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Home-care companies could get pay cut
By MATTHEW PERRONE

WASHINGTON

Government advisers on Thursday are expected to recommend that lawmakers not increase payments to at-home health care providers for Medicare patients.

A panel of health care experts will vote on how to adjust government payments to various health care providers that participate in the federal health plan for seniors. The group submits its recommendations to Congress, where lawmakers will set payments for hospitals, physicians and other providers in 2009.

Analysts say advisers will likely recommend against raising payments to home-care companies like Amedisys Inc. and Gentiva Health Services Inc., since they are already projected to be reimbursed at a rate 11.5 percent above their actual costs for 2008.

While the panel's recommendations are designed to inform the 2009 budget, analysts said they could have implications for the second half of this year.

Because of disagreements between Democrats and Republicans over Medicare budgeting for 2008, lawmakers left Washington last month without funding the program for the full year. Instead, they passed a six-month funding plan and promised to revisit the Medicare issue before that money runs out in late June.

At the heart of the debate is how to avoid a 10 percent payment cut to physicians in Medicare, which is mandated by a complex government formula.

Democrats in the House wanted to offset the payment cut to physicians by instead reducing payments to private Medicare health plan operators, like Humana Inc. But Bush threatened to veto any bill that cuts payments to those private companies.

Home-care companies could be "vulnerable sources for Medicare savings," according to a note from Citigroup analyst Paul Heldman, especially since they were expecting the Medicare program to be a profit booster this year.

Makers of home-oxygen equipment could also be on the congressional chopping block later this year, Heldman said. Companies in that space include Invacare Corp. and Lincare Holdings Inc.
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