Congress struggles to find a remedy for BBA woes
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON House Ways and Means Health Subcommittee Chairman Bill Thomas (R-CA) last week urged the Health Care Financing Administration (HCFA; Baltimore) to take all of the administrative actions the agency can to alleviate the burden on home health agencies and other providers stemming from the Balanced Budget Act of 1997 (BBA).
As Congress struggles to develop a legislative remedy, Thomas told HCFA Deputy Administrator Mike Hash at a hearing on BBA reforms Oct. 1 that the administration should offer its own plan to correct Medicare payment problems caused by the BBA.
Thomas told Hash that the total amount of Medicare funds that should be restored probably falls somewhere between the $7.5 billion over 10 years that the administration called for in its Medicare proposal and the $20 billion over five years included in legislation recently introduced by the Senate Democratic leadership.
Thomas added that when Congress and the administration passed the sweeping reforms two years ago, Congress expected HCFA to monitor those changes. However, while many of the more than 300 changes called for by the BBA have been implemented, he said HCFA has failed to implement others. According to Thomas, many of those delays are responsible for significant savings that could now be returned to providers on a budget neutral basis.
Meanwhile, subcommittee member Rep. Sam Johnson (R-TX) suggested HCFA has been using Y2K modifications as an excuse for not implementing BBA changes on time. But Hash maintained that the agency expects to return to its "regular activities" by year’s end.
William Scanlon of the General Accounting Office and Gail Wilensky of the Medicare Payment Advisory Commission also testified before the subcommittee, but Thomas and other subcommittee members were clearly zeroing in on HCFA.
Thomas outlined a series of administrative changes he said HCFA could implement immediately. He told Hash that while Congress typically tries to make reforms over a five- to 10-year period, the situation facing many providers is so severe that Congress and the administration should focus on what can be implemented over the next six to nine months.
"Time is short," he told Hash. "But there may be a difference between what the administration can do and what the administration will do."
Addressing home health, Hash responded with a familiar litany of steps the agency has already taken to soften the blow on agencies.
In addition to increasing the time for repayment of overpayments related to the interim payment system from one year to three years (with one year interest free), Hash noted that HCFA is postponing the requirement for surety bonds until Oct. 1, 2000 and following the recommendation of the GAO by requiring all agencies to obtain bonds of only $50,000, instead of 15% of annual agency Medicare revenues as originally proposed. Hash added no additional regulatory relief.
Thomas said the subcommittee will complete a package of BBA reforms as soon as the Congressional Budget Office (CBO) scores the proposed changes.
"I would have preferred to do it last week and I would have preferred to do it this week," he told his colleagues.
But while anecdotes are useful, he said the subcommittee needs the hard data on the cost of proposed changes that only CBO can deliver.
There has been "no lack of suggestions" by Congress about BBA reforms, but as much as possible the subcommittee needs CBO’s estimate of the impact those changes will have, Thomas said.
Senate Democrats offer proposal
The latest legislative remedy was introduced last week by the Senate Minority Leader Tom Daschle (D-SD).
The Medicare Beneficiary Access to Care Act would postpone the 15% across-the-board cut in home health reimbursement scheduled for Oct. 1, 2000 for two years and increase the per visit limit for agencies "disadvantaged under the IPS" to 112% of the median. It would also eliminate three burdensome regulatory measures, including interest on overpayments, the 15-minute incremental reporting requirement and consolidated billing for durable medical equipment.
Pointing to the fact that the BBA included a cut in the updates to hospice payments, despite the fact that those payments have not been rebased since 1982, Daschle’s bill also would restore full market basket increases to hospice rates.
Home care providers caution against further cuts
Pamela Bataillon, vice president of Visiting Nurse Associations of America (VNAA), told the subcommittee that BBA mandated changes have gone beyond congressional intent and have created backbreaking cost and cash flow problems for VNAs and other home care providers.
According to Bataillon, who also is a vice president of business development for the Visiting Nurse Association of the Midlands in Omaha, NE, her company has been forced to reduce its budget by $2.6 million , its staff by 42%, and its total volume of visits by 32% between August 1997 and August 1999. "In 1997, we were 11% under our cost caps," she told the subcommittee. "In 1998, we were 12% over cost caps. "
She said those actions have resulted in a 32% drop in revenues and a 42% drop in net assets (from $1.6 million to $974,000). Moreover, regulatory mandates such as OASIS and the 15-minute incremental billing requirement have increased its average cost per visit from $62.50 to $68.98.
Bataillon also told the subcommittee that because it is the biggest home care agency in Omaha, her company was the target of an Operation Restore Trust survey in 1999.
While the results of the survey turned up only two nursing visits and one occupational therapy visit that were technical denials, she said those determinations were extrapolated to all claims for that time period and resulted in a 9.5% denial rate of all nursing claims and a 100% denial rate of occupational therapy claims.
"Instead of having to repay $322.55 on the actual denied claims, we were subject to a projected overpayment of $24,255.76," Bataillon told the subcommittee. She said another 15% cut in revenues would decimate her company.
"We would seriously consider dropping out of the Medicare program because it could bankrupt the agency," she said.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content