Home Health & Hospice Week

Don't count a copay out yet.

Many home care providers gave thanks when the so-called congressional Super Committee failed to come up with $1.2 trillion in budget cuts by its Thanksgiving deadline, but that gratitude may be short-lived.

Home health agencies were pleased because the budget cutting package was presumed to include major home care cuts such as an HHA episode copayment and accelerated "rebasing" of prospective payment system. Now all Medicare providers are scheduled to receive 2 percent across-the-board cuts starting in 2013, but that is most likely a preferred alternative to the budget cuts in the works. (Correction: Eli's Home Care Week previously stated the 2 percent cuts would take place in 2012.)

The 2 percent reduction will translate to $5 billion in cuts for HHAs over the next 10 years and $3 billion in hospice reductions, the National Asso-ciation for Home Care & Hospice calculates. While across-the-board cuts are not ideal, "the defeat of copayments ... was the number one objective of the home care community," NAHC notes.

"For now, this is the best for home health," believes financial consultant Tom Boyd with Rohert Park, Calif.-based Boyd & Nicholas. "Both parties had put the copay on the table, which was a bad place to start talking."

Copays "would have a devastating effect on providers," NAHC chair Andrea Devoti says in the trade group's newsletter. "The price tag for them would have been $20 to $40 billion in cuts over the 10 years, depending where they set the dial."

Bottom line: "The new 2 percent cut for a total of $5 billion over the next ten years is far short of some $50 billion in cuts for home health care which were under consideration," Devoti points out.

The news was not as good for hospice providers. "The 2 percent cut for hospice which comes to about $3 billion over 10 years is a jolt, because hospice was much less in the cross-hairs of the Super Committee," Devoti notes.

Watch For Further Budget Cutting

But "the fight is not over yet," Boyd tells Eli. "A lot can happen before Jan. 1, 2013."

And in fact it may happen as early as this month. That's because physicians face a stunning 27.4 percent cut to Medicare payment rates starting Jan. 1. Last year's "doc fix" legislation is scheduled to expire in the new year, which leaves physicians at the mercy of the sustainable growth rate formula problems for their rates.

The Obama administration is pushing for a permanent fix to the physician pay formula in place since 2003. "This payment rate cut would have dire consequences that should not be allowed to happen," outgoing Centers for Medicare & Medicaid Ser-vices administrator Donald Berwick says in a re-lease. "We need a permanent SGR fix to solve this problem once and for all."

But Congress will have to come up with a funding source to fix the physician payment problem. Congress may opt for a temporary one- or two-year fix (seen as a more likely option), or for a permanent correction to the payment system. The price tag for a one-year fix is about $30 billion, while a permanent fix would require about $300 billion, NAHC notes.

And one component of that funding is likely to come from home care. Everyone from the White House to the Medicare Payment Advisory Commission to the Republican and Democratic parties have endorsed the idea of HHA copays.

Congressional action could swing the other way as well. Members of Congress began making noise about blocking the 2 percent Medicare cut as soon as the Super Committee announced its inability to put together a deficit reducing package. How-ever, President Obama already has threatened to veto any such legislation.

Stay tuned: "There is a need to maintain a watchful eye," NAHC says.