NAHC Strongly Opposes Any Proposal to Use Home Health and Hospice Payment Cuts and Copays to Offset the Cost of Fixing the Flawed Medicare Physician Payment Formula
February 19, 2014 12:54 PM
Congressional leaders are hoping to fix the flawed Medicare physician payment formula - known as the Sustainable Growth Rate or “SGR” - permanently by March 31, when the current three-month patch expires. For more, please see NAHC Report, February 7, 2014.
If action is not taken by March 31, either by fixing the formula permanently or patching it again, physicians will see their Medicare rates drop by 24 percent. The cost of permanently fixing the payment formula was once estimated to be $300 billion. Because of the slowdown in Medicare spending generally, the price tag has dropped to less than half that.
Congressional leaders are requiring that the cost of the physician fix be offset with spending cuts elsewhere. In the past, the committees of jurisdiction have insisted that other Medicare providers take cuts in their payments to pay for temporary physician SGR fixes. Some policymakers have proposed more provider payment cuts and the imposition of more beneficiary cost sharing, including home health and hospice copays, as a means of paying for a permanent physician fix.
It has been widely reported that the Congressional committees with jurisdiction over Medicare have created a list of potential Medicare cuts to pay for the physician fix that have been scored by the Congressional Budget Office, including proposals from the President’s previous budgets and the Simpson-Bowles Commission.
Although there was no indication that the committees of jurisdiction have yet endorsed any of these proposals, it is widely assumed that they are under consideration. The proposals include several that would do great harm to the home health and hospice benefits:
A 1.1 percentage point cut in the inflation update over ten years for Medicare post acute providers, including home health providers (President’s budget);
A $100 home health copay on episodes not preceded by a hospital or nursing home stay, beginning in 2017 and applied to new Medicare beneficiaries (President’s budget);
Combining Medicare Parts A and B and imposing a uniform 20 percent copay on all Medicare services, including home health and hospice (Simpson-Bowles proposal)
Many in Congress have suggested that Congress use a portion of the savings from the drawdown in military operations in Afghanistan and Iraq, known as Overseas Contingency Operations (OCO), rather than cutting provider payments or requiring seniors to pay more out of pocket for their Medicare benefits. Democrats have generally favored this approach and have been joined in calling for the use of OCO funds to pay for the SGR fix by some leading Republicans, including former Senator Jon Kyl (R-AZ). The Leadership Council of Aging Organizations, a coalition of senior groups including NAHC, has favored using OCO savings, rather than Medicare cuts, to offset the cost of the physician fix.
Home health and hospice payments have been cut to the bone already and the imposition of copayments on beneficiaries would seriously impair access to the home health and hospice benefits. To send a message opposing any proposals to use home health and hospice payment cuts and copays to pay for the SGR replacement, you may go to the NAHC Legislative Action Network.
For home health, please click here: Write Your Legislators.
For hospice, please click here: Write Your Legislators.
The SGR bill will likely be coming to a head in Congress at the time that NAHC’s March on Washington is being held this year and before the current SGR patch is set to expire.
Given the real and looming threat that efforts to offset the cost of the SGR bill could have for the home health and hospice community, NAHC strongly urges all of its members to attend this year’s March and plead the case in person to lawmakers to oppose home health or hospice payment cuts or copayments to pay for the SGR fix.