

With demand for eldercare services like those under discussion expected to double by 2040, America has an obligation to reform the nation's healthcare system in a manner that optimizes quality, choice and efficiency throughout the entire care continuum.

SOURCE The Alliance for Quality Nursing Home Care
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