Merritt Personal Lines Manual: Medicare Home Health Care
Today, the original Medicare population experiences about 2,600 annual inpatient days per 1,000 covered beneficiaries. Some Medicare HMOs have successfully reduced this to less than 1,000 annual inpatient days per 1,000 covered enrollees. The industry average is about 1,400 annual inpatient days per 1,000 - nearly 50 percent below original Medicare.
To the casual observer, lower managed care use rates imply denial of care. Actually, by substituting an array of outpatient and home health care services for more costly (and dangerous) inpatient care, Medicare managed care plans can improve quality of care.
Medicare spending for home health care has risen dramatically during the 1990s. By 1996, this benefit consumed 9.3 percent of Medicare expenditures, up from 2.5 percent in 1989. These changes have not only resulted in higher costs but also a shift from an acute-care, short-term benefit to a chronic-care, longer-term benefit with related changes in patient mix, treatment patterns and claims issues.
The growth in spending was due primarily to an increase in users and in visits per user, rather than rising payments per visit. In 1989, 50 Medicare beneficiaries per 1,000 enrollees received home health care. The average user in that year received 27 visits. By 1996, 99 beneficiaries per 1,000 used home health care and received an average of 76 visits. The payment per visit went from $54 to $62 over this period. Changes in Medicare eligibility and coverage rules played an important role in the increased use of this benefit.
Not surprisingly, this growth in use was accompanied by a rapid rise in the number of home health agencies. The increased use of home health care has not been matched by a commensurate rise in spending for claims review and program monitoring. As a result, some of the visits provided and people served may not meet Medicare's coverage criteria.
To qualify for Medicare home health care, a beneficiary must be confined to his or her residence (that is, "homebound"); require intermittent skilled nursing, physical therapy or speech therapy; be under the care of a physician; and have the services furnished under a plan of care prescribed and periodically reviewed by a physician. If these conditions are met, Medicare will pay for part-time or intermittent skilled nursing; physical, occupational and speech therapy; medical social service; and home health aide visits. Beneficiaries do not pay any coinsurance or deductibles for these services.
