Letter to the Honorable Bill Archer, Chairman Ways and Means Committeee, U.S. House of Representatives, requesting further home care refinements to the Balanced Budget Act of 1997.

The Honorable Bill Archer
House Committee on Ways and Means
1236 Longworth House Office Building
Washington, D.C. 20515

Dear Congressman Archer:

As Congress begins discussions on further refinements to the Balanced Budget Act of 1997 (BBA 97) in earnest, we strongly urge that you take decisive action to relieve the current crisis in the Medicare home health program. The five national home health associations, including the American Association for Homecare, American Federation of HomeCare Providers, Home Care Association of America, National Association for Home Care, and the Visiting Nurse Associations of America, are unified in this request.

While we greatly appreciate efforts taken by you and your colleagues in 1998 and again in 1999 to mitigate some of the unintended damage to home care caused by BBA 97, it is essential that additional action be taken this year. The most recent Health Care Financing Administration (HCFA) data for calendar years between 1997 and 1999 paint a disturbing picture of the current state of the Medicare home health program.

• The number of beneficiaries served dropped by nearly one million, from 3.5 million to 2.6 million, or close to 25%;
  
  
• Total outlays for the same period dropped from $16.7 billion to $7.7 billion, or nearly 54%; and,
  
  
• Home health claims have dropped by almost 50%, and the average payment per patient has dropped by 38.5%. (Source: Preliminary 1999 HCFA/HCIS data)
  
  

No other sector of health care has been as negatively impacted by the BBA 97 as home health services (see table on next page for fiscal years 1997-1999). The Congressional Budget Office (CBO) recently reported that the "larger than anticipated reduction in the use of home health services" was the primary reason total Medicare spending fell 1% in fiscal year 1999. Likewise, according to the American Hospital Association's Year 2000 Lewin Study, the BBA 97 has reduced hospital-based home health services by 30.5% - the largest reduction of any hospital service affected by the BBA 97.

Medicare home health services will transition to a prospective payment system (PPS) on October 1 of this year. This new payment system is expected to incorporate a better methodology than the existing system that was imposed by the BBA 97. However, because the global budget set for the PPS reduces outlays to what would have been spent if the current system continued, episode payment rates are expected to be inadequate and may perpetuate many of the access problems certain classes of patients (such as wound care patients) are experiencing today. The change in the home health payment system will not correct all of the problems in home health that have resulted from the BBA 97.

True relief to the home health program cannot be achieved without legislative action that encompasses both restoration of services to patients who have lost care, and the elimination of further threats to the stability of the Medicare home health program and our national home care infrastructure. The five national home health associations seek the following legislative actions in order to restore and preserve the home health benefit:

Preserve access to the home health benefit by eliminating (rather than delaying) the additional 15% cut in home health expenditures currently scheduled for October 1, 2001; and,

Restore access to care for high needs and vulnerable patients as follows:

• Allow $500 million in each of the next five years to be used as outlier payments under the prospective payment system for services to the most medically complex and costly patients;
  
  
• Increase payments for home health services in rural areas by 10% to address the higher costs of delivering care in these areas; and
  
  
• Remove medical supplies from the per episode payments under the prospective payment system and create a budget neutral fee schedule for only the supplies that are actually used by patients.
  
  

We also urge you to instruct HCFA to take the following actions:

• Confine the OASIS data collection and reporting requirements to only Medicare and Medicaid patients;
  
  
• Limit the OASIS assessment items to only 20 questions that are actually needed to implement the new prospective payment system unless the costs associated with performing the full 80 question assessments during a 60-day episode of care are fully reimbursed; and
  
  
• Provide for an emergency payment mechanism during at least the first six months of the new payment system to ensure that there is no interruption in payments for services.
  
  

It is particularly appropriate in a time of unprecedented budget surpluses and a growing need for home health care that action be taken to ensure that our nation's seniors have access to these essential health care services. We look forward to working with you to achieve this goal. Thank you for your support!

Sincerely,

Mara Benner, American Association for Homecare, (703) 836-6263
Ann Howard, American Federation of HomeCare Providers, (301) 588-1454
Scott Lara, Home Care Association of America, (800) 386-4222
Theresa Forster, National Association for Home Care, (202) 547-7424
Kathy Thompson, Visiting Nurse Associations of America, (202) 737-3707

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