Home Health & Hospice Week

 MedPAC recommends HHA payment rate freeze for 2006.

If home health agencies get through this congressional session with only a payment rate freeze, they should count themselves lucky.
 
Experts are predicting savage rate-cutting for Medicare providers this year. A one-year freeze is HHAs' best-case scenario at this point, says Kathy Thompson with the Visiting Nurse Associations of America. More likely are multi-year rate freezes, cuts to market-basket inflation updates and/or a copayment, Thompson predicts.
 
And the latest recommendation from the Medicare Payment Advisory Commission has all but sealed agencies' fate. MedPAC agreed in its Jan. 12 meeting to recommend to Congress a payment rate freeze for 2006.
 
HHAs' healthy average profit margins contributed significantly to the commission's decision, commissioners indicated in the meeting. MedPAC expects an average 12 percent HHA profit margin this year.
 
Legislators will be sharpening their budget knives due to a myriad of constraints ranging from the new prescription drug benefit to the war in Iraq. "Budget realities dictate that savings must be found someplace," says an aide for one influential Congress-man. "Mandatory programs will certainly be under the microscope," the staffer warns.
 
Lawmakers will be "digging deep" to come up with program savings, and providers such as HHAs, durable medical equipment suppliers, nursing homes and labs will pay the price, Thompson expects. Hospit-als are more likely to escape unscathed, she adds.
 
Physicians may see a small spending increase because they have payment update problems that would result in cuts in 2006, says attorney and lobbyist Jim Pyles with Pyles Powers Sutter & Verville in Wash-ington, DC.

Hopes for Rural Add-On Dashed

Observers had hoped to see MedPAC endorse an extension of the 5 percent add-on for HHAs serving patients in rural areas. Multiple commissioners had voiced support for the concept in past meetings (see Eli's HCW, Vol. XIII, No. 44, p. 346).
 
But the commission didn't even vote on the matter at its Jan. 12 meeting. The rate freeze was the only recommendation up for consideration.
 
Powerful congressmen have warned MedPAC not to propose items that compromise budget goals, and a restructuring of staff at the commission a few years back reinforced that warning, Pyles notes.
 
MedPAC staff and leadership "will make sure any recommendations are consistent with budgetary concerns," Pyles says. "This does not serve Congress well" because the commission wasn't intended to be a "rubber stamp," he argues.
 
There is virtually no hope that a newly re-introduced piece of legislation extending the rural add-on (H.R. 11) will see action before the add-on expires April 1, the congressional aide notes. MedPAC's silence on the matter underscores that fact.
 
And hopes for any rural relief later in the session are extremely slim, Pyles predicts. "I just don't see where the money will come from" for any bill adding to spending, he says.