Medicare beneficiaries with renal failure, pulmonary disease, and multiple sclerosis have experienced higher rates of hospital readmission and more visits to emergency departments when receiving home health care since the implementation of the home health prospective payment system (PPS), according to an OIG report. Although there has been little overall change in hospital readmission rates and emergency department visits following home health PPS implementation, findings of higher hospital readmission rates and more frequent emergency visits among certain beneficiaries have led the OIG to state that continued monitoring of home health care quality would be prudent.

Quality of care concerns.

The PPS for Medicare home health care services was implemented in 2000 in response to rapid growth in home health spending under the previous cost-based system. Because the PPS directs that home health agencies receive a unit of payment for a 60-day episode of care, some feared the PPS would decrease the quality of patient care by creating a financial incentive to limit patient visits. For this reason, CMS, the Government Accountability Office, and the Medicare Payment Advisory Commission stressed the need to monitor outcomes of care. After implementation of the PPS, the OIG analyzed claim data to detect increases in rates of hospital readmission and emergency department visits, which are indications of poor quality of care.

Investigation results.

As a result of its investigation, the OIG found that the overall hospital readmission rate for home health beneficiaries discharged from hospitals remained at 47 percent and the overall rate of emergency department visits for home health beneficiaries discharged from hospitals increased only slightly, from 29 to 30 percent. However, the investigation showed up to a 5 percent increase in readmission rates for beneficiaries with certain diagnoses, including renal failure, multiple sclerosis and pulmonary disease. Rates of emergency department visits for these beneficiaries also showed up to a 4 percent increase. Although results show that the PPS has not led to increased overall use of hospital and emergency department services, higher levels of use among certain groups of beneficiaries creates a need for continued monitoring. In written comments, CMS agreed with the OIG findings and noted plans to use the investigation results to assist in monitoring the performance of home health care.

Source: OIG Report OEI-01-04-00160, Jan. 24, 2006