Home Health & Hospice Week

Is a reprieve from an inflation update freeze only temporary?

Home health agencies appear to have dodged a budget bullet for the moment.

Senate Finance Committee Chair Charles Grassley (R-IA) has dropped the freeze to the home health market basket index for fiscal year 2006 from his budget bill, sources say. The powerful lawmaker hadn't yet confirmed the deletion publicly at press time, however.

Grassley had been proposing a $2.1 billion inflation freeze and a one-year rural add-on (see Eli's HCW, Vol. XIV, No. 37). But after intense negotiations with fellow Finance Committee Republicans, the provisions were nixed from the proposal.

And Grassley has secured approval of the budget and hurricane relief bill from at least 11 fellow committee members, leaving home care providers "mostly home free" from home care cuts in the Senate budget, judges Kathy Thompson with the Visiting Nurse Associations of America. Unless the deal falls through, the legislation will go to Finance Committee markup at the beginning of the week and will go to the Senate Budget Committee shortly afterwards. The Budget Committee has an Oct. 26 target date to conduct its own markup on a comprehensive budget reconciliation bill.

But the risk does remain that the market basket freeze can pop up again in the Senate, warns William Dombi, VP for law with the National Association for Home Care & Hospice's Center for Health Care Law.

And home care providers still have to run the budget gauntlet in the House, where Ways and Means Committee Chair Bill Thomas (R-CA) has proven fond of home health copayment proposals in past years. House leadership has vowed to find $50 billion in FY 2006 cuts from mandatory programs including Medicare and Medicaid. If House members address Medicare in their budget bill, they almost certainly will try to take a chunk out of the home health budget, Thompson forecasts.

"The House is another serious battleground in the coming days," Dombi predicts.

Get ready for P4P: Where home health agencies may see some budget cuts is in Grassley's pay-for-performance proposal, also included in the Senate Finance budget bill. In accordance with a P4P bill Grassley introduced earlier this year, the provision is expected to dock providers' inflation updates if they don't report as-yet-unspecified quality data, observers say.

Timeline: A House and Senate conference on final budget legislation may not take place until Thanksgiving or later, Thompson estimates.