HOME CARE: HCFA Rescinds Bonding Regulation
The Health Care Financing Administration withdrew a controversial regulation Friday "meant to keep fly-by-night" home care agencies out of the Medicare system by requiring all home care operators to post a $50,000 surety bond. Critics protested the bond -- which could be used to reimburse the government "if overbilling was discovered after a health care agency went out of business" -- calling it "too onerous" for small home care agencies, the AP/Washington Post reports. HCFA officials agreed to scrap the rule after Congress threatened to repeal it in favor of a more acceptable regulation. "We are delighted to hear that reason has finally prevailed," said National Association for Home Care head Val Halamandaris. Clinton administration officials, Congress and industry representatives plan to work together to draft another regulation, which is expected to go into effect sometime next winter (6/28).
While half of the home care agencies in the Medicare system had already paid the bond, the home care industry group continued to oppose the requirement as "shortsighted and heavy-handed" (Meckler, AP/Los Angeles Times, 6/27).
Eye On The Industry
"Thankfully, HCFA saw the light," said Senate Aging Committee Chair Chuck Grassley (R-IA), one of the rule's leading opponents. "Now we have the opportunity to get a better rule. Our goal is to preserve home health care for seniors who need it." Grassley said HCFA officials agreed to rework the rule to better reflect congressional intent "for a surety bond requirement that weeds out problem providers without denying access to care for those who depend on small home health agencies" (Grassley release, 6/26). The Clinton administration and Congress have kept a watchful eye on home health care, "Medicare's fastest growing benefit," the AP/Los Angeles Times reports. Clinton "imposed an unprecedented moratorium" on new agencies last year after an audit revealed that "16% of all improper Medicare payments" were to home care operators. In the past decade, the average number of home care visits to the elderly has more than doubled, and government spending has gone from $3.1 billion to $18 billion (6/27).