Home Health & Hospice Week

Freeze on inflation update threatened.

Members of Congress searching for budget cuts in the wake of Hurricanes Katrina and Rita are eyeing home care spending as a juicy target.

Senate Finance Committee leadership, which is spearheading the effort to pass more extensive relief for Hurricane Katrina and Rita victims, is favoring a two-year market basket index freeze for home health agencies, Capitol Hill insiders say.

The senators have looked to the Medicare Payment Advisory Commission for recommendations on where to trim spending, the National Association for Home Care & Hospice notes. And earlier this year, MedPAC recommended freezing the inflation update for fiscal year 2006 (see Eli's HCW, Vol. XIV, No. 9).

As an apparent peace offering to the industry, Committee Chair Charles Grassley (R-IA) also is considering a one-year extension of the 5 percent rural add-on, notes Kathy Thompson with the Visiting Nurse Associations of America.

Hard bargain: But HHAs shouldn't get sucked into thinking the add-on is a fair a trade-off for the inflation freeze, Thompson warns. The market basket provision is estimated to strip $2.1 billion from home care spending over five years, while the one-year add-on is pegged to contribute only $245 million to the pot, she tells Eli.

And while the notion of a home health copayment hasn't been put forward as part of the latest deliberations, some lawmaker is bound to suggest the idea when looking for places to cut spending, predicts Ann Howard with the American Association for Homecare. "Everything has the potential to be trotted out" in the process of budget reconciliation, Howard warns.

The House appears to be letting the Senate take the lead on finding budget cuts to balance out hurricane relief, experts note. But House leadership has endorsed the idea of an across-the-board cut to mandatory spending programs like Medicare. And when the House and Senate confer on final budget legislation, House lawmakers would be only too happy to seize on Senate recommendations for cuts, observers expect.

3 Good Reasons to Shoot Down Cuts

At the moment, nothing is set in stone for the final budget plan. "Everything is on the table and nothing is on the table," Howard says. Lawmakers will vigorously debate cuts in the coming weeks. "It will be a period of intense activity" as the debate rages, she predicts.

That gives home care providers an opportunity to sway their representatives. NAHC urges its members to impress upon their senators that they must shoot down a market basket freeze.

HHAs "should tell their senators how the dramatic increases over the summer in fuel/transportation and other costs have affected them, and how these costs--exacerbated after Hurricane Katrina--are affecting your agency's ability to serve patients and retain staff," the association urges.

Agencies should stress the value of home care and how the industry is still recovering from the drastic cuts of the Balanced Budget Act of 1997 and the interim payment system, Howard counsels.

Particularly if a copay is raised, HHAs should point out how it will lead patients to refuse home care services, landing them in more expensive settings like hospitals and nursing homes as their conditions deteriorate, Howard advises.

Forecast: Thompson and Howard expect to see Medicare budget legislation nearing finalization by the end of the month. A congressional session lasting until Thanksgiving wouldn't be overly surprising, however, Thompson notes.