Home Health & Hospice Week

Stay alert as next year's rates are hammered out in Washington.

Home health agencies and oxygen suppliers are at the top of lawmakers' hit list for the 2008 budget.

Lawmakers continue to negotiate the particulars of legislation that would avert the 10 percent cut to physicians' Medicare payment rates. And the White House is making it much more likely that home care providers will bear the burden of paying for it.

Senators on the Finance Committee are crafting a Medicare package and hope to release it very soon. But they have to agree on whether cuts to Medicare Advantage plans or other providers--especially HHAs and oxygen providers--will fund the doc fix.

A group of five U.S. Senators are urging leaders of the committee to leave oxygen out of the Medicare cuts currently under consideration in Congress. "The timing is crucial since the Finance Committee has been reviewing cuts in Medicare, and home oxygen therapy is a target," said the American Association for Homecare in a recent bulletin to members.

The Nov. 19 letter, signed by Sens. George Voinovich (D-OH), Susan Collins (R-ME), Tim Johnson (D-SD), Johnny Isakson (R-GA) and Sheldon Whitehouse (D-RI), notes that in recent years, the Medicare oxygen benefit "has sustained an estimated $1.5 billion payment reduction."

The Senators add that the competitive bidding program for home medical equipment is set to further reduce payments for oxygen therapy by an estimated 10 percent in the round-one competitive bidding areas.

"Many of the recent policy changes have not yet been fully implemented, and their impact has not been evaluated," cautions the letter.

Gridlock Could Benefit Providers

Republicans oppose cuts to MA plans and Health and Human Services Secretary Mike Leavitt publicly has asked Congress not to reduce payments to the managed care organizations.

"Medicare Advantage enrollees are overwhelmingly satisfied with their choices for care, and enjoy substantial benefits and value," Leavitt said in a Dec. 3 release. "Both have proven to be highly popular with the American people and worthy of continued support from Congress."

The Bush Administration's opposition to MA cuts will make it much harder for home care providers to stave off cuts to their rates next year, observers expect. "Home health, skilled nursing facilities, and other Medicare providers are in danger of Medicare cuts to pay for the physician fix," warns the National Association for Home Care & Hospice.

On the other hand, the power struggle between the White House and Congress may mean no budget legislation gets passed this session at all, leaving the nearly 3 percent increase to HHA rates intact in 2008 and oxygen rates untouched, except by bidding.

Watch out: But when that scenario occurred two years ago, HHAs saw their rates rolled back retroactively to the previous year's rates on Feb. 1 by the Deficit Reduction Act (see Eli's HCW, Vol. XV, No. 7). So a rate increase in effect Jan. 1 may not stay in effect if budget negotiations are still up in the air.

But lawmakers are hoping to wrap up all budget legislation before they head home for the holidays this month, AAHomecare notes. And legislators are aiming to get a Medicare package to the President by mid-month, observers say.

Do this: Home care providers residing in the states of Senate Finance Committee members should contact those representatives and urge them to avoid home care cuts, NAHC advises. Visit www.aahomecare.org/associations/3208/files/110thKeyCommitteeMembers.pdf to find the committee members.

National Attention Hurts Oxygen's Case

Meanwhile, national coverage of Medicare oxygen payments is making suppliers' battle that much harder. A Nov. 30 article in the New York Times painted "an extremely biased and misleading picture of the healthcare sector that provides home oxygen therapy to Medicare beneficiaries," AAHomecare maintains.

The charges: The article, "Oxygen Suppliers Fight to Keep a Medicare Boon," noted that Medicare pays significantly more for medically prescribed oxygen therapy delivered in the homes of Medicare beneficiaries than oxygen equipment provided by Internet suppliers to individuals.

Firing back in a statement released the same day, AAHomecare charged the Times and federal policymakers with focusing "only on the equipment costs associated with home oxygen therapy rather than the complete therapy, which requires numerous services."