Home health, nursing home representatives tell committee Medicaid and reimbursement shortfalls threaten capacity

Jill Olsen, executive director of the VNAs of Vermont, and Helen Laban, executive director of the Vermont Healthcare Association, briefed the Senate Health & Welfare Committee on Jan. 21 about financial and capacity pressures facing home health, hospice and long-term care providers across Vermont.

Olsen said home health agencies provide skilled medical care at home, maternal-child preventive services, hospice and long-term care under the Choices for Care Medicaid waiver, and that those services reduce pressure on hospitals and nursing homes. "Home health plays a critical role in the system," she said, noting agencies now handle a meaningful share of hospital discharges and long-term care in the community.

Olsen told the committee that one Vermont home health agency closed last year; another local agency took over its designated service area. She said agencies face revenue shortfalls because Medicaid and Choices-for-Care reimbursement rates do not match the cost of care. "We got reimbursed by Medicaid for skilled services at about 67% of Medicare," Olsen said, adding that Choices for Care rates remain substantially below cost in many cases.

Laban, representing nursing and residential long-term care providers, stressed workforce shortages and Medicaid reimbursement as central constraints on capacity. She noted that skilled nursing facilities are largely subject to federal regulation but depend on Medicaid rates and state contracting for payment and inspection. "Short story is, no, we do not have sufficient capacity," Laban said when asked whether the sector can meet demand.

Both leaders urged the committee to consider timely, direct funding for rates and improved revenue-cycle payments to support agency operations. Olsen cautioned that grants and special-project funding help but do not replace sustained rate increases and timely claims reimbursement: "If it's not funding, direct funding for rates reimbursed in a timely way as services are provided, it's not going to help us."

The presenters said last year's legislative increase in funding for certain programs had helped, but ongoing rate adjustments and workforce strategies will be necessary. Committee members signaled interest in returning to the topic during budget deliberations and invited more detailed rate and budget data at future hearings.