Budget:
FIGHT LOOMS OVER PRESIDENT'S PROPOSED HHA CUTS
Published on Mon Jan 08, 2007
Budget proposed also targets hospice reimbursement.
Home health agencies are gearing up for another uphill battle this year against a Medicare rate freeze.
Strikes against the industry are piling up, including the most recent blow--President Bush's fiscal year 2008 budget proposal.
The President calls for a five-year freeze on Medicare rates to HHAs, from 2008 through 2012, according to budget documents. And after the freeze, the President wants to reduce agencies' annual inflation update by 0.65 percent indefinitely.
Hospices aren't exempt from budget cuts either. While the proposal doesn't include a hospice rate freeze, it does call for the 0.65 percent reduction to start in 2008 and continue indefinitely for those providers too.
Cost: The freeze and reductions would result in $410 million less in Medicare payments to HHAs in 2008 and $9.7 billion less over five years, notes the National Association for Home Care & Hospice. The hospice cuts would result in $60 million less in 2008 and $1.1 billion less from 2008 through 2012.
"Medicare is simply not sustainable in the long-term in its present form," Department of Health & Human Services Secretary Mike Leavitt says. "So we have proposed modest steps to strengthen and modernize Medicare, and to reduce the burden of entitlement spending on future generations."
Providers still will see payment increases, stressed Centers for Medicare & Medicaid Services acting Administrator Leslie Norwalk in a Feb. 5 press briefing. The proposals "are reducing the rates of growth, not cutting payments," Norwalk said in the briefing. That's "an important difference," she maintained. HHA Challenges Mount The President's budget proposal comes on the heels of the Medicare Payment Advisory Commission's decision to recommend an HHA rate freeze for 2008 (see Eli's HCW, Vol. XVI, No. 3). MedPAC will include the freeze endorsement in its March report to Congress.
Leavitt, Norwalk and the budget documents all cited MedPAC recommendations as support for their proposed freeze and reductions. Alarm: Congress is hearing the budget-cutting urges from another quarter as well. The right time to start slashing Medicare spending was "ten years ago," Federal Reserve Chair Ben Bernanke told lawmakers recently. But unless Congress starts playing catch-up and fixing the program, the cuts will have to be "more severe" and "more draconian."
Demographic wave: The 78 million baby boomers will drive Medicare costs through the roof, Bernanke warned. In the process, "the U.S. economy could be seriously weakened," he added. Spending on Medicare, plus Social Security and Medicaid, will skyrocket during the next decade, doubling the programs' share of the gross domestic product by 2030.
Bernanke didn't offer specific suggestions, just dire alarms.
Even President Bush's political foes are in agreement on at least some home health cuts. House Ways & Means Health Subcommittee Chair Pete Stark (D-CA) expressed opposition [...]
