Home Health & Hospice Week

Administrative hospice cut is part of Bush's budget blueprint for 2009.

Home care providers are getting even more nervous about their budget chances for next year.

President Bush proposed a 2009 budget earlier this month with billions in Medicare cuts, including a freeze to home health agency and hospice rates (see Eli's HCW, Vol. XVII, No. 6). Home care providers breathed a sigh of relief when the Democratically controlled Congress blasted the Medicare proposal in general--but there's still plenty of risk for HHAs and hospices in the budget process this year.

First, the Bush administration now says that the budget proposal includes an administrative measure to cut Medicare hospice payments by $2.29 billion over five years, according to the National Association for Home Care & Hospice. Centers for Medicare & Medicaid Services Deputy Administrator Herb Kuhn has confirmed the plan to the press.

CMS plans to eliminate the budget neutrality adjustment for hospice wage index to reduce rates by that amount, NAHC says. "We ought to go back and look at how we calculated that wage index to make sure it more accurately reflects services that are predominantly delivered in the home," Kuhn told the Bureau of National Affairs.

CMS won't need legislative action to put the cut in place. Rather, it will just use the administrative rulemaking process, NAHC notes.

"This is a bold effort to bypass Congress and trim $2.29 billion in Medicare reimbursement to terminally ill Americans who presently qualify for hospice benefits," NAHC President Val Halamandaris says in a message to members. "It would be an administrative cut which CMS believes it can implement without hindrance from Congress." NAHC is investigating a possible lawsuit over the cut, the trade group adds.

Watch For Springtime Medicare Bill

Home care providers could see trouble on the legislative side of the budget process too. Even though legislators have vilified the President's budget proposal, the search for places to cut Medicare spending is still on.

Senate Finance Committee Chair Max Baucus (D-MT) recently indicated to the AARP that the committee will look to Medicare Payment Advisory Commission recommendations for places to trim Medicare spending by this summer. Legislators will be looking for ways to head off the 10 percent cut to physicians' Medicare rates scheduled for July 1.

Uh-oh: The MedPAC reference is bad news for HHAs, who have seen rate freeze recommendations from the Commission for five years in a row, including this year (see Eli's HCW, Vol. XVII, No. 3). Med-PAC bases the cut recommendations on HHAs' double-digit Medicare profit margins, which the industry disputes.

Lawmakers are also taking aim at Medicare managed care plans, but they won't be able to raise all the funds they want from managed care cuts. Such cuts are also more politically challenging because the White House opposes them.

Timeline: Congress will start marking up a somewhat narrow Medicare bill focusing on the physician fix in April or May, observers expect. A larger Medicare bill could follow in the fall, although the election year makes that questionable.