[Congressional Record Volume 144, Number 5 (Tuesday, February 3, 1998)]
[Extensions of Remarks]
[Pages E71-E72]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         SENIOR CITIZENS NEED QUALITY HOME HEALTH CARE SERVICES

                                 ______
                                 

                       HON. CHRISTOPHER H. SMITH

                             of new jersey

                    in the house of representatives

                       Tuesday, February 3, 1998

  Mr. SMITH of New Jersey. Mr. Speaker, on our very first day back in 
session, I joined with my colleague, Rep. Jim Saxton, in introducing 
legislation to block the implementation of the Health Care Finance 
Administration's (HCFA's) new Medicare reimbursement program for home 
health care.
  This new Medicare reimbursement program, known as the ``Interim 
Payment System'' (IPS), is based on an incomplete and inequitable 
funding formula which directly jeopardizes home health care agencies 
and the elderly they serve in my state.
  The value of home health care is obvious. All of us intuitively know 
that enabling our seniors to receive quality, skilled nursing care in 
their own homes is preferable to other, more costly, sometimes 
isolated, settings. Senior citizens receive the peace of mind from 
familiar settings and their loved ones close at hand. And the cost 
savings to Medicare from proper use of home health care are 
considerable.
  The legislation we have introduced (HR 3108) corrects several flaws 
contained in the IPS formula and assures fair and reasonable Medicare 
reimbursement for quality home health care. If left unchanged, the IPS 
will cut Medicare reimbursement for home health care in New Jersey by 
$25 million in fiscal year 1998 alone. Several agencies in New Jersey 
could lose $2 million or more in anticipated reimbursement for 
homebound Medicare patients.
  One of the most unfair aspects of the IPS is that it seeks to treat 
efficient and inefficient home health agencies alike, despite the fact 
that average utilization rates in New Jersey's agencies--43 visits per 
beneficiary served in 1996--are far lower than the national average of 
74 visits that year.
  Because the IPS reimbursement rates for each home health care agency 
are linked to earlier utilization rates and costs, agencies that were 
efficient and honest all along still find themselves struggling to 
squeeze another 12 to 15 percent reduction in aggregate reimbursement 
rates from already lean operations--a very tall order indeed. 
Meanwhile, agencies in other parts of the country with abnormally high 
home health costs and utilization rates are permitted to use base year 
utilization rates that were badly inflated in the first place. Thus, 
they will continue to receive high reimbursement rates because they had 
inflated costs in the past. The IPS, therefore, effectively punishes 
efficient operations and does not comprehensively address the problem 
in areas with inordinately high home health utilization statistics.

  For example, home health agencies serving senior citizens in NJ will 
only receive enough funding to provide as few as 30 to 35 visits per 
patient. Meanwhile, agencies in other parts of the country--such as 
Tennessee and Louisiana--may continue providing their patients with 
almost triple that number of visits at twice the cost per visit. 
Disparities of this magnitude are inherently unreasonable and unfair, 
and must be corrected.

[[Page E72]]

  Mr. Speaker, it is a simple fact of life that the home health care 
industry is very time and labor intensive. There are ways to 
restructure an agency's operations to make care-giving more efficient, 
but at a certain point, one cannot go any further without impacting the 
quality of care the patient receives.
  In Ocean County, New Jersey--which is home to the greatest 
concentration of senior citizens in New Jersey--home health care 
agencies may only receive enough resources to provide as few as 30 
visits per patient. The situation in Mercer, Burlington, and Monmouth 
counties is much the same: all will see an arbitrary capping of 
reimbursement for home care visits no matter the patient's condition. 
If New Jersey patients require, on average, more visits per patient 
than Medicare will reimburse, the quality of the care they receive 
could be jeopardized and an agency that is forced to continue providing 
uncompensated care will eventually risk bankruptcy.
  The IPS is troubling for another reason: as initially implemented, 
the IPS gives providers a perverse incentive to avoid treating 
critically ill, chronic, or more expensive patients. Unlike a fully 
implemented prospective payment system (PPS), the Interim Payment 
System (IPS) makes no attempt to distinguish between agencies that are 
simply inefficient and agencies that are treating a disproportionately 
sicker patient population.
  Our bill mitigates the damage set in motion by the IPS and will 
restore at least 60% of the reimbursement cuts announced January 1, 
1998. To preserve the quality of medically necessary care for our 
seniors, our legislation mandates two changes to the IPS.
  First, our bill will allow home health care agencies to use calendar 
year 1994--rather than fiscal year 1994--cost data as the base year 
upon which visits and reimbursement rates are derived. This distinction 
may seem technical but it is extremely important for states like New 
Jersey which do not run on the same fiscal year as the federal 
government. The practical result of the IPS fiscal year requirement is 
that it forces NJ home health agencies to use earlier base year data 
(1993) when complying with the IPS. The older the data, the greater the 
gap between the IPS settings and the actual needs in 1998. Older data 
also glosses over the growing trend to move patients out of acute care 
settings and into home health care programs. The IPS program should be 
based on the most recent, practical, data.
  The second provision contained in our bill will protect home health 
agencies from a hidden cut in the Medicare home health reimbursement. 
Under the guise of ``freezing'' certain costs and prohibiting 
adjustments for inflation, the IPS actually goes beyond merely capping 
or ``freezing'' home health cost limits--it reduces total per-patient 
payments, too. If left unchanged, this ``so-called'' freeze provision 
will not only cut the anticipated inflation costs, but go below current 
per-patient reimbursements as well. To address this, HR 3108 requires 
HCFA to factor in medical inflation in IPS calculations.
  Mr. Speaker, when HCFA first announced its changes to the Medicare 
coverage of home health care I sent a letter signed by the entire NJ 
Congressional Delegation to Nancy-Ann Min DeParle, the Director of 
HFCA, outlining three major problems with the IPS and asking that the 
agency not implement its proposal until the formula was corrected. 
While one of our concerns has been addressed, the remaining inequities 
have not. I urge my colleagues to act swiftly on this legislation and 
move to protect homebound Medicare patients who are now at risk.

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