1. Access to Medicare Home Health Care: How Has It Changed Following PPS? Christopher M. Murtaugh Timothy R. Peng Center for Home Care Policy & Research Visiting Nurse Service of New York Nelda McCall Laguna Research Associates Ann Meadow Centers for Medicare and Medicaid Services Stanley Moore Independent Contractor Funded by the Robert Wood Johnson Foundations Changes in Health Care Financing and Organization (HCFO) Initiative

2. Background Two major payment system changes mandated by Congress in BBA of 1997 Interim Payment System (IPS) phased in during FY 1998 Prospective Payment System (PPS) implemented 10/1/00 (beginning of FY 2001)

3. Use of Medicare Home Health Services Fiscal Years 1997-2002

5. Research Objective and Hypotheses To examine changes in who receives home health care Specific hypotheses concern use by beneficiaries: With medical conditions affecting the HHRG With medical conditions that industry experts identified as costly relative to payment Likely to have on-going chronic care needs

6. Methods Pre-post quasi-experimental design Data are from CMS administrative and claims files Universe is Medicare Part A fee-for-service beneficiaries in 50 states and DC Logistic regression model estimated with robust SEs Regression-adjusted rates of use in 2001 and 2002 compared to 2000

7. HHRG Diagnosis Results: Percent Change Following PPS Implementation AllDiabetesOrthoWoundsNeuro Alzheimers/ Dementia 010201020102010201020102 0

8. Other Selected Results: Percent Change Following PPS Implementation All Beneficiaries Mid-Range Historical HH Use High Historical HH Use 010201020102 0

9. Alternative Explanations of Diagnosis Results Diagnosis findings surprising Post-PPS increase in HHRG-sensitive home health diagnoses Agreement among industry experts on costly patients (e.g., those with HF, HBP) Possible explanations Limitations of diagnosis measures Agency need to maintain referral patterns Change in agency coding procedures

10. Policy Implications Decline in incidence of home health use post-PPS Unanticipated Greatest reduction in states with high historical use Impact on use of other services and beneficiary health status unknown Change in types of beneficiaries receiving home health care Little evidence of major change Access for diabetics should be monitored Payment system can be modified to address access problems