Democrats announce relief proposal
A Democrat-backed proposal in the Senate seeks to put $80 billion back into the Medicare program over 10 years, essentially eliminating cuts resulting from the Balanced Budget Act (BBA) of 1997, including the 15% payment cut to the Home Health Benefit.
The American Association for Homecare claimed a victory for the industry, saying the Democratic plan reflects the association’s top priorities.
"Of the total reductions in projected Medicare outlays for hospitals, skilled nursing facilities, and home health agencies between fiscal years 1997 and 1999, 60% of the total reduction in projected outlays came from home health," says Thomas A. Connaughton, president and CEO of the American Association for Homecare. "The home care industry needs the relief offered in the Senate Democrats’ proposal to recover from the devastating effects of the Balanced Budget Act of 1997."
The plan, which was announced by Senate Minority Leader Thomas Daschle (D-SD) and Sen. Daniel Moynihan (D-NY), includes the following elements that would refine the BBA:
• prevents further reductions in home health payments, takes into consideration the highest cost cases, and addresses the special needs of rural home health agencies;
• improves payments for medical equipment.
The proposal will be introduced in the Senate in September. The proposal earmarks $15 billion in increased home health and home medical equipment reimbursements over the next 10 years. It represents a significant increase to President Clinton’s proposal, which called for $2 billion in restoration funds over five years.
The Balanced Budget Act of 1997 was originally estimated to save Medicare about $16 billion over five years. But the actual impact has been much greater, threatening the existence of many home health agencies. The Congressional Budget Office, which made the first savings estimate, estimated the actual impact at $70 billion over five years.
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