Home Health & Hospice Week

Will CMS issue the highly anticipated PPS final rule this month?

Get ready to tighten your budget belt two extra notches next year, if the U.S. House of Representatives gets its way.

At press time, the House was expected to vote on a bill that would spend $50 billion over five years on State Children Health Insurance Program (SCHIP) re-authorization and a permanent physician payment fix. But as predicted, those cuts would translate into Medi-care reimbursement cuts for home health agencies.

The House would pay for most of the SCHIP and doc fix with a 41 cents per pack tax on cigarettes and a $50 billion cut over five years to Medicare Advantage plans. But those measures don't raise enough funds, so cuts to Medicare provider payment rates would make up the remainder in the Children's Health and Medicare Protection Act of 2007 or CHAMP (H.R. 3162).

The bill proposes a one-year freeze to the HHA market basket index inflation update in 2008. The update is usually about 3 percent.

Twice as bad: The freeze would actually be a "double hit" to HHAs, protests the Visiting Nurse Associations of America. That's because it would come on top of the 2.75 percent cut for case mix creep included in the prospective payment system proposed rule.

For suppliers, the bill calls for 13-month capped rental on oxygen, steep cuts to oxygen reimbursement rates and elimination of the first-month purchase option for power wheelchairs, reports the American Association for Homecare.

House lawmakers "are proposing a reimbursement cut that jeopardizes the benefits of a half million seniors who depend on medical oxygen therapy to treat severe respiratory conditions such as COPD," AAHomecare protests. Congress has reduced Medicare reimbursement for oxygen therapy by nearly 50 percent over the past 10 years, the trade group notes.

Not all bad: The House bill also has some positive provisions, including a two-year 5 percent add-on for HHA patients in rural areas, funding for telehealth, an extension of the Part B therapy cap exceptions, and controls on Medicare Advantage managed care plans.

Industry reps had hoped to balance out the rate freeze with an elimination of the 2.75 percent case mix creep cut, says William Dombi, vice president for law with the National Association for Home Care's Center for Health Care Law. Lawmakers seemed sympathetic to the double penalty for HHAs, but the amendment didn't make it into the bill the House will vote on, Dombi tells Eli.

Meanwhile, at press time the Senate was ex-pected to vote on an SCHIP bill that didn't include the physician fix or the freeze to HHA rates. Senators would fund their package with a 61 cents per pack cigarette tax.

What's next: Experts including Dombi and VNAA's Kathy Thompson expected the houses of Congress to approve their respective SCHIP bills, including the House's HHA rate freeze legislation, before going on their August recess.

But the Senate and House bills are so different, with the Senate's containing no Medicare provisions, that congressional leaders may not come to an agreement on them when Congress reconvenes in September, Thompson notes.

"It's very unusual for the House to have a Medicare package and the Senate not," Dombi points out.

If the bill does go to conference committee to work out the differences between the House and Senate versions, industry reps will be fighting against the cut, they vow. "We're taking every opportunity we can," Dombi declares.

President Bush has also threatened a veto of the SCHIP legislation.

Watch For Early PPS Final Rule

But securing elimination of the case mix creep cut may be about to get a lot harder. Right now, eliminating the cut has no budgetary impact because it is merely in a proposed rule, Thompson explains. Once the Centers for Medicare & Medicaid Services includes the cut in the final PPS rule, it will cost budget dollars to eliminate it, which lawmakers will be much less willing to consider given this year's budgetary restrictions.

And CMS insiders are telling industry reps that the rule may come out well ahead of schedule--even this month. Observers originally expected it in late September or early October.

The final rule's fast tracking may be due to the industry's overwhelming call for adequate time to implement the very complex new PPS changes.

Or it may be because CMS officials want to make sure the case mix creep cut is difficult for lawmakers to pooh-pooh under budget rules, more skeptical analysts suggest.

Bottom line: HHAs may not know the final outcome for their 2008 rates for months. "This thing will drag on until the bitter end," Thompson predicts.