[Congressional Record Volume 144, Number 11 (Thursday, February 12, 1998)]
[Senate]
[Pages S749-S750]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KENNEDY (for himself, Mr. Jeffords, Mr. Kerry, and Mr. 
        Leahy):
  S. 1643. A bill to amend title XVIII of the Social Security Act to 
delay for one year implementation of the per beneficiary limits under 
the interim payment system to home health agencies and to provide for a 
later base year for the purposes of calculating new payment rates under 
the system; to the Committee on Finance.


               medicare and home health care legislation

  Mr. KENNEDY. Mr. President, the home health benefit available under 
Medicare plays a significant role in allowing elderly beneficiaries to 
remain in their homes and in their community. Those who use the home 
health benefit are among the most vulnerable Medicare beneficiaries. 
More than 40 percent have incomes below $10,000. One in three live 
alone, and two-thirds are over age 75.

  In recent years, the cost of the home health benefit has been one of 
the fastest growing parts of Medicare. While the vast majority of this 
growth is attributable to a legitimate increase in home health care as 
patients are moved out of the hospital more quickly, some portion is 
known to be due to fraud. As a result, Congress enacted provisions on 
this spending as a part of the Balanced Budget Act of 1997. 
Unfortunately, it now appears that some of the restrictions will 
operate in a way that penalizes providers unfairly and jeopardizes 
their ability to continue to offer these vital services for the 
elderly.
  In order to address these issues, I am introducing legislation to 
delay the effective date of one provision, and to change the base year 
that will be used to calculate future home health payments. Congressman 
McGovern is introducing similar legislation in the House of 
Representatives.
  The problem with the current law is especially serious in New 
England. Home health agencies throughout the region generally provide 
care for less cost than the national average. For example, the average 
Medicare payment per home health visit in Massachusetts in 1995 was 19 
percent below the national average. These programs are effective. They 
provide high quality home health care and help people to remain in the 
community and out of hospitals and nursing homes. And they do so in a 
cost-efficient manner. Nevertheless, the Home & Health Care Association 
of Massachusetts estimates that the provisions of the Balanced Budget 
Act of 1997 could result in a loss of 1.5 million home health visits--a 
20 percent reduction--this year. Under the Act, Massachusetts and other 
states that provide high quality care efficiently and at lower rates 
are at a disadvantage, whereas inefficient providers are permitted to 
lock in higher rates.
  One of the most questionable effects of the Act requires home health 
agencies to comply with ``per beneficiary caps'' before the federal 
government tells them what the caps are. The bill I am introducing 
delays the effective date of the caps until October 1, 1998, to allow 
time for agencies to adjust to forthcoming, essential guidance from the 
Health Care Financing Administration.
  In addition, this bill moves up the year--from 1994 to 1995--that 
will be used to calculate payments for 1998 and beyond. This change 
means that payments will more accurately reflect the type of home care 
that is currently delivered.
  The problem facing home health patients and agencies is substantial. 
Congress should address this issue now, before home health agencies 
that provide needed services are unfairly forced out of business, and 
before senior citizens are forced to go without necessary care or leave 
their homes for more expensive hospital care or nursing home care. The 
provisions of the Balanced Budget Act should be modified to avoid these 
unfortunate and unnecessary problems.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1643

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. DELAY OF PER BENEFICIARY LIMITS UNDER INTERIM 
                   PAYMENT SYSTEM AND CHANGE OF BASE YEAR.

       (a) Delay in Per Beneficiary Limits Under Interim Payment 
     System.--
       (1) In general.--Section 1861(v)(1)(L) of the Social 
     Security Act (42 U.S.C. 1395x(v)(1)(L)), as amended by 
     section 4602 of the Balanced Budget Act of 1997, is amended 
     in clauses (v) and (vi) by striking ``October 1, 1997,'' each 
     place it appears and inserting ``October 1, 1998,''.
       (2) Conforming amendments.--Section 1861(v)(1)(L)(vii) of 
     the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(vii)), as 
     added by section 4602(c) of the Balanced Budget Act of 1997, 
     is amended--
       (A) by striking ``April 1, 1998,'' and inserting ``August 
     1, 1998,''; and
       (B) by striking ``fiscal year 1998'' and inserting ``fiscal 
     year 1999''.
       (b) Change in Base Year.--Section 1861(v)(1)(L)(v)(I) of 
     the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(v)(I)) is 
     amended by striking ``ending during fiscal year 1994'' each 
     place it appears and inserting ``ending during fiscal year 
     1995 or, at the election of the agency, calendar year 1995''.
       (c) Effective Date.--The amendments made by subsections (a) 
     and (b) shall apply as if included in the enactment of the 
     Balanced Budget Act of 1997.

  Mr. JEFFORDS. Mr. President, today, I am introducing legislation with 
my colleague Senator Kennedy that will improve the implementation of 
the interim payment system to home health agencies established under 
the Balanced Budget Act of 1997. It is imperative that we protect 
access

[[Page S750]]

to care for our most vulnerable populations--the elderly and the 
disabled. While I support the move to a prospective payment system for 
home care under the Balanced Budget Act, the payment system designed 
for the interim period is proving to be an intolerable burden for the 
home health agencies that serve Vermont's Medicare beneficiaries.
  This bill would do two things to remove the current threat to quality 
home care. First, the bill delays the implementation of the interim 
payment system for one year. This will minimize its impact on agencies 
as a prospective payment system is put in place. Second, the base year 
for establishing per patient limits will shift from the current 
designation of fiscal year 1994, to either fiscal or calendar year 
1995. Care rendered in 1995 is a better reflection of the current mix 
of patients--and it captures the deterrent effect of Operation Restore 
Trust on fraud and abuse in areas where cost was inflated.
  My own State of Vermont is a good example of how the health care 
system can work to provide for high quality care for Medicare 
beneficiaries. Home health agencies are a critical link in the kind of 
health system that extends care over a continuum of options and 
settings. New technology and advances in medical practice permit 
hospitals to discharge patients earlier. They give persons suffering 
with acute or chronic illness the opportunity to receive care and live 
their lives in familiar surroundings. Time and time again, Vermont's 
home health agencies have proven their value by providing quality, 
cost-effective services to these patients. Yet time and again, federal 
policy seems to ensure that their good deeds should go punished.
  Furthermore, Vermont home health agencies have been able to provide 
quality service while consistently maintaining the lowest per capital 
reimbursement rates for home care in the country. The average Medicare 
payment per patient in Vermont is approximately $3,000 per year, one 
third lower than the national average, and far less than in high costs 
states where payments rise as high as $7,900 per patient per year. Now, 
Vermont agencies face a interim payment system established under the 
Balanced Budget Act of 1997 that is based on historical cost. Instead 
of being rewarded for their good work, Vermont agencies will have a 
much lower per patient limit under Medicare than agencies in high cost 
areas. According to a January 7 article in the Wall Street Journal, 
Vermont's 13 agencies could lose over $2 million next year by 
continuing to do what they always have done--providing efficient and 
essential services.
  Since the impact of the interim payment system became apparent, I 
have been in continuous contact with the Vermont Assembly of Home 
Health Agencies; the Vermont Agency of Human Services; and directors, 
trustees, employees, and patients of nearly every home health agency in 
the state. I firmly believe we must act to guard the health and welfare 
of a particularly vulnerable segment of the population. This 
legislation will help ensure that our home health care infrastructure 
is able to continue serving the patients that rely upon them.
                                 ______