Home Health & Hospice Week

Lawmakers continue to troll for Medicare savings, with home care a prime target.

Home care providers were happy to see the U.S. Congress pass budget resolutions for 2009 with no home care cuts before adjourning for Easter recess, but the threat to home care provider payment rates is far from over.

The House and Senate passed non-binding resolutions on March 13 and 14, respectively, that call for reserve funds for fixing physicians' looming 10 percent pay cut under Medicare July 1. The resolutions didn't specify how Congress should come up with those funds, but observers widely expect lawmakers to go after Medicare Advantage plan rates as one source.

Another source will likely be cuts to home health agency, hospice and durable medical equipment rates, industry representatives fear. House Ways & Means Health Subcommittee chair Pete Stark (D-CA) has announced his intention to model new legislation on cuts included in last year's Children's Health and Medicare Protection Act (CHAMP) bill. That bill included a one-year rate freeze for HHAs and 13-month capped rental for oxygen.

Senate Finance ranking member Charles Grassley (R-IA) decries that plan, noting that the CHAMP bill included "drastic cuts to home health care, hospital care, and skilled nursing care."

HHAs will be at a distinct disadvantage in budget proceedings thanks to the Medicare Payment Advisory Commission's recommendation for a rate freeze in 2009, laments the National Association for Home Care & Hospice. That's true even though MedPAC bases its recommendation on faulty data, NAHC argues.

For example: MedPAC estimates HHAs' Medicare profit margin at 11 percent in 2008, but that figure is actually under 3 percent once you take into account hospital-based HHAs, which MedPAC ignores, NAHC points out. And even though MedPAC claims the industry is growing quickly, there are still fewer Medicare-certified HHAs now than there were in 1997, the trade group adds.

And don't think Congress will forget about MedPAC's opinion as the weeks go by. MedPAC Chair Glenn Hackbarth reiterated the cut recommendation in March 11 testimony before the subcommittee. "The data on access, quality, volume, and financial performance suggest that most agencies should be able to accommodate cost increases without an increase in base payments," he said.

Mobilize: DME suppliers are taking action too. The competitive bidding program is facing some criticism from multiple studies (see Eli's HCW, Vol. XVII, No. 10).

The National Association of Independent Medical Equipment Suppliers is urging providers to visit members of Congress while they're at home until recess ends March 31 and plead their case.

Lawmakers sent two letters questioning competitive bidding's impact on small businesses to the Centers for Medicare & Medicaid Services March 17, the American Association for Home-care adds.

On the horizon: Congress will now work out the differences between their resolutions in conference, [...]