[Congressional Record Volume 144, Number 101 (Friday, July 24, 1998)]
[Senate]
[Pages S8996-S8997]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BOND (for himself, Mr. Hollings, Mr. Faircloth, Mr. 
        Cochran, and Mr. Bennett):
  S. 2354. A bill to amend title XVIII of the Social Security Act to 
impose a moratorium on the implementation of the per beneficiary limits 
under the interim payment system for home health agencies, and to 
modify the standards for calculating the per visit cost limits and the 
rates for prospective payment systems under the medicare home health 
benefit to achieve fair reimbursement payment rates, and for other 
purposes; to the Committee on Finance.


         medical home health beneficiary protection act of 1998

  Mr. BOND. Mr. President, I rise today to introduce the ``Medicare 
Home Health Beneficiary Protection Act of 1998'' on behalf of myself, 
Mr. Hollings, Mr. Faircloth, and Mr. Cochran.
  I have long believed that home care is the key to fulfilling the 
desire of virtually all seniors and those with disabilities to remain 
independent and within the comfort of their own homes. Home care is 
also often the only source of care for many disabled individuals and 
frail elderly, especially those living in underserved rural and urban 
areas of our country.
  Today, however, home health care is facing a crisis.
  In an effort to reduce Medicare home health expenditures and fraud 
and abuse, the Balanced Budget Act of 1997 replaces cost-based 
reimbursement for home health services with a Prospective Payment 
System (PPS), effective October 1, 1999. In the meantime, Congress, at 
the recommendation of the Health Care Financing Administration (HCFA), 
imposed an Interim Payment System (IPS), or new per beneficiary caps on 
home health agencies.
  There is no question that transitioning home health into a PPS is 
needed to ensure that all home health providers are cost-effective in 
the deliverance of services. But is also quite clear that the current 
IPS, coupled with HCFA's interpretation of the surety bond statute, is 
threatening access to these invaluable services throughout our nation. 
Quite simply, the IPS is fatally flawed and works tremendous injustice 
and hardship.
  In my home State of Missouri, reputable home health agencies provide 
high quality care to over 124,000 seniors and disabled are facing a 
crisis. I support making the deliverance of services more efficient and 
rooting out bad actors in the Medicare home health program, but I am 
deeply concerned about a punitive IPS which is driving scrupulous, 
quality providers out of business. In Missouri alone, over 35 home 
health agencies have shut their doors since enactment of the BBA of 
1997. Nationwide, over 1000 home health providers have closed or 
stopped accepting Medicare patients.
  In St. Louis, the two largest, freestanding home health providers 
closed their doors this year--leaving hundreds of elderly and disabled 
patients searching for a new provider. The Visiting Nurse Association 
of St. Louis which served the St. Louis area for 87 years eliminated 
all of their Medicare home health services as of May, forcing over 600 
patients to find a new source of care.
  It is imperative that Congress act now to impose a moratorium on the 
IPS. My bill not only accomplishes this equitable goal, but it also 
puts pressure on HCFA to move expeditiously towards the establishment 
of PPS for home care.
  I have written a letter to Secretary Shalala outlining the concerns 
and outlining the serious situation and I have asked she move 
expeditiously on this.
  A study conducted by The George Washington University Medical Center, 
Center for Health Policy Research, entitled ``Medicare Home Health 
Services: An Analysis of the Implications of the Balanced Budget Act of 
1997 for Access and Quality'', confirms why Congress must take 
expedited action in removing the IPS.
  Summarizing, the study concluded that:
  The home care population represents an increasingly sicker population 
requiring more acute management of chronic illness and higher intensity 
acute care;
  The BBA's reductions in Medicare home health coverage and financing 
can be expected to affect the sickest and highest cost patients and 
punish the very agencies that specialize in the provision of care to 
this population;
  The most severe effects of the interim payment system fall on the 
sickest patients living in states with the lowest utilization patterns;
  The BBA's interim payment system will shift costs to other payers 
(notably Medicaid) while rewarding inefficient agencies who care for 
relatively healthier patients; and
  The interim payment system will make it more difficult to design and 
implement the permanent prospective payment system scheduled to become 
effective in FY 2000.
  To those, I might add, Mr. President, when you take a look at cost 
when you force people out of home health care if they are Medicare-
eligible beneficiaries, you are going to wind up putting them in 
institutions where the cost will be significantly greater and the 
benefits to the individuals served and to the communities will be far 
less.
  This is false economy and it is causing a real crisis in communities 
throughout our country. So not only are beneficiaries and providers of 
home health alerting us to the devastation of this system, but outside 
experts are also telling us why we must revisit this issue.

  Reducing Medicare's growth rate is a worthy and much needed goal; 
however, doing it in such a way that threatens access to critical home 
health services is downright unconscionable. Truly reforming Medicare 
means more than simply ratcheting down payments to providers and 
services to beneficiaries. While this approach is the short-term 
solution, it has serious consequences for many vulnerable patients and 
honest providers.
  Mr. President, I want to conclude my remarks by recognizing the 
efforts of my distinguished colleague from Iowa and Chairman of the 
Senate Committee on Aging, Senator Chuck Grassley, who first 
highlighted the devastating impact of the IPS and HCFA's surety bond 
rule on Medicare beneficiaries and home health providers. I thank him 
for his dedication and leadership and look forward to working with him 
to rectify this problem.
  I ask unanimous consent that letters from the National Easter Seal 
Society and the National Council of Senior Citizens as well as my 
letter to Secretary Shalala dated July 24, be printed in the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                     National Easter Seal Society,


                                     Office of Public Affairs,

                                    Washington, DC, July 23, 1998.
     Hon. Christopher Bond,
     U.S. Senate,
     Washington, DC.
       Dear Senator Bond: Easter Seals is pleased to support your 
     legislation to place a moratorium on the Medicare interim 
     payment system (IPS) for home health agencies

[[Page S8997]]

     and the automatic payment reductions slated for 1999. These 
     Balanced Budget Act (BBA) measures threaten access to 
     essential home health services for Medicare beneficiaries, 
     particularly those with significant disabilities and chronic 
     conditions. They represent flawed approaches to reducing 
     Medicare spending that will have a devastating impact on 
     beneficiaries and families, and force high-quality providers, 
     including Easter Seals, from the Medicare program.
       Easter Seals is dedicated to assisting people with 
     disabilities to live with equality, dignity, and 
     independence. Each year, Easter Seals serves more than one 
     million persons through a nationwide network of 106 
     affiliated organizations that offer a wide range of home and 
     community-based services, including medical and vocational 
     rehabilitation, early intervention and special education 
     services, assistive technology, housing, and camping and 
     recreation services. Easter Seals provides quality care, 
     including home health care, to thousands of Medicare 
     beneficiaries annually. A significant percentage of these 
     beneficiaries have catastrophic, chronic, and/or medically 
     complex conditions. It is these individuals that will suffer 
     most under BBA.
       Easter Seals' supports a transition to prospective payment 
     in home health that is responsible, cost-effective, and 
     consistent with high quality care. Payment methodologies 
     should reflect the varying, legitimate service needs of 
     medicare beneficiaries.
       Easter Seals greatly appreciates your efforts to halt 
     implementation of IPS by the Health Care Financing 
     Administration until such time that an appropriate 
     prospective payment system can be adopted. Easter Seals also 
     opposes the sweeping reduction of payment for home health 
     services, that may take effect in 1999, as a flawed strategy 
     that will cause undue harm to beneficiaries and service 
     providers. These BBA provisions undermine appropriate, 
     quality home and community services for Medicare 
     beneficiaries and drive away efficient and caring providers, 
     such as Easter Seals, that serve them. Thank you very much 
     for your leadership with this important legislative 
     initiative.
           Sincerely,

                                             Randall L. Rutta,

                                                   Vice President,
     Government Relations.
                                  ____

                                               National Council of


                                              Senior Citizens,

                                 Silver Spring, MD, July 23, 1998.
     Hon. Christopher Bond,
     Senate Russell Office Building,
     Washington, DC.
       Dear Senator Bond: The National Council of Senior Citizens 
     applauds your leadership and commitment to addressing the 
     very serious problems that the new Medicare interim payment 
     system (IPS) poses for disabled and elderly individuals in 
     need of home care.
       As you so well know, home care patients are among America's 
     most vulnerable citizens. They tend to be people who are 
     sick, frail, lower income, and who depend upon this care for 
     their very existence and dignity.
       The interim payment system has threatened to take away this 
     vital lifeline. Our Board has taken a position that IPS must 
     be reconsidered on an urgent basis. We urge you to introduce 
     legislation to impose an immediate and retroactive moratorium 
     on IPS. Only in this way can Congress bring about a speedy 
     solution to this pressing problem.
       Thank you again for your vision and leadership. America's 
     Medicare beneficiaries are looking to you and the Congress 
     for a remedy to this devastating system.
           Sincerely,
                                                   Steve Protulis,
     Executive Director.
                                  ____

                                                      U.S. Senate,


                                  Committee on Small Business,

                                    Washington, DC, July 24, 1998.
     Hon. Donna E. Shalala,
     Secretary, Department of Health and Human Services, 
         Washington, DC.
       Dear Madam Secretary: It has become clear that the Health 
     Care Financing Administration's (HCFA) implementation of the 
     home health Interim Payment System (IPS) and the surety bond 
     requirements is having a devastating impact on thousands of 
     conscientious and cost-effective home health agencies and the 
     Medicare home health beneficiaries, especially the most 
     medically complex patients.
       As you know, the Senate Committee on Small Business held a 
     hearing on July 15 to give home health providers, HCFA, and 
     others the opportunity to examine these issues and explore 
     possible solutions. Nine witnesses, including representatives 
     of small freestanding home health agencies, testified about 
     the crippling effect HCFA's rules are having on reputable 
     small agencies and their ability to provide high-quality care 
     to their patients.
       I remain extremely disappointed that HCFA turned down the 
     Committee's invitation to attend this important hearing. 
     Unfortunately, HCFA's decision not to testify was interpreted 
     as indifference to the impact its actions are having on small 
     home health providers and patients. This decision was 
     characterized by members of our Committee as ``reckless, 
     arrogant, and disgraceful.''
       It is imperative that the Department of HHS and HCFA work 
     with Congress to enact an immediate moratorium on the IPS, 
     until, home health moves into a prospective payment system, 
     to stop the unjustified closure of scrupulous home health 
     agencies and further loss of beneficiary access to home care 
     services. The IPS is fatally flawed and does not comport with 
     what Congress intended. Rather than reduce the rate of growth 
     of the Medicare home health benefit, as we were led to 
     believe would be the result, the IPS is causing a precipitous 
     decline from last year's reimbursement, leading to serious 
     dislocation all over the country.
       Hundreds of home care providers are literally on the brink 
     of closure. Many have already closed, leaving the sickest 
     patients searching for new home health care providers. I am 
     aware of at least one state where the IPS-related closure of 
     a home health agency has led to the loss of all home health 
     services for many rural patients.
       Imposing a moratorium on the IPS would give Congress an 
     opportunity to work with the Department of HHS and HCFA, 
     Medicare consumers, and the home health industry to develop a 
     solution to this critical situation, which must be solved by 
     the end of the 105th Congress. This crisis requires your 
     immediate attention.
       As you are aware, our July 15 hearing also focused on 
     HCFA's regulations to implement the surety bond requirements 
     in the Balanced Budget Act of 1997. The recent suspension of 
     the deadline for compliance with these regulations narrowly 
     averted a further crisis in home health care. It was the 
     intent of Congress that the home health surety bond 
     requirement act as a guarantee against fraud by home health 
     agencies. HCFA took this reasonable tool intended to curb 
     home health fraud and, as implemented, turned it into an 
     unworkable, punitive vehicle for the collection of routine 
     overpayment. HCFA's distortion of Congressional intent has 
     now forced the agency to suspend its flawed bond regulations. 
     Pending further rulemakng, HCFA should withdraw its surety 
     regulations and immediately release all existing bonds from 
     potential liability for recovery of overpayments.
       I urge HCFA to work with Congress, home health providers, 
     and the surety bond industry in developing new surety bond 
     regulations in full compliance with the Administrative 
     Procedures Act and the Regulatory Flexibility Act as amended 
     in 1996. There must not be a repetition of the chaotic 
     situation which caused Congress to intervene in the surety 
     bond crisis in the first place.
       Your prompt reply is appreciated.
           Sincerely,
                                              Christopher S. Bond,
                                                         Chairman.
                                 ______