Fixing what the BBA broke: A review of 2000’s home care legislation

The 106th Congress leaves some questions unanswered

As an election year, 2000 was politically charged in a multitude of arenas, with health care taking top billing among the "star" issues. A White House fact sheet released earlier this year revealed that only 4 million Americans have some form of private long-term care insurance. That’s a mere 1.5% of the population, and with nursing home costs well exceeding $50,000 annually, home care will become increasingly important.

For those lucky enough to qualify for home care, now there is the fear that their home health care agencies can no longer afford to stay in business, let alone keep them on as patients. Not surprisingly, from the home care perspective, the most important legislation was a bill that tried, once again, to remedy the damage inflicted by the Balanced Budget Act of 1997 (BBA).  

Tim Brown, acting director of public relations for the National Association for Home Care (NAHC) notes, "BBA-fix legislation and PPS- [prospective payment system] related issues, such as the bundling of medical supplies, dominated the political landscape this year."

One such piece of legislation is HR 4727, the Equal Access to Medicare Home Health Care Act of 2000, identical Senate/House bills that are geared to helping home health care agencies recoup some of the losses they have incurred as a result of the BBA. (At press time, neither of these bills had passed.) The bill calls for the Health Care Financing Administration (HCFA) to revisit the subject of the financial burdens that accompany the revised PPS regulations.

Other provisions in the bill include:

• elimination of the 15% cut in home health spending mandated by the BBA, a rural security cost add-on of 10% to the episodic base payment under PPS for patients in rural areas and to reimburse providers for the costs of security services in high-risk areas;

• overpayment relief, which would have provided for repayment of interim payment system overpayments without interest for three years, and thereafter at an interest rate lower than currently mandated;

• telemedicine, whereby such services would be considered a legitimate Medicare home health service, the costs included in the agencies’ cost report.

Perhaps most important is that at press time, Congress still was unable to reach a conclusion on the Medicare provider "give-back" package. The bill, HR 5612 (the House Democrat version) the Medicare, Medicaid, and SCHIP (State Children’s Health Insurance Program) Benefits Improvement and Beneficiary Protection Act of 2000 and HR 5543 (the House Republican version), the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000.

Passage of the legislation is being held up because of the inability of the two political parties to agree upon the terms.

As the package currently stands, Republican leaders in the House and Senate have included these items:

• a one-year delay in the automatic 15% reduction (until Oct. 1, 2002);

• a full marketbasket adjustment for FY 2001;

• a temporary two-month extension of periodic interim payments (PIP) through December 2000;

• a marketbasket adjustment for hospice;

• clarification of the use of telehealth in the delivery of home health services;

• a General Accounting Office (GAO) study on the bundling of nonroutine medical supplies in the PPS base rate;

• prohibition against the sole use of distance or time as criteria for branch office, and GAO study on supervision of home health care provided in rural areas;

• a Medicare Payment Advisory Commission (MedPAC) study of low volume, isolated rural health care providers, including home health agencies;

• a provision allowing home health patients to attend adult day care without loss of their homebound status. (This last provision would add $300 million to the total cost of the bill and increase home health’s share of the approximately $31 billion package to about $1.5 billion over five years.)

Democrats, meanwhile, support President Clinton’s stated intention to veto, arguing that the package does not include enough funding for ailing fee-for-service providers such as home health agencies, nor does it require greater accountability from managed care plans.

"The home care industry," says Brown, "has come out strongly in favor of three provisions in the Senate Finance Committee’s Medicare bill, namely removal of medical supplies from PPS and payment on a fee schedule, increased funding for outlier patients, and an add-on to the base payment for rural patients." Unfortunately, those provisions were not included in the GOP version of the bill.

Senate versions of this legislation have been rolled into a general appropriations bill, says Ann Howard, executive director of the American Federation of Home Health Agencies in Silver Spring, MD. So broad in scope is the general bill, that Howard refers to it as the "minimum wage-tax cut-Medicare" bill. This bill, she says, "will be contentious. So contentious, in fact, that I don’t see how the issues will be resolved. Presumably, they might be able to sort through it and get an agreement, but that will take through Christmas and [Congress] already is not happy about having to come back."

Howard says she holds out a small bit of hope that the Medicare portion may be broken out of the larger piece of legislation to stand on its own. "So then the issue is: Can Medicare be passed on its own? The answer is yes. It’s possible, but on the other hand, there’s a lot not to like in it," she says.

"For one thing, there’s the $30 billion directed to HMOs. Secondly, Clinton very well might veto it if it were to pass because he doesn’t like all the money going to HMOs," she continues. "Then there are a lot of senators who won’t like it because it means money for HMOs. Those senators might not have any in their state and will [end up] paying for HMOs but seeing nothing done about their rural hospitals. I don’t know whether Medicare will be strong enough to stand."

Howard says that the home care industry does like some parts of the legislation, despite its flaws. "We like what is in there for us, but, really, it’s a nickel and a dime being thrown at an $80 billion wound. Nothing is returned of $80 billion that was taken from us. That’s a sad situation."

"Where is all that money going? A big chunk of it is going to HMOs. Frankly, it’s my contention that this money is payment of tribute in the old-fashioned sense of the word to keep the HMOs in the Medicare program so that if Republicans sweep Congress and the White House, [HMOs] will be there to privatize Medicare on their willing backs." (As Hospital Home Health went to press, the outcome of the presidential election was not decided.)

In other congressional action, the House voted 203 to 220 earlier this fall not to delete a provision from the House Labor Health and Human Services FY 2001 appropriations bill that would prohibit the Occupational Safety and Health Administration (OSHA) from releasing its ergonomic standards. If the motion had passed, it would have meant that an amendment preventing OSHA from implementing its proposed ergonomics standards before the end of the year would have been removed from the FY 2001 appropriations bill.

If it passes, HR 987 — the Workplace Preservation Act — would require the secretary of Labor to wait for completion of a National Academy of Sciences study before promulgating a standard or guideline on ergonomics. NAHC, says Brown, is against the mandatory imposition of ergonomic requirements and suggests establishing a voluntary program. As it stands now, a compromise has been reached between Republicans and Democrats in the House that would delay the implementation of ergonomic rules until six months into 2001, allowing the incoming president to determine whether the standard should be imposed.

Howard agrees that the delay can only be a good thing. And while she sees "some reasons for implementing ergonomics plans," she doesn’t think forced regulations are good for home health agencies. "The evidence is not in. We’re still waiting for studies from National Academy of Sciences as to the benefits. The Labor Department really jumped the gun on this one."

For those home care industry professionals looking to tip the scales of justice in their favor, notes Howard, there is S 2999, the Health Care Provider Bill of Rights. "It’s a very, very far-reaching bill that would protect the rights of home care providers. It would even the scales between providers that have been treated poorly by federal government and their representatives and the government itself."

[For more information, contact:

Tim Brown, Acting Director of Public Relations, National Association of Home Care, 228 7th St., S.E., Washington, DC 20003. Telephone: (202) 547-7424.

Ann Howard, Executive Director, American Federation of Home Health Agencies, 1320 Fenwick Lane, Suite 100, Silver Spring, MD 20910. Telephone: (301) 588-1454.]