Medicare Home Health:

Differences in Service Use by HMO and Fee-for-Service Providers

HEHS-98-8: Published: Oct 21, 1997. Publicly Released: Nov 20, 1997.

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William J. Scanlon
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GAO provided information on home health services provided by Medicare health maintenance organizations (HMO), focusing on: (1) how Medicare HMOs provide and manage home health services, as compared to fee-for-service providers; and (2) what is known about the appropriateness of home health services provided to HMO enrollees, especially to vulnerable populations.

GAO noted that: (1) since the late 1980s, when the Congress and the courts liberalized Medicare coverage of home health services, the contrasting financial incentives of HMO and fee-for-service providers have led to some divergence in the use of these services; (2) fee-for-service providers generally have responded to the increased latitude in the home health benefit by providing more patients with more services for longer periods, in some cases providing excessive services; (3) in contrast, home health agencies and HMOs tend to emphasize shorter-term recuperation and rehabilitation goals--much as fee-for-service provider did prior to the changes in coverage guidelines; (4) differences between HMO and fee-for-service providers are most apparent in the use of home health aides; (5) in the fee-for-service program, the use of home health aides to provide long-term care for patients with chronic conditions is growing, whereas the six HMOs GAO visited report that they do not provide aide services on a long-term basis; (6) typically, Medicare HMOs manage home health care much more actively than the fee-for-service program; (7) in contrast, the fee-for-service program has less effective controls for preventing unnecessary and noncovered services; (8) home health utilization differs between HMO and fee-for-service patients; (9) the greater emphasis on short-term goals and the more active management of care by HMOs likely contribute to shorter episodes of care and the use of fewer home health visits, especially by home health aides; (10) in addition, data from one managed care market suggest utilization differences are more pronounced for longer-term home health patients; (11) given the approach to home health care by some Medicare HMOs, including a greater focus on post-acute needs, Medicare beneficiaries with long-term care needs and chronic illnesses enrolled in HMOs may not receive the same services as they would in fee-for-service Medicare; (12) although there are these differences in utilization, the Health Care Financing Administration (HCFA) does not have the information it needs to evaluate the home health care patients receive in either the HMO or fee-for-service program; (13) HCFA does not review home health care during monitoring visits to HMOs; and (14) HCFA plans to collect some outcomes information, but it will not be available for some time.

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