Grassley says industry should focus on PPS reforms, not IPS

By MATTHEW HAY

HHBR Washington Correspondent

WASHINGTON — Sen. Charles Grassley (R-IA), chairman of the Senate Aging Committee and a strong supporter of the home care industry, last week urged the industry to give up on further reforms in the interim payment system (IPS) and instead focus on bringing about a workable prospective payment system (PPS)." I would suggest that the time is right to focus on the prospective payment system for home care where the prospects of success are better," Grassley told a group of healthcare professionals Jan. 25.

Grassley said that last year’s budget agreement, which delayed the effective date for PPS by one year until October 2000, is "a golden opportunity to work out the bugs in PPS." But as far as the chances that Congress will take up IPS reform again this year, Grassley said he is not optimistic. "What prevented real reform last year," he said, "was the inability of the home care industry to reach a consensus on a budget neutral solution." And the reason for that, he said, was the division between high-cost and low-cost home health agencies.

"With the funding crisis that Medicare faces, the only way payment reform can happen is with some redistribution from high-cost to low-cost agencies." Grassley asserted. "Members of Congress listen to their constituents, so unless this division in the industry can somehow be bridged this year, Congress will continue to reflect it." Grassley said he feels as strongly as ever about the "inequities caused by IPS," but that absent a significant shift in the industry’s position he doesn’t see much hope for further IPS reform this year.

Not everyone has been as quick to write off additional IPS reforms this year, however. In fact, an aide to Rep. James McGovern (D-MA) last week confirmed that his boss has already started drafting an outlier policy for long term medically complex patients and discussing that legislation with his colleagues. "Under IPS, there is no outlier provision, and under PPS, there is supposed to be an outlier policy," said the aide. "Basically, there is a group of seniors that are now caught between these two policies until PPS is in place.

"Everyone initially wrote off any chance for IPS reform last year as well, and we were finally able to pass some changes late in the year," the aide pointed out. But he too said the home care industry would have to work together "as a unit and not in separate directions" to bring about any changes. "Whether it’s the 15% cut or the creation of an outlier or putting together a PPS that works, all sides need to get together well before their trip to Capitol Hill to decide what they want to push for in unison."

The legislative and regulatory priorities recently announced by the American Federation of Home Health Agencies (AFHHA; Silver Spring, MD) also reflects this view. In fact, additional IPS reforms were listed as the organization’s top priority. Among the possible solutions AFHHA suggested in addition to an outlier policy were suspension of overpayment collections and a regional per beneficiary limit for new home health agencies. AFHHA also suggested increased funding for home care in instances where it can be demonstrated that without home health services a patient will have to receive services in a hospital, nursing home, or other setting that exacts a greater cost to Medicare or Medicaid.

Like Grassley and the McGovern aide, AFHHA Executive Director Ann Howard also stressed the importance of industry unity. "With respect to the issue of a solution to the IPS crisis, we can achieve success only if we have industry unity," demanded Howard. "If we seek merely to level the playing field’ and to cannibalize each other’s members and their reimbursement rates we will again get only a pittance. The home health industry cannot afford another internecine fight over who is the most deserving of relief."

Grassley concluded pointing to several other possibilities that may be ahead for home care. "Some have proposed various ways of redesigning the Medicare home health benefit such as a system of independent case managers or dividing the benefit into its skilled and unskilled components," said Grassley. "As far as I’m concerned, all proposals should be considered. There is no sense being locked into the present benefit just because we’ve done it that way in the past."