Medicare Funding Issue
Awaits New Congress

By James R. Hood
Caregivers USA News

WASHINGTON, Nov. 25, 2002 -- As expected, the lame duck session of Congress failed to take any action to head off cuts in Medicare fees to physicians, home health care agencies and rural beneficiaries and caregivers. The issue will be one of the first to greet the new Congress in January.

The impasse means that physicians who treat Medicare patients will experience a 4.4% cut in fees on January 1, on top of this year's 5.4% reduction. Home health care took a 15% cut in October and rural beneficiaries and caregivers will take a 10% cut in April 2003.

The reductions were mandated by a formula adopted by Congress in 1997 and despite fervent election-year appeals, the Bush Administration was unable to find a way to work around the law and Congress rebuffed lobbying by both caregivers and Medicare officials.

The cuts were mandated under the Balanced Budget Act passed by Congress in 1997. At that time, it was estimated that the cuts to home health care would amount to $16.1 billion over a five-year period. In fact, the actual reductions are approaching $72 billion.

In its final weeks, Congress became paralyzed by the demands of doctors on the one hand and home health care agencies and recipients on the other, not to mention the escalating demands for prescription drug coverage under Medicare.

What's next? The issue will be on the front burner when the new Congress is sworn in. Government funding expires on Jan. 11, 2003 without Congressional action and there will be pressure on Congress to deal with the issue at that time. Physicians and caregiver groups will be formulating their strategies over the next few weeks.

"We have no choice but to prepare action plans for all scenarios,” said American Association for Homecare President Tom Connaughton. “The industry must continue to educate the lawmakers about our issues and let them know it is bad public policy to jeopardize homecare’s ability to serve beneficiaries.”

“We also have to convince lawmakers and policymakers that homecare is part of the solution to keep the aging baby boom generation out of institutions,” Connaughton said.

“I’m disappointed that the United States Senate failed to make needed changes in Medicare's payment rules, Sen. Bill Frist (R-Tenn.) said. "As both a Senator and a physician, I know that our decisions with regard to Medicare payment policy can have a direct impact on the quality of care our seniors receive, and I’m very concerned that the payment reductions now directly confronting doctors and other health care providers may have serious consequences for seniors and disabled Americans."

“In the absence of legislation to address provider payments, I call upon the Centers for Medicaid and Medicare Services to issue clear guidance for health care providers who treat Medicare beneficiaries regarding their options for continued participation in the Medicare program. Both doctors and the patients deserve clear and accurate information at this critical time," Frist said.