Year 2000 or convenient excuse?
That's what some members of Congress and lobbyists are asking as numerous Medicare regulations and payment updates have been put on hold while HCFA tries to exterminate the millennium bug from its computers.
Those lawmakers and lobbyists wonder whether the agency's preparation of its information systems to represent the year 2000 in date-related functions is just a good cover story for its inability to draft the thousands of pages of regulations required by the Balanced Budget Act of 1997 or to calculate the annual updates to provider fee schedules.
"I think there's a sigh of relief that something legitimate like Y2K came along to give them a breather," said healthcare lobbyist Robert Betz. "There are serious problems with them being able to implement what they've been asked to do."
"I've just found a lot of things they couldn't do, now they say it's Y2K," said Rep. William Thomas (R-Calif.), chairman of the House Ways and Means health subcommittee. "If they didn't have a reason before, now they have one. From a political point of view, it gives them a convenient excuse."
Those suspicions surfaced last month as the full Ways and Means Committee debated and passed legislation that will raise payment caps on home health agencies. The balanced-budget law imposed those caps as part of an interim payment system scheduled to be in effect from Oct. 1, 1997, until Oct. 1, 1999, when a new prospective payment system was supposed to take effect.
The committee raised the caps to relieve low-cost home health agencies. The interim payment system squeezes those agencies because it sets agency-specific spending caps that are calculated from a 1994 baseline minus 2%.
And that cost pressure isn't expected to dissipate soon because HCFA claims its year-2000 work has delayed development on the home health PPS until 2000.
The Ways and Means Committee last month summoned HCFA Deputy Administrator Michael Hash to explain the agency's year-2000 performance and its failure to comply with the mandates of the budget law.
That became an opportunity for Chairman Bill Archer (R-Texas) and committee members Nancy Johnson (R-Conn.) and Jim Nussle (R-Iowa) to take issue with HCFA's performance.
Johnson's criticism was particularly caustic, calling HCFA "intransigent and incompetent" for failing to address its year-2000 problems earlier and forcing a crisis in the home health industry.
"There's no problem in the Social Security Administration because they started 10 years ago," Johnson told Hash. "You could have helped us on this, and you didn't. The wolf is at the door of rural home health agencies in my district right now."
"It seems like HCFA is using Y2K as a whipping post for a lot of things it can't do right now," Nussle added.
But Rep. Benjamin Cardin (D-Md.) jumped to HCFA's defense, saying that the Balanced Budget Act's rule-writing responsibility is as much to blame.
"Let's not beat up on HCFA for creating the problem because they didn't create the problem," Cardin said.
The confluence of the millennium bug and the budget-act regulations also are revealing the budget politics of both the administration and Congress.
For instance, the Ways and Means home health bill would increase home health spending by $1.4 billion over the next five years. But the committee refused to identify potential spending cuts to offset that increase.
At the hearing, Archer said that because HCFA's work on the year-2000 problem is the reason it can't draft the home health PPS, the home health crunch should qualify as an "emergency."
And as a year-2000 emergency, the $1.4 billion home health fix ought to qualify for funding from expected budget surpluses, as the Clinton administration and Congress have been discussing. The budget surplus is projected to be more than $63 billion this year.
But Hash responded, "We would prefer you not spend the surplus."
By the same token, however, the administration wanted more money for HCFA's administrative functions, partly financed by $659.2 million in user fees paid by providers. Congress has not heeded those requests and in fact has passed legislation cutting HCFA's administrative budget by $103.4 million, to $1.7 billion.
But now that providers, such as the home health agencies, have begun pressuring lawmakers to solve their snarled payments, Congress could respond by boosting HCFA funding or acquiescing to a user-fee proposal.
Thomas Scully, president and chief executive officer of the Federation of American Health Systems, argues that because more than $80 billion is provided for in the bill that funds the departments of HHS, Labor and Education, Congress can draw money from that bill to add money to cover HCFA's year-2000 program.
"User fees are just not rational and just not fair," Scully said.