CMS Data Show State Disparities in Cost of Home Health Care Services

The average cost to deliver home health services to Medicare beneficiaries varies by several hundred dollars from state to state, according to CMS data released Friday, Modern Healthcare reports.

Home Health Payment Formula

Medicare's home health reimbursement formula is based on services provided in units of 60-day episodes. If a patient is provided with four or fewer home health visits in the 60-day period, providers receive a low-utilization payment adjustment based on a preset per-visit amount. If a patient is provided with at least five home health visits during the 60-day period, the care he or she receives is tracked through a home health resource group based on:

• The number of visits the patient is provided;
• The patient's functionality; and
• The type of care the patient receives.

In addition, home health agencies can receive outlier payments for patients who are visited at least five times within the 60-day period. Up to 10% of a facility's reimbursements can come from outlier payments.

According to a Medicare Payment Advisory Commission report, about 3.4 million Medicare beneficiaries received home health care in 2012.

Data Reveal Disparity

CMS' latest data detail the amounts home health agencies received in federal payments for patient care in 2013. The data are based on more than six million claims, representing $18.1 billion in federal payments made to roughly 11,000 home health agencies that year.

According to Modern Healthcare, the data show that:

• Certain bundled home care services cost the government considerably more than types of care; and
• The average cost of home care delivery varies by several hundred dollars from state to state.

For example, the data show an especially high level of outlier claims in states, such as:

• Florida;
• New York; and
• Utah.

Meanwhile, 2,030 providers received high outlier payments. States with the highest numbers of such providers include:

• Florida, with 590;
• Texas, with 521; and
• California, with 379.

According to Modern Healthcare, factors that could cause some providers and states to receive more outlier payments than others include:

• Abuse of the system;
• Certain regions having a higher rate of patients with chronic conditions; and
• Patients not understanding their benefits.

Comments

William Dombi, vice president for law at the National Association for Home Care and Hospice, said the data allow policymakers and the industry to have a more focused understanding of how use of home health services varies throughout the country. He noted, "You can compare by types of episodes and identify anomalies that might indicate whether there is widespread abuse or widespread underutilization."

Molly Smith, vice president of policy and innovation for the Visiting Nurse Associations of America, said her group is "looking" at the data "in more detail to ensure that variations due to underlying factors outside of a provider's control are understood and accounted for then the data is used -- either by patients, referring providers or payers." She noted, "[A]ll data must be evaluated in context" (Rice, Modern Healthcare, 12/21).