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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.
This is the definitive work on Medicare’s prospective payment system (PPS), which had its origins in the 1972 Social Security Amendments, was first applied to hospitals in 1983, and came to fruition with the Balanced Budget Act of 1997. Here, Rick Mayes and Robert A. Berenson, M.D., explain how Medicare’s innovative payment system triggered shifts in power away from the providers (hospitals and doctors) to the payers (government insurers and employers) and how providers have responded to encroachments on their professional and financial autonomy. They conclude with a discussion of the problems with the Medicare Modernization Act of 2003 and offer prescriptions for how policy makers can use Medicare payment policy to drive improvements in the U.S. health care system. Mayes and Berenson draw from interviews with more than sixty-five major policy makers—including former Treasury secretary Robert Rubin, U.S. Representatives Pete Stark and Henry Waxman, former White House chief of staff Leon Panetta, and former administrators of the Health Care Financing Administration Gail Wilensky, Bruce Vladeck, Nancy-Ann DeParle, and Tom Scully—to explore how this payment system worked and its significant effects on the U.S. medical landscape in the past twenty years. They argue that, although managed care was an important agent of change in the 1990s, the private sector has not been the major health care innovator in the United States; rather, Medicare’s transition to PPS both initiated and repeatedly intensified the economic restructuring of the U.S. health care system.