Clinton proposal would extend repayment term, but nothing else
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON The White House released the expanded, 39-page version of its Medicare proposal, and there were few surprises for home health agencies and durable medical equipment (DME) suppliers. President Clinton’s plan to modernize and strengthen Medicare for the 21st century would attempt to cut Medicare spending by $72 billion over 10 years through the use of market-oriented purchasing and quality improvement tools designed to offset the cost of its proposed prescription drug benefit.
Roughly a third of the estimated savings would be recognized by giving the Health Care Financing Administration (HCFA; Baltimore) broad authority for competitive bidding, referred to in the plan as competitive pricing, for non-physician, Part B services, including DME.
The administration’s plan also includes modest attempts to soften the devastating impact the Balanced Budget Act of 1997 (BBA) had on the home care industry. To help agencies adapt to those changes, the White House plan would increase the repayment term for overpayments related to the interim payment system from one year to three years with interest. Currently, home health agencies are provided with one year of interest-free, extended repayment schedules.
According to Clinton’s proposal, the BBA required rapid implementation of many changes "without fully taking into account the need to make Y2K computer changes and other implementation issues." As a result, the proposal would also postpone the requirement for surety bonds until Oct. 1, 2000, when the home health prospective payment system is scheduled to be implemented. "This will help ensure that overpayments related to the interim payment system will not be an obstacle to agencies obtaining surety bonds," according to the plan. Clinton’s proposal would also follow the recommendation of the General Accounting Office (Washington) by requiring agencies to obtain bonds of only $50,000 instead of the 15% of annual agency Medicare revenues that was included in HCFA’s original surety bond regulation. Unlike some portions of Clinton’s proposal, this item is reportedly certain to be implemented by HCFA.
The Clinton plan would also phase-in the requirement that home health agencies report their services in 15-minute increments. "The demands of Y2K compliance were competing with agency efforts to implement this BBA provision," said the plan. "By allowing this degree of flexibility for a temporary period we will prevent any agency cash flow problems or returned claims."
Finally, the plan officially eliminates the sequential billing rule as of July 1. "Many home health agencies had expressed concern about the impact of the implementation of this requirement on their cash flows and this measure should alleviate these problems to a large degree," said the plan.
The BBA also included a freeze on payments for clinical laboratory services, DME, and parenteral and enteral nutrients supplies and equipment for 1998 through 2002. The Clinton plan would soften that blow by increasing payments for these services at the rate of growth in the CPI minus 1 percentage point from 2003 through 2009. This would be an increase over the BBA, and would bring payment growth in line with most other Part B services
Finally, it would increase payments for prosthetics and orthotics at the rate of growth in the CPI minus 1 percentage point from 2003 through 2009 and increase hospice payments at the rate of growth in the hospital market basket minus 1 percentage point over the same period.
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