Home health supporters slammed a General Accounting Office report on the industry last week and continued to campaign for Congress to eliminate a 15% cut in Medicare reimbursement scheduled for this fall.
But even if lawmakers heed their call, home health agencies could see less money. An early draft of the Medicare budget crafted by the House Ways and Means Committee included a $50 copayment for home health and a freeze on reimbursement increases (May 6, p. 8).
"It's a slick trick," said Stephen Cooper, a Washington healthcare lobbyist with FH/GPC. "The federal government will end up spending a lot less in home health, and the agencies will receive less."
According to the GAO's findings, home health agencies were paid an average $2,691 per episode of care over a six-month span when costs were an average $1,996. As a result, Medicare overpaid an average of about $700 dollars per episode, or 35% more than it should have paid, the report said.
The GAO recommended that Congress keep intact the 15% reduction scheduled to take place this fall. It further called for Congress to institute financial risk-sharing, in which Medicare would give a home health agency additional payments at the end of each year if its average cost exceeded a set payment. Likewise, an agency would return money to the government at the end of each year if its costs were less than the payment.
Released a month late, the GAO report came out as the Ways and Means Committee hammered out its Medicare budget. Although the early draft shows it may eliminate the 15% cut, negotiations are far from over.
"GAO does excellent work, and we take their findings under advisement," said a congressional GOP spokeswoman familiar with the bill.
But Centers for Medicare and Medicaid Services Administrator Thomas Scully questioned the GAO's risk-sharing proposal, calling it at odds with the most beneficial features of prospective payment systems-ensuring that all payments occur in a predictable and timely manner.
"I think the GAO went too far," he said.
Although he does not support all of the GAO's recommendations, Scully said he has not changed his views on keeping the 15% payment reduction intact, which is in line with the Bush administration's position. That figure came from the interim payment system. Based on the PPS, which replaced the interim system in October 2000, the reduction is really only 4%, he added.
"The policy is appropriate as it is," Scully said.
But the home health community argues the adjustment would be more like 7% or 8%. Regardless, the industry wants it off the table and strongly disagrees with the GAO report in its entirety. Industry leaders have called into question its inflation calculations because the GAO did not use current cost data and so are essentially guessing at how much home health agencies earn under the PPS, they said.
"We think it is not responsible. We don't know what the profit margins are," said Tom Connaughton, president and chief executive officer of the American Association for Homecare.
"It's a futile attempt," said Theresa Forster, vice president of policy at the National Association for Home Care. "If you don't know what people are incurring in costs, you can't determine the differences in their reimbursements."
Both associations have recommended that Congress wait for a couple of years for actual numbers on costs in the PPS.
How Congress will react is still unknown, but home health supporters remain optimistic. "We're really happy they understand the 15% is a clear issue for us," Forster said. "Things are still in flux."
Cooper, however, is skeptical. "The healthcare community in Washington knows the report is flawed, but those who want to cut home healthcare will use it," he said.