[Update] Home Health Leaders Applaud Permanent Medicare Doc Fix

Legislation to replace Medicare’s controversial Sustainable Growth Rate (SGR) now has been signed into law. While some concerns regarding reimbursements linger, the home health community largely commends Congress.

The bipartisan Medicare Access and CHIP Reauthorization Act legislation to repeal the long-standing SGR, colloquially known as the “doc fix,” was signed Thursday by President Barack Obama, following a 392-7 vote in the House in late March and an overwhelming 92-8 vote in the Senate on Tuesday.

“I applaud the Members of Congress from both parties who came together to pass the Medicare Access and CHIP Reauthorization Act,” Obama said in a statement issued Tuesday. “This bipartisan bill will protect health coverage for millions of Americans, and I will be proud to sign it into law.”

Home health groups, who have already been subject to a series of Medicare reimbursement cuts in recent years, including the annual 3.5% rebasing cuts, still harbor concerns as Congress chose to offset a portion of the SGR legislation by limiting payments to Medicare post-acute services, home health included.

The legislation limits Medicare reimbursement increases to home health providers scheduled for 2018 to just 1%. When compared to the typical 3.2% annual reimbursement increase, this market basket reduction will result in a cut of $3.4 billion over a 10-year period, according to the Partnership for Quality Home Health Care.

“While we are thankful for the bipartisan solution to permanently repeal SGR that includes the Medicare home health rural safeguard, we are disappointed in the restricted market basket rate for home healthcare,” said Eric Berger, CEO of the Partnership.

The additional cut arrives following a four-year 14% rebasing cut to Medicare home health funding that was implemented on January 1, 2014, which home health groups argue threatens the jobs of more than 460,000 industry professionals who provide skilled care for 1.3 million beneficiaries.

“To protect homebound seniors from any further threats, we encourage Congress to secure savings through value-based purchasing programs that promote coordinated, patient centered care over across-the-board cuts,” stated Berger.

In response, the home health community has put forth several proposals, such as the Securing Access Via Excellence (SAVE) Medicare Home Health Act, which would stop the rebasing cut beginning in 2016 and advance hospitals readmission reforms.

Proponents of the proposal claim that not only would the initiative enable more seniors to remain in their homes rather than go to institutional settings, but it would also produce significant savings for the Medicare program.

The SGR repeal legislation does, however, include key provisions that aim to protect access to skilled home health care for homebound seniors living in rural areas by extending the Medicare home health rural safeguard. This policy extends an additional 3% payment for home health services provided to rural patients through the end of 2017.

For the broader health care sector, the repeal of the SGR creates greater certainty as Congress will no longer be tasked with preserving physician payment rates by passing a short-term “fix” year after year—which have often been offset by slashing reimbursements to other provider types.

“This legislation is the first step in establishing long-term stability to the profession,” said Mark Parkinson, president and CEO of the American Health Care Association. “The next step includes a continued bipartisan effort in other important areas, such as thoughtful payment reform. We look forward to continuing our important work with Congress and delivering even more solutions for quality care.”

Written by Jason Oliva