Medicare Payments For Home Health Services

Individuals with disabilities, chronic conditions, and functional impairments need a range of services and supports to keep living independently. However, there often is not a strong link between medical care provided in the home and the necessary social services and supports for independent living. Home health agencies and others are rising to the challenges of meeting the needs and demands of these populations to stay at home by exploring alternative models of care and payment approaches, the best use of their workforces, and technologies that can enhance independent living. All of these challenges and opportunities lead to the consideration of how home health care fits into the future health care system overall. On September 30 and October 1, 2014, the Institute of Medicine and the National Research Council convened a public workshop on the future of home health care. The workshop brought together a spectrum of public and private stakeholders and thought leaders to improve understanding of the current role of Medicare home health care in supporting aging in place and in helping high-risk, chronically ill, and disabled Americans receive health care in their communities. Through presentations and discussion, participants explored the evolving role of Medicare home health care in caring for Americans in the future, including how to integrate Medicare home health care into new models for the delivery of care and the future health care marketplace. The workshop also considered the key policy reforms and investments in workforces, technologies, and research needed to leverage the value of home health care to support older Americans, and research priorities that can help clarify the value of home health care. This summary captures important points raised by the individual speakers and workshop participants.

Medicare spending for home health care rose from $3.7 billion in 1990 to $17.8 billion in 1997, making it one of the fastest growing components of the program. To control spending, Congress passed an act which required HHS to develop a prospective payment system to replace cost-based payments for home health agencies. This report: documents the objectives, findings, & costs of the research & demonstration projects the Health Care Finance Admin. has funded that were related to the design of the prospective payment system; & assesses how these projects contributed to the proposed prospective payment system design & determines which design decisions were based on incomplete information. Charts & tables.

The Medicare home health benefit provides coverage for home visits by skilled health care professionals. To be eligible for the home health benefit, a beneficiary must meet three different criteria. The beneficiary must (1) be homebound, (2) require intermittent skilled nursing care and/or skilled rehabilitation services, and (3) be under the care of a physician who has established that the home health visits are medically necessary in a 60-day plan of care. A beneficiary who meets these requirements is entitled to a 60-day episode of Medicare coverage for home health visits, and is then entitled to an unlimited number of 60-day episodes so long as he or she continues to meet the eligibility requirements. There is no cost-sharing requirement for home health services. Roughly 9.6% of Medicare fee-for-service (FFS) beneficiaries (or 3.4 million individuals) used home health services in 2010. Home health services are provided through home health agencies (HHAs), most of which (90%) are freestanding -- HHAs not affiliated with an institution such as a hospital or a nursing facility. The number of HHAs participating in Medicare grew by 57% between 2000 and 2010 (from 7,528 to roughly 11,800), with a vast majority of the increase in for-profit freestanding HHAs. This book describes home health eligibility criteria, home health services, characteristics of Medicare beneficiaries who use home health services, and home health providers. Further, this book describes in detail the Medicare home health prospective payment system (HH PPS), provides an overview of Medicare home health payments, and discusses issues for Congress related to the Medicare home health benefit.