Home Health & Hospice Week

Medicare package begins to take shape in the Senate.

The clock is ticking down to physicians' Medicare reimbursement cut slated for July 1, but it's home care providers who could see payment pain.

The Senate is taking the lead on putting together a Medicare package that will avert docs' looming 10 percent cut. Senate Finance Committee Chair Max Baucus (D-MT) now indicates the committee will issue a Medicare bill that will put off physician rate cuts for 18 months.

Some observers thought legislators would opt for a short six-month fix, which would be significantly less expensive. The 18-month version will require lawmakers to come up with more funding for the fix, which makes the threat to home care providers' payment rates even more dire.

Ray of hope: Baucus has indicated he could pay for the fix by making physicians' payment cuts down the road even steeper, then fixing those when their time comes. This could take the pressure off members of Congress to tap other providers' payments to pay for the physician increase.

But the American Medical Association and other physician trade groups are not fans of the idea. They'd rather eliminate the problem now than ask lawmakers to fix a problem that is twice as big later.

Even if Congress does adopt the so-called balloon financing approach for doctors, the fix will still require more funding, which is likely to come from providers such as home health agencies, hospices and durable medical equipment suppliers.

Stay tuned: Baucus hopes to have Medicare legislation on the Senate floor by mid-May. • The Medicare Payment Advisory Commission isn't going to make formal recommendations about hospice payment rates in its June report to Congress about the industry, but its findings could likely lead to congressional action anyway.

In last month's MedPAC meeting, the commission looked at hospice profitability, margins and length of stay. Several commissioners suggested making big cuts to hospice payment rates (see Eli's HCW, Vol. XVII, No. 11).

But in its April 10 meeting, MedPAC commissioners were more positive about hospices. "We're all going to leave this world and it's an excellent program," said physician and commissioner Ronald Castellanos. "It's a societal benefit. It's a family benefit."

States have a wide range of Medicare beneficiaries who use hospice before their deaths. For example, only 25 percent of District of Columbia Medicare decedents use hospice before dying, while that figure is 70 percent in Utah, noted MedPAC staffer Jim Mathews in the meeting.

The 70 percent figure is "actually not by accident, it's by design," Utah physician Perry Fine said in the meeting's public comment period. Hospice providers and allies have done "extraordinary work at changing the culture and the valuing of hospice by mainstream medicine," said Fine, a practicing physician with the [...]