[Congressional Record Volume 145, Number 125 (Thursday, September 23, 1999)]
[Senate]
[Page S11363]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE:
  S. 1625. A bill to amend title XVIII of the Social Security Act to 
provide for a special reclassification rule for certain old agencies as 
new agencies under the home health interim payment system; to the 
Committee on Finance.


                       medicare home health care

 Ms. SNOWE. Mr. President, I rise today to offer legislation 
that will remedy a problem facing one of Maine's home health agencies--
Home Health & Hospice of St. Joseph, in Bangor, Maine. This bill would 
reclassify Home Health & Hospice of St. Joseph as a ``new agency'' 
under the Medicare Home Health Interim Payment System, allowing it a 
higher per-beneficiary rate.
  When Congress passed the Balanced Budget Act, the intention was to 
modestly control the dramatic growth rate of home health care agencies. 
But the broad financing constraints and administrative regulations 
codified in the Balanced Budget Act have had unintended consequences. 
Almost every week I hear concerns from home care agencies in Maine 
about the implementation of regulations and restrictions on these 
agencies.
  Since enactment of the Balanced Budget Act, many of our home 
healthcare agencies have found themselves in a position of financial 
insolvency. Nationwide, more than 2,000 agencies have closed since 
BBA's passage. The State of Maine had 90 Medicare/Medicaid certified 
home health care agencies in the beginning of 1998. By the beginning of 
1999, 16 of those agencies had closed.
  At the time of the BBA's enactment, the Congressional Budget Office 
expected home health care expenditures to drop by $75 billion over ten 
years. In March of this year, CBO examined the Medicare program 
expenditures of the home health agencies and increased the expected 
savings by $56 billion--a three-quarter increase over the same ten 
years!
  As a component of the general funding reductions enacted by the 
Balanced Budget Act, the law created detailed regulations in 
determining agency per-beneficiary payment limits. These regulations 
have had several unforeseen and unintended consequences when applied to 
real-life agencies.
  Home Health & Hospice of St. Joseph serves over 700 patients in 
Bangor, Maine and the surrounding area. Under the BBA, per-patient cost 
reimbursement is based solely on cost reporting ending in fiscal year 
1994. Unfortunately for Home Health & Hospice of St. Joseph--an 
established and vital component of Bangor's health care system--fiscal 
year 1994 was an unprecedented period of clinical and financial 
upheaval. As a result of these problems, the agency's per-patient 
reimbursement limitation is artificially low. And in spite of the 
extensive clinical and financial reforms enacted during this unique and 
transitional period, the cost data for this one year is significantly 
and permanently flawed.

  As a result of the anomalous cost report, the Medicare payment amount 
for Home Health & Hospice of St. Joseph is only 59 percent of the true 
costs of treating each patient. For every patient the agency treated in 
1998, it lost $1,148. The agency is a cost effective home health care 
agency: its actual per-patient cost of $2,752 is substantially below 
the national medial of approximately $3,200. Unfortunately, St. 
Joseph's anticipates an aggregate loss of $780,000 for its service to 
Medicare patients over 1998. Simply put, they cannot sustain such a 
deep loss of funding and continue to operate.
  Mr. President, I introduce this bill today in order to address the 
problem faced by Home Health & Hospice of St. Joseph. This legislation 
will reclassify Home Health & Hospice of St. Joseph as a ``new agency'' 
under the BBA, and is targeted to St. Joseph's. Mr. President, my state 
relies on home health agencies for much of its healthcare, and we 
cannot face the prospect of losing such a fine agency.
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