Home Health & Hospice Week

Hopes for a quick fix to rural home health agencies' payment woes died as lawmakers stripped the Medicare provisions from a tax relief bill passed by the U.S. House and Senate.

Fortunately, some nasty cutbacks for durable medical equipment suppliers and pharmacies died as well in the $350 billion compromise tax bill Congress narrowly approved May 23.

Senate Finance Committee Chairman Charles Grassley (R-IA) proposed $25 billion over 10 years in increased reimbursement for rural providers, including a restoration of the 10 percent add-on for rural HHAs, in the Senate version of the tax bill. But in negotiations to iron out the differences between the Senate and House bills, the Medicare provisions were killed.

The legislation also had called for a 10-year freeze on inflation updates for DME, orthotics and prosthetics and a reduction in reimbursement rates for Medicare-covered drugs, from 95 percent to 85 percent of average wholesale price (see Eli's HCW, Vol. XII, No. 19, Article - Reimbursement). Those proposals died too.

House Republicans vehemently opposed the Medicare provisions, wanting them to be included in the forthcoming bill on Medicare reform, which is expected to include a proposal for a prescription drug benefit. House Energy and Commerce Committee Chairman Billy Tauzin (R-LA) raised particular concerns about the drug payment reductions in a letter to House Speaker Dennis Hastert (D-IL) and Senate Majority Leader William Frist (R-TN).

In relenting on the Medicare provisions, Grassley earned President Bush's support on the issue. The President sent Grassley a letter May 22 endorsing the rural increases in the forthcoming Medicare legislation. The statement is somewhat at odds with earlier messages coming from Bush Administration officials that indicated low support for provider givebacks.

Bush's endorsement of the rural provisions certainly should keep the chances high that the rural HHA add-on will fare well in upcoming Medicare legislation, notes Kathy Thompson with the Visiting Nurse Associations of America.

Home care providers must work hard to prevent negative provisions from creeping into the bill as well, the American Association for Home-care says. DME suppliers should urge lawmakers to avoid competitive bidding. HHAs should combat inflation update reductions and copayments, AAH says.

But passage of a comprehensive Medicare reform bill including a prescription drug benefit is rather doubtful, observers expect. Congress plans to tackle the matter in June.

House Republicans, especially House Ways and Means Committee Chair Bill Thomas (R-CA), were incensed with Bush's avowal of support for the rural payment boost, reports CongressDaily. The resulting tension could make agreeing on a Medicare bill even tougher, the paper says.

A provision calling for a $10 billion increase for Medicaid in the next 18 months did survive the compromise process and is expected to be signed into law with the rest of the tax bill shortly.