On the Front Line

One advantage to being in the home care industry is your front-row seat to see American democracy in action.

On the other hand, you're reminded of that old warning: Anyone with a fondness for laws or sausage should never look too closely when either is being made.

Here's a quick rundown of just a few of the threats and opportunities that home care stakeholders face in the months ahead.

Threats

One immediate threat comes in the form of action that Congress may take this fall to kill the proposed negative 5.1 percent physician update for 2007. In August, CMS released its proposed rule for the 2007 revisions to payment policy under the Medicare physician fee schedule, which set the physician update at minus 5.1 percent.

The update is based on the Medicare Economic Index, which is adjusted according to how actual spending compares to a target rate called the “sustainable growth rate.”

Legislation to stop this cut to physician fees (which will have the full weight of the physicians' lobby behind it) will cost approximately $1 billion more than was expected, and that increases pressure on lawmakers to look for areas to cut in Medicare — such as home care. As we've seen happen in the past, a cut to home care could be inserted into a bill in any number of ways with virtually no notice.

Longer term, the Bush administration is considering going after Medicare and Social Security “reforms” again in 2007 in relative calm after the 2006 elections but before the 2008 election year. Again, home care may well be a target, even after the long string of cuts and the scheduled start of the competitive bidding program next year in 10 MSAs.

Opportunities

In addition to urging Congress to support the Hobson-Tanner bill (to reduce the harmful patient access and small business impacts of competitive bidding) and the Home Oxygen Patient Protection Act (to repeal the forced ownership provisions passed earlier this year), there are other points we can make to Congress.

In the fight to make Medicare and Medicaid more cost-efficient, home care is the front line of defense. Obviously, home care is the most cost-effective setting for health care in the U.S. It's a folly to attack the most efficient sector in the name of “reform.” By providing health care services to beneficiaries where they prefer to receive care — in their homes — we can produce better outcomes for Medicare and Medicaid while keeping health care spending to a minimum.