HOME HEALTH: Congressional Plan Awaits WH Approval
With a vote on the omnibus budget agreement slated for tomorrow, congressional negotiators and the White House have still not reached a deal on a restructured payment formula for Medicare home health care agencies. The AP/Boston Globe reports that under the plan proposed by House and Senate leaders, reimbursements would be increased for 65% of agencies, and a scheduled 15% cut in payments would be delayed for one year. The plan would be funded by changes in laws governing Individual Retirement Accounts and prize winnings. Roth IRAs, currently available to married couples making up to $100,000, will be gradually extended to households earning up to $150,000. The AP/Globe reports that "[b]ecause Roth IRAs have better long-term tax benefits than regular IRAs, many couples are expected to switch even though they'd have to pay an up-front tax to do so." Prizes from casino jackpots and lotteries will become available in lump sums upfront, "increasing taxable income in the short-run." The two changes are expected to raise $800 million over five years (10/17). The Washington Times reports that an additional $900 million "would come from lowering expected inflation adjustments" in home health care payments.
Anne Howard, president of the American Federation of Home Health Agencies, sharply criticized the proposed payment adjustments, saying, "It's the equivalent of asking disaster victims to pay for their own disaster relief." Bill Dombi, general counsel of the National Association of Home Care, said that rather than decrease the future inflation-adjusted payments, "We wish they could have taken some money from" the International Monetary Fund's $18 billion in funding (Goldreich, 10/17). Rep. Pete Stark (D-CA) attacked the IRA and prize winnings tax code changes, calling them an "outrageous tax giveaway" (AP/Globe, 10/17). The Washington Times reports that "the White House withheld its support [Friday], so the rescue package might not make it into the new budget."
According to a House Commerce Committee release, the payment adjustments under the congressional proposal would break down as follows:
- "Old" home health agencies above the national median per beneficiary payment limit will see no change;
- "Old" home health agencies at or below the national median per beneficiary limit will see an increase of 33.3% of the difference of their Balanced Budget Agreement cap and the national median;
- Agencies that opened between 10/1/94 and 10/1/98 will receive 100% of the national median, with a "hold harmless" provision so they are guaranteed not to lose money;
- Agencies that open after 10/1/98 will receive 75% of the national median;
- Per-visit limits will be increased to 106% of the national median;
- The impending 15% reduction in payments will be moved from 10/1/99 to 10/1/2000 (House Commerce Committee Release, 10/16).