Medicare Compliance & Reimbursement

Medicare home care funding is more vulnerable to cuts than ever as negotiations continue over the mammoth Medicare compromise bill.

Home care may become an even more attractive target for the budget ax as lawmakers look for funding for their prescription drug package, observers note. The Congressional Budget Office currently estimates both the House and Senate Medicare bills to be tens of billions over the $400 billion target set for the measure.

The most popular way to reduce home care funding seems to be instituting a copayment for home health. But many lawmakers staunchly oppose the proposal, which would equal about a $50 copay per episode.

Sen. Charles Schumer (D-NY) issued an Oct. 16 release saying he is working to kill the home health copay proposal. "When you strip this new fee down to its core, it's like a tax on being sick," Schumer said. "When you add on these new fees, there are a lot of people who won't be able to get the appropriate treatment they need."

Nevertheless, some influential congressional leaders are strongly for the copay. House Ways and Means Committee Chair Bill Thomas (R-CA) said on a talk show that home care is one of the fastest-growing parts of Medicare. "It continues to consume more and more money," Thomas said on This Week with George Stephanopoulos on ABC.

"Part of the problem of the cost of home health is there is no control mechanism for over-utilization," Thomas continued. "In home health care, a modest copay would help us."

The Visiting Nurse Associations of America fired off an Oct. 21 letter to Stephanopoulos, accusing Thomas of "using inaccurate, dated or misleading information." After serious cuts and limited growth for seven years, home health "is simply not the fastest growing benefit," VNAA says. The copay would harm the frail, elderly seniors who don't have the means to pay a copayment but wouldn't qualify for assistance, the association says.

Meanwhile, House Budget Committee Chair Jim Nussle (R-IA) Oct. 2 proposed reducing home care payments in line with home care costs as figured by the General Accounting Office. The GAO said in an earlier report that Medicare was paying home health agencies 25 percent more than their costs under the prospective payment system.

The GAO's assertion "was based more on speculation than on fact," the National Association for Home Care & Hospice says in a rebuttal to Nussle and to a subsequent editorial on the topic in the Wall Street Journal. "Marketplace realities belie exaggerated claims of profits with virtually no influx of new home health agencies in the last three years, a clear indication of financial instability," NAHC's letter says.