President Obama Releases Budget with Copays and Payment Impact for Home Care

President Barack Obama released his proposal for the Fiscal Year 2013 Federal Budget with a scaled back version of copayments for home health care as well as payment adjustments for all post-acute providers.

According to the President’s proposal, a home health copayment of $100 per home health episode would be established and would be applicable for episodes with five or more visits not preceded by a hospital or other inpatient post-acute care stay. This, the budget narrative continues, would ap­ply to new beneficiaries beginning in 2017. The President’s budget notes that this is consistent with a MedPAC recom­mendation to establish a per episode copayment, although MedPAC had recommended a more severe copayment of $150 per episode.

MedPAC’s recommnedation cited by the President’s budget team noted that “beneficiaries without a prior hospitalization account for a rising share of epi­sodes” and that “adding beneficiary cost sharing for home health care could be an additional mea­sure to encourage appropriate use of home health services.” This proposal is estimated to save approximately $350 million over 10 years.

According to the National Association for Home Care & Hospice (NAHC), the President’s Budget also includes a reduced Market Basket Index (inflation) update from 2014 to 2021. The proposed update reductions of 1.1 percentage points each year affect all post-acute providers. These reductions, NAHC states, would be in addition to the 2014 home health rate rebasing and the productivity adjustments starting in 2015. The President estimates this measure will save $63 billion over ten years taking into account the other adjustments for all post acute providers.

Additionally, the Independent Payment Advisory Board (IPAB), which was initially established in the Affordable Care Act, will be strengthened under the President’s budget proposal. The group is charged with keeping Medicare solvent by enacting cost-saving measures if Medicare spending exceeds certain levels. The President’s proposal essentially lowers those spending triggers.

The budget blueprint touts some of the fraud and abuse crackdown and prevention achievements the administration has made and advances suggestions for furthering that effort:

  • Cre­ate new initiatives to reduce improper payments in Medicare;
  • Dedicate penalties for failure to use electronic health records toward deficit reduction;
  • Update Medicare payments to more appropriately account for utilization of advanced imaging;
  • Re­quire prior authorization for advanced imaging;
  • Direct States to track high prescribers and utiliz­ers of prescription drugs in Medicaid to identify aberrant billing and prescribing patterns; and af­firm Medicaid’s position as a payer of last resort by removing exceptions to the requirement that State Medicaid agencies reject medical claims when another entity is legally liable to pay the claim.
  • Alleviate State program integrity reporting requirements by consolidating redundant error rate measure­ment programs to create a streamlined audit program with meaningful outcomes, while main­taining the Federal and State’s government abil­ity to identify and address improper Medicaid payments.

Finally, the President’s budget makes a commitment to follow through on the Department of Labor’s proposed rule on removing the so-called “companionship exemption” for allowing overtime and minimum wage protections.

For more information, view the President’s budget proposal here.

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