Home Health & Hospice Week

Congress will battle over Medicare cuts next month.

While your costs are going up, your Medicare payment rates are likely to go down next year--unless you can sway some influential lawmakers to your side.

The U.S. House of Representatives passed a bill Aug. 1 to reauthorize and expand the State Chil-dren's Health Insurance Program (SCHIP). It wants to pay for the SCHIP spending in part by freezing home health agency rates at 2007 levels for 2008.

On top of the 2.75 percent case mix creep cut the Centers for Medicare & Medicaid Services has proposed in the refinements to the prospective payment system, that will spell big cuts for HHAs overall.

Steep cost: The rate freeze would cut $2.6 billion in Medicare payments to HHAs over five years, notes the National Association for Home Care & Hospice. The cut for case mix creep would strip more than $5 billion from HHA payments in that time period, NAHC warns.

But the rate freeze and case mix creep cut aren't set in stone. The Senate's SCHIP bill passed Aug. 2 has a smaller SCHIP increase, a higher cigarette tax and no Medicare cuts. That configuration may be the compromise House lawmakers eventually agree on to avoid a threatened veto from President Bush.

Or legislators may come to an agreement on the SCHIP items before the program's Sept. 30 expiration and deal with the Medicare issues in a separate year-end omnibus bill, experts predict.

Take action: It's vital for HHAs to contact their elected representatives now to urge them to avoid HHA cuts in final legislation, NAHC stresses. Many legislators are at home over Congress' August break.

Both senators and representatives are circulating letters to leadership urging them not to include the cuts, and the letters need more lawmakers to sign on, NAHC says.

• CMS has once again delayed the long-awaited release of the National Provider Identifier database. The NPI query database will be available Sept. 4 and the downloadable file will be available about a week later, CMS says in a message to providers.

The extra time is required to allow providers to edit their own National Plan and Provider Enumeration System (NPPES) data that will be in the database, CMS maintains. Providers have until Aug. 20 to submit their data edits.

CMS originally said it would allow providers by June to look up the NPIs of doctors who refer patients to them, but then the agency delayed the database launch until Aug. 1.

• HHAs aren't the only ones taking a beating in PPS changes this year. In its final inpatient PPS rule for hospitals, CMS sets out a 4.8 percent cut staggered over three years for improved coding and documentation. That's changed from the proposed rule's original two-year timeframe for the cuts.

The cut comes despite an amendment to a June appropriations bill in the House, which delayed the cut. Home care reps tried to secure a similar legislative clause for HHAs in the SCHIP legislation but were not successful (see Eli's HCW, Vol. XVI, No. 26).

The Medicare Payment Advisory Commission recommended a hospital cut in addition to one for HHAs and skilled nursing facilities, experts note. CMS is acting on all of those recommendations.

• HHAs will have to watch out for more problems with hospitals' post-acute transfer proration. As part of its hospital DRG expansion, CMS will increase the number of DRGs prorated from 190 this year to 273 in 2008, according to the hospital inpatient PPS final rule.

Proration affects HHAs because it docks hospitals' DRG payments when a patient is discharged to home care within three days. That has led some hospitals to severely curtail home care referrals (see Eli's HCW, Vol. XVI, No. 14).

CMS argued that the DRG increase isn't an expansion because the percentage of DRGs subject to proration will remain about the same--36 percent in 2008 versus 35 percent this year, due to the overall DRG expansion from 538 to 745 next year.

• You can learn something from a New Jersey initiative to reduce pressure ulcers that's garnering national attention. A group of 150 hospitals, nursing homes and home health agencies in the state have reduced the number of patients who developed bedsores by a whopping 70 percent, thanks mostly to low-tech interventions, reports The New York Times.

The New Jersey Hospital Association plan-ned and directed the initiative that ran from September 2005 to May 2007. Performing skin evaluations upon admission and specialized record-keeping to immediately detect skin deterioration were key, an NJHA official told the Times.

• The hospice conditions of participation for Medicare are still a ways off. CMS is working toward a May 2008 publication date for the hospice COPs, a CMS staffer told the July 18 Open Door Forum for home health.

• The federal Agency for Healthcare Research and Quality is looking for submissions from home health professionals for a new program aimed at improving quality through innovation. The program, called Health Care Innovations Exchange, offers a searchable Web-based national repository comprised of educational material for health care professionals.

• Quality Improvement Organizations will focus more on helping you improve outcomes and less on investigating you, if some influential senators get their way. Senate Finance Committee Chair Max Baucus (D-MT) and ranking member Charles Grassley (R-IA) have introduced legislation that would move QIOs' investigatory duties to new Medicare Provider Review Organizations.

QIOs have a conflict of interest with both investigating and assisting providers, Baucus and Grassley maintain.

David Schulke of the American Health Quality Association, the QIOs' trade group, protests that it is "costly and unnecessary to create a new national infrastructure of contractors to solve that problem."

The bill calls for handoffs between PROs and QIOs that are unlikely to work smoothly, AHQA criticizes in a release.

• Another private equity group has made a home care purchase, at least indirectly. The Harvard Drug Group of Livonia, MI, a portfolio company of Miami-based H.I.G. Capital, has purchased The Letco Companies in Decatur, AL for undisclosed terms.

Letco principal Mickey Letson will continue on as an executive, notes mergers & acquisitions firm The Braff Group in a release. Letco specializes in respiratory and compounded medications and Harvard is the second-largest distributor of generic drugs in the U.S. The Braff Group brokered the deal.

• Amedisys Inc. continues to grow by leaps and bounds. The Baton Rouge, LA-based chain intends to purchase IntegriCare Inc., which operates 19 home health locations in nine states.

Integricare generated $54 million in revenue, including more than $12 million in hospice revenue, for the year ended June 30, Amedisys says in a release. Integricare operates in Alaska, Colorado, Idaho, Kansas, New Hampshire, Oregon, Wyoming, and the Certificate of Need (CON) states of Washington and West Virginia.

"This transaction affords us entry into eight new states, positioning us well for future de novo growth in these areas," Amedisys CEO William Borne notes in the release.

Amedisys expects to close the deal in September, except for the West Virginia locations, which will take longer due to state regulatory requirements, according to the release.