HCFA released details of its new home healthcare payment limits last week amid a barrage of criticism from members of Congress and home health groups.
According to HCFA estimates, the new annual per-beneficiary spending limits for Medicare home health agencies will reduce total Medicare home-care spending in fiscal 1998 by slightly more than $1 billion, compared with what would have been spent if the changes had not been made. According to HCFA, total Medicare home health spending will still be nearly $11 billion in fiscal 1998 even with the changes.
The new payment limits were enacted as part of last year's balanced-budget law. While the limits, part of a larger overhaul of the home health payment system, took effect last Oct. 1, HCFA just last week released the regulations implementing the changes.
The new limits will only be in effect until Oct. 1, 1999, when the budget law requires HCFA to move to a prospective payment system for home health agencies.
Critics argue that because the new limits are based on historical costs, they penalize efficient providers that had lower costs in the past.
Meanwhile, HCFA Administrator Nancy-Ann Min DeParle told the Senate Aging Committee that she was looking for ways to reduce a requirement that all home health agencies carry separate surety bonds for Medicare and Medicaid. Home health groups say the double bond requirement is too expensive for many small agencies. The change may not be possible without further legislation, however, DeParle said.
About one-third of the 10,000 Medicare home health agencies already have obtained bonds, DeParle said.