Home Health & Hospice Week

Providers are scrambling to assess the impact of the home care-specific provisions in the recently enacted Medicare law - but the changes with the biggest repercussions for the industry may have no mention of home care at all.

The law introduced sweeping changes to the Medicare managed care program, noted attorney William Sarraille of Sidley Austin Brown & Wood in a Jan. 13 teleconference analyzing the impact of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Those changes are intended to increase significantly the number of Medicare beneficiaries who participate in Medicare managed care plans versus the traditional fee-for-service program, Sarraille pointed out.

They also change the program's name from Medicare+Choice to Medicare Advantage, Sarraille noted in the call.

Former Centers for Medicare & Medicaid Services Administrator Tom Scully has predicted "that the legislation will ultimately bring one-half of all beneficiaries out of traditional Medicare" and into Medicare managed care programs, notes Bob Wardwell with the Visiting Nurse Associations of America.

Medicare managed care plans have long been known to limit home care services severely compared with fee-for-service coverage. And plans are likely to choose just a few HHAs in a service area to partner with as providers on their panels, freezing other area providers out of a significant portion of Medicare business.

Experts worry that the fee-for-service program will end up with the oldest, frailest and sickest patients as its participants - patients that managed care plans don't want and that would require intensive home care services for a complex combination of problems.

If predictions of Medicare managed care participation bear out, absorbing the 0.8 percent reduction to inflation updates, as passed in the Medicare law, "is an immediate challenge but not an HHA's biggest challenge" in the long term, Wardwell warns.

But agencies shouldn't draw up their managed care strategies quite yet. Congressional Democrats who oppose the recently approved Medicare reform law say they will work to change it when Congress reconvenes later this month, the New York Times reports.

Sen. Edward Kennedy (D-MA) and Senate Minority Leader Tom Daschle (D-SD) have already introduced legislation to revamp the law, and other Democrats in both the House and Senate are also working on reform legislation.

Democrats hope to decrease the role of private health plans in Medicare, give Congress the authority to negotiate drug prices with pharmaceutical companies and eliminate the provision calling for a pilot project that would test competition among private health plans and traditional, fee-for-service Medicare in six areas of the country, according to the paper.