Medicare Home Health:

Effect on Spending of Limiting Payment for Non-Patient-Care Costs

HEHS-00-19R: Published: Oct 19, 1999. Publicly Released: Oct 19, 1999.

Additional Materials:


William J. Scanlon
(202) 512-7114


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO modelled the impact of constraining, through various limits, home health agency (HHA) costs that are not directly related to patient care, focusing on the: (1) variation in total and non-patient-care costs across agencies; and (2) effect on Medicare payments if constraints were imposed on payments for non-patient-care costs.

GAO noted that: (1) per-visit costs varied widely both by visit type and across free-standing agencies; (2) home health aide visits were the least expensive, and medical social service visits were the most expensive; (3) across agencies, costs per visit for the most expensive agencies were 4 to 10 times those of the least expensive agencies, depending on the type of visit; (4) non-patient-care costs constituted a substantial portion of the cost for each home health visit, averaging around 44 percent for each visit type; (5) moreover, the portion of visit costs that were not directly related to patient care was higher for more expensive visits; (6) in addition, for the sample of free-standing HHAs GAO analyzed, Medicare payments would have been approximately 4 to 13 percent less if payments for non-patient-care costs had been held to various limits based on the cost experience of a subset of HHAs; (7) for example, if Medicare payments for non-patient-care costs had been limited to the median costs of free-standing HHAs (the 50th percentile), total payments would have been reduced by 3.9 percent; (8) if payments for non-patient-care costs had been limited to the cost level of the least expensive 20 percent of HHAs (20th percentile), total spending would have been 12.6 percent lower; (9) the per-visit cost limits already indirectly constrain Medicare payments for non-patient care costs, although not as much as a limit applied directly to non-patient-care costs would; and (10) it is not known how the savings estimates would have differed if all HHAs, including the generally higher-cost hospital-based ones, had been included in the analysis.

Jan 21, 2021

Jan 14, 2021

Jan 4, 2021

Dec 22, 2020

Dec 16, 2020

Dec 14, 2020

Dec 10, 2020

Looking for more? Browse all our products here