Congress Avoids the “Fiscal Cliff,” Preserves Home Care Benefit (For Now?)

In the eleventh hour before Congress would have taken the country off the so-called “fiscal cliff,” the U.S. House of Representatives passed a bill late last night to avoid the consequences, which included immediate and automatic reimbursement cuts, increased debt and a possible downgrading of the U.S. credit rating. The vote in the House was 257-167, while the Senate passed the bill 89-8 earlier this week. The bill now goes to President Obama for his signature.

Home care receives a reprieve and will count it as a win

The bill marks a significant reprieve for the Medicare home health care industry in a long lasting era of slashes to reimbursement and costly regulatory burdens being added. There are no cuts to Medicare home health services or benefits, payments or payment rates. Additionally, no home health copays are in this bill. Had Congress been unsuccessful in passing legislation to avoid going over the fiscal cliff, Medicare payments were expected for HHAs were expected to take a two percent cut annually for the next ten years. Additionally, Congress was considering multiple home health copay options, ranging from $100 (President Obama’s recommendation) to $600 (Bowles-Simpson commission) per 60-day episode.

The bill also avoided cutting Medicaid home care and preserved the Medicare outpatient therapy cap through December 31, 2013.

Beyond home care

Beyond its impact on the home care industry, the bill extends tax rates, including the Bush era tax cuts, for the vast majority of Americans. It also includes a “doc fix” through December 31, 2013, which avoids the 26.5% cut in reimbursement to physicians as mandated by the sustainable growth rate. The doc fix is paid for primarily through cuts to hospitals.

Long-term care insurance

The CLASS program established to help finance long-term care services through a voluntary insurance approach under the Patient Protection and Affordable Care Act was also repealed under the bill. The repeal has no financial impact as the Centers for Medicare & Medicaid Services earlier indicated that it would not implement the program due to its inability to assure financial viability.

Long-term care commission

An important provision in the bill is the establishment of a long-term care commission that is tasked with the responsibility of developing a plan for meeting the needs of the growing population of Americans needing care in the home and in other settings. The Commission on Long-Term Care will have 15 members appointed by the President and congressional leaders with representation consisting of consumers, older adults, family caregivers and care providers.

What’s next?

This victory buys the home health care industry precious time to stress to Congress the high-quality, cost-effective services it provides to Medicare beneficiaries. With 10,000 Americans turning 65 years old every day, there’s no doubt that the Medicare home health industry provides a critical service at a lower cost to these new beneficiaries – that case has to be made through in-person meetings and home care visits with members of Congress.

The bill puts off the so-called sequester, which are automatic cuts in federal spending that would have taken effect today and reduced the budgets of most agencies and programs by 8% to 10%. Congress will have to tackle this issue come late February, which could result in more cuts to the home health benefit. Between now and the end of February, it is critical that Florida home care professionals call on Congress to oppose additional home health cuts and copays!

Further, the accelerated rebasing of home health episodic payments will be a subject of discussion that HCAF will closely monitor. Under the Affordable Care Act, CMS must rebase home health payments by a percentage (no more than 3.5% in changes each year), considered appropriate by CMS, to reflect the number, mix, and level of intensity of services in an episode, and the average cost of providing care. The initial four-year phase-in was supposed to begin in 2014 and end in 2017. The Medicare Payment Advisory Commission (MedPAC) has called on Congress since the ACA’s 2010 passage to accelerate rebasing to over a two-year period, and plans to make that recommendation again in its March 2013 report to Congress. This issue will be addressed at HCAF’s 2013 March on Washington. Stay tuned for more details!

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