Congressional Efforts to Reduce the Deficit Expected to Accelerate

Having averted the fiscal cliff for now and extended the physician payment fix (see NAHC Report, January 3, 2013), Congress will again resume efforts in the coming months to reduce the deficit and find alternatives to the spending cuts in the delayed sequester. Also the debt ceiling will be breached by the end of February if Congress does not take action to lift the ceiling. Republicans have threatened to prevent a debt ceiling increase unless Democrats agree to substantial spending cuts, including cuts in entitlement spending on Medicare, Medicaid, and Social Security.

Copays and payment cuts have been proposed as a means of deficit reduction. The National Commission on Fiscal Responsibility and Reform (2010) (the “Bowles-Simpson plan”) recommended a uniform 20 percent copay for all Medicare services. This would amount to a $600 copay to access an episode of home health care. The Congressional Budget Office put forth a10 percent home health copay as one of its budget options for deficit reduction, a proposal that received support from the Republican Study Committee. The Medicare Payment Advisory Commission (MedPAC) has recommended a home health copay (as much as $150 per episode) for episodes not preceded by a hospital or nursing home stay.

The President’s September 2011 deficit reduction plan included a $100 home health copay for episodes not preceded by a hospital or nursing home stay, beginning in 2017 for newly eligible Medicare beneficiaries. Further cuts in home health payments have also been proposed in these plans.

In 1972, studies by the Senate Committee on Aging and the General Accounting Office persuaded members of Congress to eliminate the Medicare home health copayment. The studies found that copayments: 1) cost Medicare more to collect in administrative costs than they saved the program; 2) denied access to care and fell most heavily on those who could least afford it; 3) pushed families into poverty and loved ones unnecessarily into institutions, resulting in increased costs to the states and the federal government through the Medicaid program; and 4) increased costs to Medicare because people delayed care until they had to be hospitalized.

Hospice patients and providers could also suffer significantly under some deficit reduction proposals. Medicare hospice spending per beneficiary averages approximately $10,000 annually; the uniform 20 percent copay proposal, if applied to hospice, could impose an average copay of about $2,000 annually per patient. Additionally, existing regulatory and legislative payment reductions guarantee that, at best, hospices will experience flat payments for the foreseeable future. The Centers for Medicare & Medicaid Services (CMS) is working to reform the hospice payment system. Hospice providers need stability and predictability so that they can continue to make this vital service available to terminally ill Medicare patients.

Although the home care and hospice community can celebrate the fact that, unlike other Medicare providers, it was spared any cuts to pay for the physician payment fix (see NAHC Report, January 3, 2013), the increased pressure to find Medicare savings in the coming months pose a significant new threat. NAHC is encouraging its members to take action. NAHC will host a Strategic Planning Congress on Tuesday, February 5, and a Lobby Day on Wednesday, February 6. And in March NAHC will hold its March on Washington and 2013 Private Duty Home Care Leadership Summit. This year’s meeting will take place at the Mayflower Hotel in Washington, D.C. from March 17-20, 2013.

NAHC is urging its members to come to Washington, D.C., to participate in these meetings and receive the most up-to-date information on what NAHC and members of Congress are doing – and make your voices heard. These events will coincide with Congressional efforts to deal with the debt ceiling and seek alternatives to the sequester. NAHC also urges its membership to call and write their members of Congress (go to:NAHC Legislative Action Network) and meet with them in their home districts. And finally members should continue to work with their state associations and take members of Congress on home visits.

NAHC appreciates the grassroots advocacy efforts of its members and thanks all who are working so diligently to make sure home health care and hospice services remain accessible.

From the NAHC Report Article