Cancellation policy.

Congress considers easing Medicare cuts to borne health

CONGRESS MAY BE MOVING TOWARD A MORE favorable position for Medicare home health agencies. Although the outcome is far from certain, new legislation introduced with bipartisan backing and recent decisions by the Clinton administration are seen as significant steps in that direction.

President Clinton sent a strong signal in early July when he removed from his Medicare reform proposal a requirement that patients share more of the cost of their home health treatment by making co-payments for each visit by an aide or nurse. That move came as Senators Susan Collins (R-Me.) and Christopher Bond (R-Mo.) introduced legislation to provide substantial relief from further cuts and regulatory burdens.

Their bill would cancel an additional 15 percent cut in Medicare home health payments scheduled for October 1, 2000. Carolyn Markey, president and CEO of the Visiting Nurse Associations of America, believes that if Congress does not wipe out the 15 percent cut, the lawmakers will delay it for at least one year.

In trying to get a handle on rising Medicare costs, Congress enacted a provision in the Balanced Budget Act of 1997 calling for implementation of a prospective payment system for home care. Until the system is implemented, home health agencies are being paid according to a periodic interim payment system. Expenditures for Medicare home health care are to be reduced by 15 percent whether or not the prospective payment system is implemented on October 1, 2000.

The Congressional Budget Office reported that the Balanced Budget Act provisions would reduce home health expenditures by $16.1 billion between fiscal years 1998 and 2002. In March, the budget office tripled its estimate to $47 billion.

A further 15 percent cut to home health cost limits would be "devastating" to cost-efficient providers and would reduce seniors' access to care, Markey says. "I think it will be the final nail in the coffin, so to speak."

The Collins-Bond bill would maintain the interim payment program through the first year of implementation of the prospective payment system to protect agencies from cash-flow problems. The measure also would increase payments for certain agencies serving high-cost patients, and give agencies three years instead of one to refund due Medicare after enactment of strict reimbursements.

Recent reports by the General Accounting Office and the Medicare Payment Advisory Commission conclude that patients with intensive medical needs are most at risk of losing access to home health care under the interim payment system. An estimated 2,000 home health agencies have closed since 1997.

The Collins-Bond bill, whose 15 cosponsors include four Democrats, will cost about $10 billion, according to Collins--more than the $7.5 billion Clinton wants to set aside as a "quality assurance fund" to ease cuts to all Medicare providers, including hospitals, skilled nursing facilities, and home health. But, he points out, Medicare cuts to home health agencies would still be much larger than originally projected even with the additional $10 billion in funding.