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Article Excerpt
Between 1986 and 1996, there was dramatic growth in Medicare home health (HH) utilization, increasing from $2.6 billion per year (3 percent of Medicare Part A expenditures) to $17.5 billion per year (13 percent of Part A expenditures). This resulted from growth in both the annual number of beneficiaries served (increasing from 1.6 to 3.6 million) and the average number of annual visits per beneficiary (increasing from 23 to 79 visits per beneficiary) (105th Congress United States of America 1998).
At the same time it was noted that there was significant regional variation in utilization of HH services (Kenney and Dubay 1992; Welch, Wennberg, and Welch 1996; McCall et al. 2001). Welch, Wennberg, and Welch (1996) reported greater variation in utilization of HH services than either skilled nursing days, hospital days, physician services, or hospital admissions, leading the authors to conclude that there was no "national consensus on whether and, if so, how often to use HH care."
The significant regional variation raised concern within Congress and at the Office of Inspector General (OIG) that much of this regional variation could be attributable to either inefficient or fraudulent practices. Beginning July 1995, the OIG working with other agencies initiated Operation Restore Trust, a five-state (California, Florida, Illinois, New York, and Texas) audit that documented examples of fraud and abuse (Health Care Financing Administration 1995). The program was expanded nationwide in 1997.
In addition to these regulatory efforts, Congress passed the Balanced Budget Act of 1997, and the Centers for Medicare and Medicaid Services (CMS) implemented the HH Interim Payment System (IPS) on October 1, 1997 (with refinements starting October 1, 1998), and the HH Prospective Payment System (PPS) on October 1, 2000 (105th Congress United States of America 1997).
The IPS reduced the aggregate per-visit limit on payments from 112 percent of national mean historical costs to 105 percent of the national median costs. As per-visit limits do little to control the growth in number of visits per beneficiary, per-beneficiary limits were also implemented.
These per-beneficiary limits were partly designed to also reduce regional variation (105th Congress United States of America 1998). This was accomplished by blending agencies' historical mean per-beneficiary cost with standardized regional per-beneficiary costs, thereby driving limits toward regional means. (See Table S1 in the appendix for details.) These policies were phased-in based on each agency's fiscal year end. Under the PPS, implemented on October 1, 2000, HH care was organized into 60-day episodes of care for HH resource groups (HHRGs) (Health Care Financing Administration 2000).
The Congressional Medicare Payment Advisory Commission (MED PAC) and several independent groups have described reductions in HH care after implementation of the IPS and PPS policies (MEDPAC 1999; McCall et al. 2001, 2003a, 2003b; Komisar 2002; Schwartz et al. 2002; Liu, Long, and Dowling 2003; Murkofsky et al. 2003; Murtaugh et al. 2003; Spector, Cohen, and Pesis-Katz 2004).
In our prior analyses focusing on postacute care HH patients, we reported the reduction in HH utilization for patients undergoing major orthopedic surgery (FitzGerald et al. 2006). We expand upon these prior analyses to examine how these changes in reimbursement policy affected regional variation over time, as well as how the reimbursement changes affected the mix of skilled HH services delivered.
METHODS
Patient Selection
As described in more detail in our prior studies (FitzGerald et al. 2007), we opted to select a 100 percent national sample for two well-defined cohorts that are commonly associated with postacute care. This permitted sufficient power to conduct month-to-month analyses across the various Balanced Budget Act policy periods between 1996 and 2001 so that policy implementation dates could be better correlated with temporal changes in utilization.
We selected patients undergoing elective joint replacement surgery (JR) as a group that ought to be sensitive to policy changes given the high degree of clinical discretion about the venue of postacute care. We also selected patients undergoing surgical repair of hip fracture (FX) as they undergo similar procedures yet are a more vulnerable group of patients. Before implementation of the IPS, 61 percent of JR and 43 percent of FX patients received HH care during the 120-day postoperative period (FitzGerald et al. 2006).
Patients undergoing JR surgery were identified by diagnosis-related groups (DRGs) codes 209 and 471. Verification of surgery and inclusion in the study sample was confirmed by ICD-9 procedure codes 81.51-81.55. Patients undergoing joint replacement for clearly nonelective reasons were excluded from this sample (e.g., infection or major trauma, 12 percent of all JR patients). Sensitivity analyses conducted using the full JR sample did not meaningfully change findings and therefore only results for the clinically defined elective JR sample are presented.
Patients undergoing surgical repair of hip fracture were identified with an ICD-9 diagnosis of 820.xx in any 1 of the 10 diagnostic code positions. Surgical repair of hip fracture was confirmed with the hip replacement codes 81.51-81.53 or pinning codes 79.35, 79.15, or 78.55. Patients treated non-surgically for hip fracture were excluded.
Descriptors of the patient population are described in the appendix in Table S3.
Data Source. Medicare claims were obtained for all acute care hospital admissions, related skilled nursing facility (SNF), rehabilitation hospital (RH), and HH bills for patients undergoing either joint replacement surgery or surgical repair of hip fracture between January 1, 1996, and December 31, 2001. Acute care hospital, RH, and SNF claims were abstracted from the Medicare Provider Analysis and Review (MEDPAR). HH claims were abstracted from the HH Standard Analytic File.
Dependent Variables
Probability of HH Utilization. Admission to HH care was identified to begin within 7 days of discharge from either the acute care hospital or one of the contiguous postacute care institutions (SNF or RH). Patients meeting the above criteria were defined as receiving HH care. Trends...
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