Our results call for closer coordination between home health and medical providers in the clinical management of HF patients immediately after hospital discharge.

No abstract

Objective. To estimate the impact of the Balanced Budget Act of 1997 (BBA), which changed the way Medicare reimbursed for home health services, on a range of home health utilization measures, and to examine whether particular subgroups of beneficiaries were differentially impacted in the post-BBA period. Data Sources. Secondary data from the Centers for Medicare and Medicaid Services (CMS) Standard Analytic Files for the 1 percent sample of Medicare beneficiaries for fiscal years 1997 and 1999, linked with information from CMS eligibility, provider, and cost report files as well as the Area Resources File. Study Design. Logistic regression was used to estimate the effects of being in the post-BBA period on the incidence of home health service use and ordinary least squares (OLS) regression was used to estimate the effects of being in the post-BBA period on the amount and type of use by home health service users. Interaction terms were included for all the independent variables to assess whether the effect was disproportionate among particular beneficiary subgroups. Principal Findings. Results show a 22 percent decrease in the percentage using home health services post-BBA and a 39 percent decrease in the number of visits per user. Stronger reductions, though not very large, were found in the incidence of use for beneficiaries aged 85 and older, those in states with high historical Medicare home health use, and those with Medicaid buy-in. More intensive reductions in the number of services were found for those aged 85 and older, in high historical Medicare use states, nonwhites, females, those using for-profit agencies, and those treated for certain diagnoses. Less intensive reductions were associated with hospital-based agencies.Conclusions. This research demonstrates that public program expenditures can be sharply curtailed with financial incentives. As reimbursement shifts to a prospective payment system legislated by the BBA, utilization should be closely monitored, especially for vulnerable subgroups.

Since its passage in 1965, medicare has provided financial support for much of the acute medical care provided to the nation's aged and disabled. Over the years since the program was enacted, however, the cost of these services has increased dramatically, raising concerns about how to make the system more efficient. At first, payments to providers were based on the actual costs of delivering the care. In the early 1980s, Medicare moved its largest providers, acute care hospitals, to per‐case payments based on the medical diagnoses for which the care was being provided (called DRGs, or diagnosis‐related groups). This change gave hospitals an incentive to keep their treatment costs for each patient as small as possible. Inherent in such a system, however, are incentives to underserve beneficiaries by moving them out of care too quickly. In 1997, the Balanced Budget Act (BBA) further reformed Medicare payments by extending per‐case payment methodologies to all types of postacute care.

The Balanced Budget Act of 1997 mandated a major overhaul in Medicare payment for home health care with an interim payment system (IPS) preceding a prospective payment system (PPS). This study extends an earlier analysis of the impact of the IPS to determine whether home health use and spendingtrends changed after the introduction of the PPS. The rapid decline in the incidence of use and visits per user under the IPS slowed in its final year and then picked up again in the first year of the PPS. In addition, average payment per visit increased sharply under the PPS. Little is known about the impact of continued large reductions in home health services since 1999.