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Federal Update: A Double-Barreled Government Shutdown

by Published On: Aug 26, 2013Updated On: Sep 06, 2013

This fall, Congress faces a double-barreled government shutdown threat. In addition to the by-now routine need to pass a continuing resolution to keep the government in operation when fiscal year 2014 begins on October 1, an increase in the federal debt ceiling also will be necessary.

Here is the latest look at where issues related to aging services stand in Congress:

Senior Housing/Home and Community-Based Services

The U.S. House of Representatives and the U.S. Senate are having trouble passing the regular fiscal 2014 spending bills this year because the 2 houses are using different targets for total federal spending. 

Because the budget and spending process has broken down, Congress will have to pass a continuing resolution before October 1 to keep the federal government and its programs in operation.

Right before the August recess, both the House and Senate failed to pass the appropriations bill that funds federal transportation and housing programs, including the Section 202 affordable senior housing program.

In all likelihood, senior-housing funding will be rolled into the continuing resolution. This will also be the case with money for Older Americans Act programs that fund home and community-based services.

We continue to advocate for Congress to appropriate at least $400 million for the Section 202 program. Out of that amount, we are seeking $20 million for new development as a housing with services demonstration.

Medicare and Medicaid

Medicare and Medicaid likely will come under discussion when Congress and the President negotiate an increase in the statutory debt ceiling, which limits the federal government’s authority to continue borrowing.

The House Ways and Means Committee and Senate Finance Committee jointly solicited stakeholder input as to how economies could be achieved in Medicare spending on post-acute care. 

The committees have not yet indicated how they plan to use the feedback they received, but it could inform discussions on federal budget deficit reduction this fall.

The comments we filed with the committees, which were largely based on the principles developed by our Public Policy Congress, made the following points:

  • The Affordable Care has already caused slower growth in per-beneficiary Medicare spending. Drastic spending cutbacks are not necessary. We oppose any more across-the-board cuts in reimbursement.

  • We have advocated for changes in the Medicare payment systems for skilled nursing facility, home health, hospice, and outpatient therapy and continue to recommend these reforms to policymakers. Current incentives for clinically inappropriate services should be replaced with payment systems that reward quality outcomes.

  • In post-acute care, ACA savings will be achieved in part by revising the home health, hospice, and nursing home payment systems to better target scarce resources on care and hold down annual adjustments to below the rate of inflation, in line with increasing productivity.

  • In addition, ACA reforms in Medicare and the health care delivery system generally will better integrate services and make health and long term care more cost-effective. Expanded use of technology, in which we are leaders promoting innovation, is a critical part of this transformation.

  • Addressing the underlying causes of health care cost inflation can build on the reforms of the Affordable Care Act by using provider payment reform to promote value and accelerate delivery system innovation and by giving consumers information and positive incentives to choose high-value care and care systems.

  • Medicare and Medicaid both should meet the same standard for adequate payment.

Medicare legislation

  • Observation Days: We are working to pass H.R. 1179 and S. 569, legislation to correct the observation days problem by counting time a beneficiary spends in a hospital under observation toward the three-day stay requirement for coverage of subsequent post-acute care.

  • Sustainable Growth Rate (SGR): Every year, physicians and other health care providers reimbursed according to the physician fee schedule face a large and growing reimbursement cut due to the flawed formula for figuring annual payment updates that was passed in 1997. Congressional concern over doctors dropping out of the Medicare program has led to bipartisan support for attempting to permanently correct the SGR.

The U.S. House Energy and Commerce Committee has approved legislation to permanently correct the SGR. The committee's measure did not contain any of the "pay-fors" to offset the cost of fixing the SGR; those provisions have been left to the U.S. House Ways and Means Committee to write. It helps that the CBO recently dropped the estimated cost of an SGR fix from well over $200 billion over 10 years to $139 billion over the same period.

We have 3 concerns related to the legislation:

  • Medicare payment rates for physical, occupational and speech therapy in certain settings are based on the physician fee schedule. Many of our members provide these services and therefore are affected by the SGR.

  • The annual, temporary “doc fix” bills Congress has passed to prevent physician Medicare cuts have become vehicles for other essential Medicare provisions. In particular, the therapy caps exceptions process now sunsets every year. Doc fix legislation has been the vehicle for keeping the exceptions process in effect. We support legislation that has been introduced to repeal the therapy caps, and we are urging Congress to include these provisions in SGR reform legislation.

  • We also are urging Congress not to make post-acute care providers part of the “pay-for” to cover the $139 billion price tag for SGR reform. Skilled nursing facilities and home health care providers already have experienced significant reductions in Medicare reimbursement over the past few years, not to mention what has been going on with Medicaid in various states. 

Long-Term Care Commission 

The commission held four public meetings this summer, hearing from a variety of stakeholders. 

Robyn Stone, LeadingAge's Senior Vice President for Research, appeared before the commission on July 17, discussing the evolution in nursing homes and other residential long-term services and supports options.

Stone urged the commission to pay particular attention to the needs of middle-income people who have few mechanisms to plan for their long-term services and supports needs.

The commission has also heard from academic experts and representatives of long-term care insurance companies, home care providers, family caregivers, and federal agencies.

Testimony heard by the commission is on its website.

The commission plans to wrap up its work in September.


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