[Congressional Record Volume 144, Number 109 (Wednesday, August 5, 1998)]
[Extensions of Remarks]
[Pages E1556-E1557]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        INTRODUCTION OF HERO ACT

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                           HON. VAN HILLEARY

                              of tennessee

                    in the house of representatives

                       Wednesday, August 5, 1998

  Mr. HILLEARY. Mr. Speaker, the Balanced Budget Act (BBA) made many 
changes to the home health industry. Probably the most significant of 
these was the implementation of an Interim Payment System (IPS) which 
changed the way home health agencies receive Medicare reimbursements. 
The IPS was supposed to be a temporary and efficient solution. Instead, 
it has been an unmitigated disaster. All parties for the most part seem 
unanimous to the fact that the system is not working and that something 
must be done.
  As a result many agencies have either closed or dropped coverage from 
otherwise deserving senior patients. Many of our elderly have died 
because of these closures and removals of coverage.
  Making the problem even more severe is the fact that the Health Care 
Financing Administration (HCFA), who is supposed to implement the 
permanent solution to aid home health agencies, has stated that they 
will be unable to make their deadline to end the IPS of October 1, 1999 
due to among other reasons, severe Year 2000 computer problems. As a 
result the situation will only get worse. Many agencies that have cut 
as far as they can will not be able to hold out much longer.
  Yet, the bad news does not stop there. If HCFA fails to make the 
October 1, 1999 deadline, an across the board 15% reduction will occur 
in all reimbursements to home health agencies. This will surely drive 
out all the home health agencies left. As a result, even more of our 
seniors will pass away or be shipped to nursing homes to live their 
last days in isolation. Not only would this be costlier for taxpayers, 
but it is simply wrong. Something, very simply, needs to be done.
  That is why I am introducing the Homebound Elderly Relief Opportunity 
Act, also known as the HERO Act. It aims to solve this problem by 
accomplishing seven things.
  First, it creates a ``moratorium'' on the IPS. In other words the 
system goes back to the way it did pre-BBA with raised patient per 
visit cost limits. This is what all home health agencies need across 
the country to survive.
  Second, it allows the home health system to recapture some of the 
unanticipated savings that the Balanced Budget Act estimated while 
still keeping the budget balanced. The savings in the home health 
industry have far surpassed the original savings envisioned by the BBA. 
This bill quite simply allows the industry the ability to recapture any 
unanticipated future savings. No longer will agencies be forced to go 
out of business and people removed from their health care providers. 
The moratorium will help this to occur.
  Third, it establishes a ``trigger'' that will keep the budget in 
balance. While most experts in the field estimate that this trigger 
will likely not even be reached, this trigger is the essential 
component in attempting to maintain a balanced budget. This bill is 
designed to be budget neutral by using actual CBO estimates of spending 
on home health care under the BBA and capping at those levels. This cap 
will prevent PAYGO problems.
  Fourth, the trigger created will then allow states more flexibility 
than found in an other legislation by allowing each agency to choose 
between the 98% value of two formulas. Some states, like my home of 
Tennessee, would have the ability to choose a mix of a 75% ``regional'' 
component and a 25% ``national'' component. Other states that are 
structured differently, like New York and New Jersey would choose a 
calculation of 75% ``national'' component and a 25% ``regional'' cost 
comparison. Thus, this is one of the first bills that aims to be 
regional neutral. No longer will Louisiana, Tennessee, Texas, and 
Oklahoma be pitted against New York, New Jersey, and Vermont.
  Fifth, it gives agencies who incur unusually high costs due to an 
abnormal number of high cost patients (such as through emergency care) 
to claim outlier status. An outlier status would allow agencies to care 
for patients with more freedom. However, this outlier status would come 
out of the funds created by the moratorium and fall under the money as 
used in the ``trigger'' explained earlier. Thus, even this provision 
aims to be in balance.
  Sixth, it allows relief for new agencies and establishes a proration 
of Medicare benefits among agencies who share a patient. No longer will 
new agencies be unable to open due to the draconian provisions of the 
IPS. In addition, where agencies share the same patient, one agency 
will not be able to take all

[[Page E1557]]

the Medicare payments from an eligible enrollee, thereby leaving the 
second agency without payment.
  Seventh, this legislation relieves the impending doom of the 15% 
across the board reduction of October 1, 1999. The trigger caps are in 
place in a similar fashion off January 1998 estimates in order to keep 
the same budget neutrality the rest of the bill tries to attain.
  I urge all other members who see the need for a reform in IPS to back 
my bill. The Homebound Elderly Relief Opportunity (HERO) Act is a 
common sense way to relieve this system in a sensible and financially 
responsible manner.

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