Home Health & Hospice Week

Medicare managed care likely to become lawmakers' new financing pincushion.

Home care providers may be out of the legislative hot seat for a while following the Nov. 7 elections.

At press time, Democrats had taken power of the House by winning at least 28 seats. The power of the Senate was still in contention, with a tight race in Vir-ginia too close to call.

Control of the House is what is likely to make a big difference for home care providers, Capitol Hill insiders tell Eli. The Senate has been more home care-friendly, but the House has repeatedly looked to home care reimbursement to pay for other Medicare items like the physician reimbursement fix.

Now that the Democrats have taken the House, Congress is likely to pass during the lame duck session set to begin Nov. 13 a continuing resolution funding government at 2006 levels, notes the Visiting Nurse Associations of America.

Pros: That would leave the 3.3 percent update to home health agency payment rates intact and would leave the 36-month capped rental period for home oxygen untouched (see related story, p. 316). Industry veterans had been afraid that, like last year, Congress would freeze HHA rates to pay for physician and other Medicare increases.

Cons: Durable medical equipment suppliers looking for fixes to competitive bidding and home oxygen policies would remain unsatisfied, at least until next year, notes Ann Howard with the American Associa-tion for Homecare.

Watch For Physician Payment Fix

The picture for next year's congressional session looks brighter as well, experts predict. Congress is likely to address the physician payment cut in the spring and the fix could be retroactive to Jan. 1. But lawmakers are more likely to look to Medicare managed care funding to pay for it, rather than home care funding, suggests one lobbyist who requested anonymity.

Legislators may also look to the Medicare drug benefit to rustle up funding for the physician fix, Howard forecasts.

Don't count your chickens: But home care providers still have a lot to worry about. The politically powerful physicians may still wrangle a fix in the lame duck session, leaving lawmakers to raid home care coffers for the funding. Even a six-month fix to physician rates could bring down the home care increase.

For next session, relatively high Medicare profit margin figures and Medicare Payment Advisory Commission reports recommending rate freezes will continue to dog the industry, one lobbyist predicts. "Democrats aren't any more sympathetic to profit margins than Republicans are," he notes.

And home care lost some strong proponents in the elections, including House Ways & Means Health Subcommittee Chair Nancy Johnson (R-CT) and Sens. Lincoln Chafee (R-MA) and Mike Dewine (R-OH), VNAA notes.