Congress spells relief.

Measure eases Medicare cuts for SNEs, HHAs

MODIFICATIONS TO THE PAYMENT SYStems for skilled nursing facilities and home health agencies (HHAs) included in a comprehensive budget package approved by Congress is expected to go a long way toward helping providers stay in business.

The Medicare, Medicaid and SCIP Balanced Budget Refinement Act of 1999 restores $2.7 billion in Medicare funding to SNFs and $1.3 billion in funding to HHAs. The legislation was passed in late November as part of a larger budget reconciliation package; President Clinton signed the bill into law November 29.

"We are very pleased with the final package," says Barbara Gay, director of congressional affairs for the American Association of Homes and Services for the Aging. "Overall, it was incredibly generous, and it should bring significant relief for providers."

While providers' payment increases will vary under the bill, depending on patient mix, the new revenue should give SNFs struggling to stay in business a needed boost, notes David Randall, vice president of reimbursement for the National Subacute Care Association. The challenge now is to persuade the White House to adjust the SNF market basket, he adds.

Specifically, the relief bill will

* Provide a 20 percent payment add-on for 15 RUG III groups--RHC, RMC, RMB, SE1, SE2, SE3,SSA, SSB, SSC, CA1, CA2, CC1, CC2, CB1, CB2--beginning April 1, 2000. The add-ons will be in effect until the later of October 1, 2000, or until the HCFA refines its classification system.

* Provide 4 percent add-ons for all 44 RUG groups from October 1, 2000, through September 30, 2002.

* Allow SNFs to choose between the higher of current payment rates under the PPS transition or 100 percent of the federal rate, effective with cost reporting periods beginning on or after January 1, 2000. Providers may elect immediate transition up to 30 days after the start of the cost reporting period.

* Exclude from the PPS ambulance services to and from dialysis and certain prosthetic devices and chemotherapy drugs beginning with services furnished on or after April 1, 2000.

* Place a two-year moratorium on the two $1,500 caps on outpatient therapy services (from January 1, 2000, until January 1, 2002). HCFA is to study therapy services and report to Congress on establishment of an alternative payment policy.

* Provide for Part B add-ons for facilities that participated in HCFA's case-mix demonstration project. The bill also creates special payment to hospital-based units that treat a high proportion of AIDS patients for fiscal years 2000 and 2001.

* Delay the 15 percent reduction in home health payments for one year, raise the per-beneficiary limit by 2 percent for agencies with limits below the national average in 2000, and pay $10 per beneficiary in 2000 to agencies to help cover costs for data collection and reporting.

* Limit HHA surety bond values to the lower of $50,000 or 10 percent of program revenues, shortening the required term to four years. The measure also excludes durable medical equipment from consolidated billing and provides for an extended interim payment system repayment schedule.

"We would have preferred a repeal of the 15 percent reduction, but the one-year delay at least gives agencies some more breathing room," says Valerie Tully, director of public relations for the National Association for Home Care. "Nearly 2,500 providers have already gone out of business, so any extra dollars certainly will help."

Raising the rates

All RUG categories Up 4%

Complex care/rehab (select categories) Up 20%

Source: Congress

Loss per caregiver over lifetime $659,000

Their loss

A new study suggests that policy changes are in order to protect family caregivers from the financial drain of lost wages and benefits while caring for elderly family members.

Source: MetLife Mature Market Institute, "1999 MetLife Juggling Act Study"