Home-care providers are suggesting a compromise to Capitol Hill budget cutters: Limit annual Medicare per-visit payments until a comprehensive prospective payment system can be implemented in 1999.
The National Association for Home Care devised the plan in a bid to get a payment system included in narrow Medicare reform measures that Congress soon may consider.
Until a payment system based on episodes of care can be implemented on Oct. 1, 1999, the NAHC proposes continuing per-visit payment but capping how much an agency can receive based on the number of beneficiaries it serves. That limit would be based mostly on agencies' historical costs but also on average costs in their regions.
Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee, was drafting a limited Medicare reform bill last week. He said he had seen the NAHC's proposal and had sent it to the Congressional Budget Office for its analysis of how it would affect the federal budget deficit. Republicans have been targeting home care, one of the fastest-growing portions of the Medicare budget, as an area for spending reductions.
Thomas said he would decide whether to include the NAHC proposal based on the CBO analysis.
Congressional Republicans' balanced-budget proposal would have converted Medicare home-care payments to a prospective payment system beginning in 1997. In essence, the system would have placed a limit on how much home health providers would have been able to receive per episode of care.
The association had favored a prospective payment system and had proposed one to the Republican leadership.
But in the end, it opposed the Republican plan because it would have required home-care agencies to provide 165 days of care for a payment rate that only covered 120 days of historical costs.
In addition, added Dayle Berke, the NAHC's government affairs director, HCFA had said it could implement neither the industry proposal nor the Republican plan.
Without the cost-containment of a prospective payment system, home-care agencies ran the risk of exceeding cost-growth caps under the Republican balanced-budget plan. The CBO estimates that Medicare spending on home care will grow just over 17% to $17.2 billion in fiscal 1996, which began Oct. 1, 1995. Under the GOP budget blueprint, that rate of growth would be squeezed to 7.9% by 2002.
If home-care providers exceed those caps, the congressional Republican bill would reduce fees to that sector the following year.