WASHINGTON – In an effort to reverse “the detrimental effects” on seniors of the Balanced Budget Act of 1997, Sen. Susan Collins Wednesday introduced the Home Health Care Stability Act of 2001.

If passed, Collins’ bill would eliminate a 15-percent cut in Medicare payments to home health agencies and make permanent a 10-percent add-on payment for home health services in rural areas.

The Balanced Budget Act of 1997 was intended to slow the growth in Medicare spending, Collins said. “Unfortunately, it has produced cuts in home health spending far beyond what Congress intended, and the results have been detrimental, especially in Maine. More than 11,000 seniors and disabled [people in Maine] lost access to home health care in the past two years.”

Collins, who has been a leader in trying to strengthen home health agencies, received support from 55 senators of both parties, who co-signed the legislation.

Her bill calls for eliminating the automatic 15-percent cut scheduled to go into effect on Oct. 1, 2002.

“An additional 15-percent cut would ring the death knell for those low-cost agencies which are currently struggling to hang on and would further reduce our seniors’ access to critical home health services,” Collins said.

This is the fourth year since she has started this battle, Collins said. “To simply keep delaying this cut is to leave the ‘sword of Damocles’ hanging over the head of our nation’s home health agencies, making it difficult for them to plan for how they are going to serve their Medicare patients in the future,” she said.

Many home health agencies in Maine would not be able to handle a cut, said Helen Genco, president and CEO of Bangor Area Visiting Nurses. “A cut would be awful. We are as lean as we can be right now,” she said.

Genco predicted that a cut would put more Maine agencies out of business. “A cut would be the biggest challenge I have ever seen in home health care, and I have been in this business for 16 years,” she said.

In addition to the permanent elimination of the cut, Collins’ bill would make permanent a 10-percent add-on payment for home health patients in rural areas provided in the Medicare, Medicaid and S-Chip Benefit Improvement and Protection Act of 2000.

This additional payment is especially important in states like Maine, where seniors live far away from hospitals and prefer to receive home health care, Collins said. “Surveys have shown that the delivery of home health care services in rural areas can be as much as 12 to 15 percent more costly because of the extra travel time required, higher transportation expense and other factors,” Collins said.

“Until the Balanced Budget Act of 1997, visits we made were completely reimbursed as long as our costs were reasonable and we followed the guidelines,” Genco said. But the Act established an Interim Payment System that reimbursed the cost of the visit only if it remained under a calculated cap, she said.

As a result of the reduced funds, Genco had to cut down visits and lay off eight employees. “Working in this business used to be so attractive,” she said, “but the stipulations and costs make it really tough to recruit and retain employees.”

In 1999, the Medicare Payment Advisory Commission conducted a survey on the effects of the IPS on home health care agencies around the country and reported that 31 percent of those asked said they had to discharge patients.

“But theoretically they are better off now after the implementation of the Medicare, Medicaid and S-Chip Benefit Improvement and Protection Act of 2000, which gives them additional monies,” said Sally Kaplan, research director for post acute care at the Medicare Payment Advisory Commission.

That act also changed the interim payment system to the prospective payment system: “Upon assessment, we calculate the projected costs for the patient for a 60-day-episode and get reimbursement for those services,” Genco said. “I don’t like this system, either, but at least I know what I can expect,” she said.

“You hope your reimbursement for one patient is higher than what you actually need, so you can spend it on another patient who needs more services than projected,” she said.

Last year’s law was nothing more than a “small relief,” Collins said. “I don’t think this goes far enough.”