[Washington D.C.] (March 5, 2002) Val J. Halamandaris, President of the National Association for Home Care (NAHC) today expressed his "profound dismay that the Department of Health and Human Services (HHS) has seen fit to advocate more cuts in the Medicare home health benefit."
Halamandaris took sharp exception to a letter sent by the Secretary of HHS Tommy Thompson and Office of Management and Budget (OMB) Director Mitchell Daniels to Ways and Means Committee Chair Bill Thomas (R-CA), and Subcommittee on Health Chair Nancy L. Johnson, (R-CT). In that letter, Thompson and Daniels took the position that Congress should not roll back a further15 percent cut in the Medicare home health benefit slated to take effect on October 1, 2002.
"The position taken by Secretary Thompson and Mr. Daniels flies in the face of recommendations by the Medicare Payment Advisory Commission (MedPAC), the group established by Congress to advise it on Medicare policy," said Halamandaris. MedPAC voted unanimously in January to recommend that Congress bar the scheduled 15 percent cut from taking effect.
"The facts speak for themselves," said Halamandaris. "Congress in 1997 sought to cut projected growth in the Medicare home care benefit by $16.2 billion over 5 years but unintentionally wound up cutting more than $72 billion." He cited many severe hardships this has produced:
Halamandaris pointed out that 41 of our 50 states are facing huge budget deficits (a total of at least $40 billion) and that Medicaid has been identified as the key culprit. Medicaid accounts for on average 20 percent of every state's budget. "It does not take a rocket scientist to figure out that cuts in the Medicare home health benefit will result in proportional increases in state Medicaid outlays. It is for this reason that the National Governor's Association has had a long-standing policy of advocating for expansion of Medicare home and community based care services. Clearly the policy embraced by Secretary Thompson and Mr. Daniels would put even more pressure on state Medicaid budgets and exacerbate state budget deficits."
Halamandaris asserted that the policy outlined in the letter is contrary to editorial opinion expressed in many major US newspapers. For example, the New York Times editorial of April 25, 2000: called for the restoration of the excess and unintentional cuts in the Medicare home care benefit. The Times said, in part: that “Congress had reason to rein in ballooning Medicare costs in 1997. But the nation's oldest and most fragile citizens should not have to suffer for good intentions gone awry."
Halamandaris noted that the Thompson/Daniels letter is in sharp contrast to the recommendations of the nation's prominent senior citizens and consumer organizations. He cited a Leadership Council of Aging Organizations letter to Congress dated October 8, 2001, which took a strong position in favor of the elimination of an additional 15 percent cut. Halamandaris, who previously served for 20 years as a Congressional staffer, first as counsel to the U.S. Senate Special Committee on Aging and later the House Select Committee on Aging, said the "Position expressed in the letter is out of sync with the views of the vast majority of members of the House and Senate."
“Almost every member of Congress knows that the home care community has been devastated by a magnitude of cuts that went far beyond Congressional intent. Congressional oversight hearings over the past four years are replete with references that the Congress has been misled by HHS, and by OMB and CBO projections. No other provider group participating in Medicare has been cut anywhere near the 50 percent that home care has been cut [from $17.5 billion in 1997 to $9.1 in 2001]. Most of the members of Congress know that people in their districts, including many of their family members, no longer qualify for the level of home care services that were intended by the Congress. They have stated their intentions to restore the home care benefit and protect it from further cuts. For Secretary Thompson and Mr. Daniels to suggest further cuts in addition to what has already occurred shows a lack of commitment to community-based care."
By way of showing Congressional support, Halamandaris pointed to a bipartisan letter authored by Senator Susan Collins (R-ME), Senator John Kerry (D-MA), and 65 of their colleagues (two-thirds of the Senate). The letter, which was sent to Senate Budget Chairman Kent Conrad (D-ND) and Ranking Member Pete Domenici (R-NM), recommended elimination of the 15 percent cut. A similar letter signed by 113 members of the House was sent to House Budget Chairman Jim Nussle (R-IA) and Ranking Member John Spratt (D-SC).
Halamandaris added, "Last April, Senator Collins offered an amendment setting aside money to cancel the proposed 15 percent cut in home care which passed on the floor of the US Senate by a margin of 99 to 1. Subsequently, the Senate and House of Representatives both passed the FY 2002 Congressional Budget Resolution, which included this provision funding eliminating the 15 percent cut.”
In their letter, OMB and HHS justified further cuts in the Medicare home health benefit by citing OMB projections suggesting that the industry is beginning to recover and show growth in fiscal year 2002. "This is a little bit like saying that because a recent heart attack patient is showing a heartbeat, that all further care should be suspended," said Halamandaris.
Halamandaris pointed out that both OMB and CBO projections have proven unreliable in the past. "It was OMB and CBO that predicted the reductions in BBA 97 relative to home care would amount to only $16.2 billion over five years and they have in fact amounted to $72 billion to date." At the present time CBO and OMB do not even agree on the rate of spending in the Medicare home health benefit; if you cannot agree on 'what is' in the present, it is impossible to project 'what will be' in the future.
"For OMB to assert that home care is increasing at 42 percent this year, and use that claim as an excuse for implementing further cuts on the sickest and most vulnerable Americans stretches credulity to the limit," said Halamandaris. "Equally unacceptable is their reference to describing what Congress calls a 15 percent as really only as a 7 percent cut. From the beginning of the prospective payment system, agencies have been paid 12 percent less per episode than their expected costs because their spending under the interim payment system was very cautious and they did not spend up to the allowable limits. If an additional 7 or 8 percent cut is added on top of that, the net effect of the 15 percent cut will be closer to 20 percent. Lost in all of this, however, is the real point -- any further cuts in the Medicare home health benefit cannot be tolerated at this point. No industry that has been cut in half can sustain further instability.”
[Editors please see related press release and rebuttal taking issue with HHS/OMB's assertion that Medicare home health benefit is increasing at 42 percent this year and the assertion of what Congress calls a 15 percent cut is really only a 7 percent cut in the benefit.]
Halamandaris has directed an appeal to President George W. Bush. In his letter he asked the President to review the policy of his appointees, which Halamandaris said were “in direct opposition to the President's values” in his "New Freedom Initiative" and his longstanding support of programs such as home health care that have proven to be both cost effective and helpful in keeping families together.
"I appeal to you, Mr. President, because you are known for your compassion and your good judgement. I ask that you join MedPAC, the nation's senior, consumer and disability community organizations, the nation's hospice and home care community, the nation's nurses, home care aides, and the majority of the Members of Congress that support not only blocking the imposition of a further 15 percent cut, but also restoring the Medicare home health benefit so that it once again meets the needs of the nation's ill, disabled, and dying citizens.
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 health care and supportive services to millions of Americans each year in the comfort and dignity of their own homes.
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