Home Health & Hospice Week

Watch for a Medicare bill next month.

The budget resolutions pending at press time in the House and Senate don't include specific home care cuts, but home health agencies, hospices and durable medical equipment suppliers are still at high risk of cuts in fiscal year 2009--if not sooner.

The Senate and House budget committees approved their respective budget blueprints on March 6. They voted along party lines to reject President Bush's Medicare cuts, including those for home care providers, that he proposed last month (see Eli's HCW, Vol. XVII, No. 6).

But lawmakers will be looking for Medicare savings to pay for averting the 10 percent cut to physicians' payment rates slated for July 1. In a recent letter to the Medicare Payment Advisory Commission, Jeffrey Rich of the Centers for Medicare & Medicaid Services' Center for Medi-care Management estimates that Medicare payments to physicians will drop by 10.6 percent below current levels on July 1, and by Jan. 1, 2009, will fall to 15.4 percent below current levels under the current payment formula.

Physicians are knocking down legislators' doors to reverse the reduction. "Sixty percent of physicians say a cut of this magnitude will force them to limit the number of new Medicare patients they can treat, and more than half say it will force them to reduce their medical office staff," says Nancy Nielsen, the American Medical Association's president-elect, in a statement.

That means the pressure will be on to find places to cut Medicare spending, and home care is a tempting target. The Bush Administration already has tried to use cuts to home oxygen payments as a way to pay for spending in the unrelated farm bill pending in the Senate, although senators shot down the move. When a bill actually pertains to Medicare, oxygen and other home care spending will be even juicier targets for cuts.

Home care providers are responding with lobbying of their own. "Additional cuts to this benefit could create unnecessary barriers to quality care for patients and complex new challenges for providers who are already struggling to prepare for unprecedented changes to this benefit," says Peter Kelly, chair of the Council for Quality Respiratory Care, in a statement.

A March 5 Dear Colleague letter from Sens. Susan Collins (R-ME), Russ Feingold (D-WI), Christopher Bond (R-MO), and Jack Reed (D-RI) urged Senate Budget Committee leaders to reject cuts to home care and hospice, notes the National Association for Home Care & Hospice. "We believe that further reductions in home health and hospice payments would be counterproductive to efforts to control overall health care costs," the Dear Colleague letter said. "Home health and hospice care have been demonstrated to be cost-effective alternatives to institutional care in both the Medicare and Medicaid programs."

Watch out: Congressional leaders plan to introduce an omnibus Medicare bill as early as next month to address the July 1 physician payment cut, insiders say.

Some influential lawmakers have expressed a desire to pay for the fix out of Medicare Advantage rate reductions, but they will face a veto threat from the President. That could leave home care providers in the budget hot seat.