Medicare Compliance & Reimbursement

Underpaid services could take a painful and inappropriate hit.

One big reason not to pass a home health agency rate freeze in 2007 is structural problems with the prospective payment system, industry representatives argue.

The Medicare Payment Advisory Commission acknowledges in its report to Congress the inaccurate distribution of HHA payments under the PPS.

"It's totally inappropriate for MedPAC to document the distributional shortcomings of the PPS system and then recommend an across-the-board reduction," argues Bob Wardwell with the Visiting Nurse Associations of America. "That will hit underpaid services equally with those perceived to be overpaid."

Adopting a freeze "seems the classic error committed in large bureaucratic systems," Wardwell tells Eli. That error is "don't do the hard work to fix the specific problems, just cut everything and see what happens."

A rate freeze "only enhances the problems of repairing a payment system by creating a 'moving target,'" the National Association for Home Care & Hospice argues in testimony it submitted for a House Ways and Means Health Subcommittee hearing on MedPAC's recommendations. "Efforts at reform are hampered by across-the-board payment cuts that are directed against all [HHAs] arbitrarily ... imposing those cuts on providers who are serving underpaid patient categories."