Washington DC (June 28, 2002) – Val J. Halamandaris, the President of the National Association for Home Care praised the effort of the House of Representatives today in passing legislation that protects access to the Medicare Home Health Benefit for the nation's elderly and disabled. "More than 2 million Americans depend on Medicare home health services to stay safely in their homes while recovering from illnesses or injuries," said Halamandaris. "The action of the House of Representatives is a necessary step towards preserving that care."
Early in the morning on June 28, 2002, the House of Representatives passed legislation that would repeal a pending 15 percent cut affecting home health care payment rates. The legislation also extended the 10 percent add-on for rural home health agencies, and set the stage for other important improvements related to Medicare's homebound requirements and OASIS, the patient and payment assessment process. In addition, the House rejected efforts to impose a $40 per episode copayment that would have shifted nearly $2 billion in costs to the Medicare beneficiaries.
The scheduled 15 percent cut is an original element of the Balanced Budget Act of 1997 revisions to the Medicare home health reimbursement system. The cut had been included in order to achieve a desired level of savings of Medicare expenditures. However, the unintended consequences of BBA 1997 more than quadrupled the impact of the cuts increasing reductions in program expenditures from the intended $16.2 billion to over $70 billion in the first five years of the new system. "Home care is still reeling from the extreme difficulties created by the Balanced Budget Act of 1997. A further cut will likely cripple the already fragile delivery system in home care," stated Halamandaris. "The House has now given homecare a chance for survival."
Since 1997, access to home health care services has significantly declined with 1 million fewer Medicare beneficiaries with coverage today in comparison to 1997. At the same time, nearly 3,500 home health agencies have closed nationwide, representing nearly 35 percent of all the providers in existence at the time of BBA 1997. Even under the new Prospective Payment System, utilization of home health services continues to decline both in terms of patients served and the level of care provided. Despite the ongoing declines in service and a history of incorrectly estimating growth in home care expenditures, the Medicare program continues to project increases in Medicare home health payments. "We hope that Congress acts to bring about some stability in the Medicare home health benefit. However, unfounded projections of double digit growth in Medicare home health expenditures only serve to mislead the Congress and other policy makers," argued Halamandaris.
The House action did nothing to slow the process of implementing the scheduled 15 percent cut. The Centers for Medicare and Medicaid Services announced that effective October 1, 2002, that payment rates would be decreased by 7 percent from current rates and that the inflation update scheduled at 3.2 percent would be reduced to a 2.1 percent increase as a result of other provisions in Medicare law. The resulting reduction of 4.9 percent in payment rates pushes home care far short of the inflation in costs of delivery of care and sets a rate equivalent to more than 20 percent lower than 1997 rates.
"The key now is for the Senate to act when it returns from the July 4 recess and to act prior to October 1 so that further instability in home care can be avoided. We are counting on the Senate to come through on behalf of the millions of vulnerable American citizens who depend on the health care services they receive in their homes," remarked Halamandaris.
Founded in 1982, NAHC is the largest trade association serving the nation's
home care agencies, hospices, and home care aide organizations. Home care and
hospice services help keep families together by providing vitally needed healthcare
and supportive services to millions of Americans each year in the dignity of
their own homes.
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