[Congressional Record Volume 144, Number 141 (Friday, October 9, 1998)]
[Senate]
[Page S12182]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROTH (for himself and Mr. Moynihan):
  S. 2616. A bill to amend title XVIII of the Social Security Act to 
make revisions in the per beneficiary and per visit payment limits on 
payment for health services under the Medicare program; to the 
Committee on Finance.


                      health services legislation

  Mr. MOYNIHAN. Mr. President, I am pleased to join my distinguished 
Chairman, Senator Roth, and other colleagues in introducing a bill to 
improve the home health interim payment system.
  Prior to the Balanced Budget Act of 1997 (BBA), home health agencies 
were reimbursed on a cost basis for all their costs, as long as they 
maintained average costs below certain limits. That payment system 
provided incentives for home health agencies to increase the volume of 
services delivered to patients, and it attracted many new agencies to 
the program. From 1989 to 1996, Medicare home health payments grew at 
an average annual rate of 33 percent, while the number of home health 
agencies increased from about 5,700 in 1989 to more than 10,000 in 
1997.
  In order to constrain the growth in costs and usage of home care, the 
BBA included provisions that would establish a Prospective Payment 
System (PPS) for home health care, a method of paying health care 
providers whereby rates are established in advance. An interim payment 
system (IPS) was also established while the Health Care Financing 
Administration works to develop the PPS for home health care agencies.
  The home health care industry is dissatisfied with the IPS. The 
resulting concern expressed by many Members of Congress prompted us to 
ask the General Accounting Office (GAO) to examine the question of 
beneficiary access to home care. While the GAO found that neither 
agency closures nor the interim payment system significantly affected 
beneficiary access to care, I remain concerned that the potential 
closure of many more home health agencies might ultimately affect the 
care that beneficiaries receive, particularly beneficiaries with 
chronic illness.
  The bill we are introducing today adjusts the interim payment system 
to achieve equity and fairness in payments to home health agencies. It 
would reduce extreme variations in payment limits applicable to old 
agencies within states and across states and would reduce artificial 
payment level differences between ``old'' and ``new'' agencies. The 
bill would provide all agencies a longer transition period in which to 
adjust to changed payment limits.
  Clearly, since the bill may not address all the concerns raised by 
Medicare beneficiaries and by home health agencies, we should revisit 
this issue next year. A thorough review is needed to determine whether 
the funding mechanism for home health is sufficient, fair and 
appropriate, and whether the benefit is meeting the needs of Medicare 
beneficiaries.
  America's home health agencies provide invaluable services that have 
given many Medicare beneficiaries the ability to stay home while 
receiving medical care. An adjustment to the interim payment system and 
delay in further payment reductions will enable home health agencies to 
survive the transition into the prospective payment system while 
continuing to provide essential care for beneficiaries.

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