The Health of Home Health Care

Gwen B. Turnbull, RN, BS, CETN

T oward the end of last year, the Office of Inspector General (OIG) from the Department of Health and Human Services (DHHS) published three reports1-3 on how the home health industry was managing after Medicare?s home healthcare prospective payment system (PPS) was initiated at the end of 2000. Medicare data show that between 1997 and 2000, the number of Medicare-certified home health agencies (HHAs) dropped 32% from 10,556 to 7,175. Between fiscal years 1991 and 1997, Medicare annual expenses for home care rose from $4.7 billion to $17.6 billion. The Centers for Medicare and Medicaid Services (CMS) believes this quadrupling of costs was due to an increase in the number of beneficiaries receiving home care and the number of visits they received. After enforcement of the Balanced Budget Act of 1997 (BBA 97), home health service spending began to drop and was $8.7 billion in 1999.

Medicare Beneficiary Access to Home Health Care

The dramatic decrease in the number of providers and lowered home health expenditures raised concern over whether patients had adequate access to home health services, prompting OIG investigations. Interestingly, however, a survey of 208 hospital discharge planners showed that 89% of them experienced no difficulty in placing Medicare patients in need of home health care. About 25% of the discharge planners surveyed reported experiences in delays in placement, particularly for patients with wounds because "they require many expensive supplies and frequent visits by home health staff."1 Most attributed these difficulties to changes in admitting patterns by HHAs, changes in staffing patterns, or the effect of agency closings in their service area. Many HHAs have adopted new admission and discharge practices since PPS was implemented. Beneficiaries most affected by these changes seemed to be those with short-term, high-intensity needs of chronic diseases, and/or those needing complex wound care or two visits a day. This coincides with empirical evidence that many HHAs have established admission criteria for patients with wounds (eg, regarding wound debridement, albumin levels, and the like).

Another survey2 found that 38% of Medicare beneficiaries who started home health care in 2000 had not been in the hospital or a skilled nursing facility before being admitted to home care. A comparison of these "community beneficiaries" and hospital-discharged patients revealed some evidence that community beneficiaries who have more chronic conditions, along with those with certain medical conditions, are unable to obtain Medicare home health services. All respondents in the survey agreed that physicians play the most prominent role in connecting community beneficiaries to home health services.

The Role of the Physician in Home Health

In addition to a nationwide nursing shortage and home health PPS, other Medicare trends have impacted home health care. In January 1999, the OIG issued a special fraud alert about the role of physicians in certifying Medicare services. Physicians were cautioned not to: 1) prescribe services and items as a courtesy to a patient or service provider, nor prescribe medical equipment without first making sure it was medically necessary; 2) knowingly or recklessly sign false or misleading medical certifications; and (3) accept kickbacks in return for their signature.


1. Department of Health and Human Services, Office of Inspector General. Access to Home Health Care After Hospital Discharge 2001. July 2001. OEI-02-01-00180. Available at: Accessed February 26, 2002.
2. Rehnquist J. Medicare Home Health Care Community Beneficiaries 2001. Department of Health and Human Services, Office of Inspector General. October 2001. OEI-02-01-00070. Available at: Accessed February 26, 2002.
3. Rehnquist J. The Physician?s Role in Medicare Home Health 2001. Department of Health and Human Services, Office of Inspector General. December 2001. OEI-02-00-00620. Available at: Accessed February 26, 2002.
4. American Association for Homecare. AA Homecare Update. AA Homecare meets with GAO on 15% issue. February 2, 2002:4. Available at: Accessed February 19, 2002.

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