IPS reforms appear likely, but in what form?
Fallout from an August House Ways and Means Health Subcommittee hearing on home care reimbursement continues to reverberate inside the Beltway. At that meeting, Subcommittee Chairman Bill Thomas (R-CA) directed Health Care Financing Administration (HCFA) deputy administrator Mike Hash to come up with "concrete proposals" to alleviate the problems associated with implementing the interim payment system (IPS) for home health agencies. (For further discussion about IPS, see Hospice Management Advisor, September 1998, pp. 111-112.)
Given the accelerating pace of activity on IPS, a consensus is emerging among home care industry representatives that Congress is likely to enact some form of legislation this year to address the problems, although it is less certain what the changes might be. Nearly a dozen bills have already been introduced in the House and Senate to modify IPS one way or another.
"The most likely scenario," one source close to the negotiations told HMA's sister publication, Home Health Business Report, "is that sometime in September or early October Congress will pass a bill that tinkers with the existing system, but possibly in very important respects." The key committees of jurisdiction in both houses "are definitely not looking at a moratorium" on IPS, the source said. "What they are looking at are reforms that tinker with the system as it currently exists."
The outline of a bill drafted by Thomas was being circulated in Washington in mid-August. The draft summary included a revised per- beneficiary formula, a revised per-visit formula, a new outlier policy, and a new copayment.
Bills introduced in late July by Sen. Christopher Bond (R-MO) and Rep. Nick Rahall (D-WV) would place a three-year moratorium on implementing certain provisions of IPS. Another bill proposing to do the same thing - while preserving budget neutrality through global budgets for Medicare home health expenditures - was introduced in August by Rep. Van Hilleary (R-TN). Hilleary's bill, the Homebound Elderly Relief Opportunity (HERO) Act of 1998, has been endorsed by the American Federation of Home Health Agencies (AFHHA) in Silver Spring, MD, the National Association for Home Care in Washington, DC, and the Home Care Association of America in Jacksonville, FL.
"The HERO Act eliminates the IPS as we know it through a moratorium and replaces it with a new system," Hilleary and Rahall stated in a letter accompanying the bill. "The present system encourages a 'race to the bottom' by having agencies turn away the most elderly, sick, and poor from their doors in order to simply stay afloat. Our legislation reinstates a system in which agencies abide by the actual cost of care."
While IPS was mandated by Congress last year to slow the rate of growth for Medicare home health expenditures, it instead caused a precipitous decline in reimbursement, leading to serious dislocations for home health agencies coast to coast, and the closure of many. "It is quite evident to me that the current IPS, coupled with HCFA's interpretation of the surety bond, is gravely threatening access to these invaluable services throughout our nation," Rahall told his colleagues on the House floor. "Quite simply the IPS is fatally flawed."
IPS was intended to facilitate a timely move toward replacing cost-based reimbursement for home health services with a prospective, per- beneficiary payment cap. Prospective payment was supposed to be in place by Oct. 1, 1999, but HCFA revealed this summer that it could not meet that timetable because of problems related to Year 2000 computer conversion.
"Now that HCFA cannot meet the Balanced Budget Act-prescribed implementation date, we must not stand by and allow a so-called interim, or short-term payment system to go on forever, because if we do, then even more home health agencies will be forced to close their doors - leaving patients without any resources other than the more expensive nursing home, or in critical cases, hospitals," Rahall said.
Meanwhile, home care representatives were gearing up for a showdown with Congress over the shape of IPS reforms. AFHHA warned that while "Congress is nearly unanimous in saying the IPS needs to be fixed, it may adopt a minimalist approach that does more harm than good." The national home care trade associations were planning to hold a joint IPS moratorium rally on Capitol Hill Sept. 9 to 10 to turn up the heat on Congress.
In late July, HCFA issued its final rule on surety bonds for home health agencies. As expected, the revised regulations will go into effect no earlier than Feb. 15, 1999, giving Congress and home care representatives a chance to rewrite the bonding requirements, which many home care providers found difficult, if not impossible, to meet.
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