[Congressional Record Volume 144, Number 14 (Tuesday, February 24, 1998)]
[Extensions of Remarks]
[Pages E206-E207]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       INTRODUCTION OF H.R. 3205

                                 ______
                                 

                           HON. MERRILL COOK

                                of utah

                    in the house of representatives

                       Tuesday, February 24, 1998

  Mr. COOK. Mr. Speaker, I am pleased to join my colleague from 
Massachusetts, Congressman McGovern as an original cosponsor of H.R. 
3205, legislation that will address some serious problems caused by 
certain provisions included in the Balanced Budget Act.
  There were several provisions included in the Balanced Budget Act 
intended to target Medicare waste and fraud occurring in the home care 
industry. However, some of these provisions missed the target, and one, 
the so-called ``Interim Payment System''--or IPS--is causing a great 
deal of hardship and heartbreak for seniors in Utah and across the 
nation.
  The IPS was intended to transition the home care industry from a 
retrospective, cost-based reimbursement system to a prospective payment 
system. The IPS will impose tight spending limits on home care 
providers. A prospective payment system is currently used by Medicare 
to calculate reimbursement to hospitals and other providers. Moving 
home care to a prospective payment system is a sensible reform which I 
support. However, we also need a sensible transition to a prospective 
payment system. The IPS as it has been implemented by the Health Care 
Financing Administration, is not providing a sensible transition. 
Instead, the IPS is creating chaos and financial distress for home care 
providers and beneficiaries. Why is it doing that?
  First, the IPS has put the cart before the horse. It was put in place 
beginning in October of last year. However, HCFA will not be able to 
tell home care agencies what their new IPS spending limits are until 
April of this year--at the earliest. Home care providers have to guess 
how much they need to cut back care. If they do not cut enough, they 
will be penalized. If they cut too much, it will obviously hurt 
beneficiaries. As one of my constituents who runs a home care agency 
wrote: ``we are operating completely in the dark.'' Common sense argues 
for announcing regulations first, then requiring compliance.
  Second, the IPS has created a Rube Goldbert system where home care 
providers are rewarded or punished depending on what kind of fiscal 
year they use. Let me try to explain this. Under the IPS, reimbursement 
rates are projected from a base year which is defined as ``fiscal year 
1994.'' Because different agencies use different fiscal years, this 
provision will impact the agencies differently. This grossly distorts 
payments to home health care providers and the entire market for home 
care. Agencies who have a ``favorable'' fiscal year will have a 
competitive advantage over agencies with an ``unfavorable'' fiscal 
year. For example, an agency with a fiscal year that begins on October 
1, will have its reimbursement rate based partially on what it was 
spending in 1993. Other agencies base years will be in calendar year 
1994, when their spending may

[[Page E207]]

have been higher than a fiscal year that straddles 1993 and 1994.
  The legislation that Congressman McGovern and I have introduced will 
address these problems and provide a sensible transition to a 
prospective payment system. First, it will extend HCFA's deadline for 
developing the Interim Payment System to August, 1998, and delay 
implementation of the caps under the IPS until October 1, 1998. That 
way the regulations will be announced before the home care providers 
have to comply. It will let the providers know what kind of cost limits 
they need to meet and more importantly, it will give them more time to 
meet those limits.
  H.R. 3205 will also change the base year used to calculate the 
agency's cap. Instead of ``federal fiscal year 1994,'' the home health 
care providers would be permitted to use a cost reporting period ending 
either during fiscal year 1995, or calendar 1995. This will soften the 
severity of the cuts by moving the base year forward to 1995 and 
eliminate the distortions created by agencies' use of different fiscal 
years.
  While this bill applies directly to home care providers, it is 
obviously critically needed for the senior citizens who are the 
recipients of home care. Often home care makes all the difference 
between our senior citizens remaining independent and moving into 
institutional care. Many of the letters and phone calls that I am 
receiving from my elderly constituents emphasize the crucial difference 
that home care makes. More individuals receiving institutional care 
means more state and federal Medicaid spending. These provisions in the 
Balanced Budget Act could ultimately cost money as spending moves from 
the Medicare/home care side of the ledger to the Medicaid/nursing home 
side.
  Prior to the Balanced Budget Act, Medicare was in desperate need of 
reform. Most of the reforms included in the Balanced Budget Act are 
sensible and will help this vital program survive into the 21st 
Century. I want to commend Congressman McGovern for developing a 
sensible, measured bill that will address these serious problems. I 
look forward to working with him to see this legislation through to 
passage.

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