Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
Adequacy of Home Health Services: 
Hospital Re-Admissions 
and Emergency Room Visits 
JUNE GIBBS BROWN 
Inspector General 
SEPTEMBER 2000 
OEI-02-99-00531  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 
protect the integrity of the Department of Health and Human Services programs as well as the 
health and welfare of beneficiaries served by them.  This statutory mission is carried out through a 
nationwide program of audits, investigations, inspections, sanctions, and fraud alerts.  The 
Inspector General informs the Secretary of program and management problems and recommends 
legislative, regulatory, and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General.  It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public.  The 
inspection reports provide findings and recommendations on the efficiency, vulnerability, and 
effectiveness of departmental programs. 
OEI's New York regional office prepared this report under the direction of John I. Molnar, 
Regional Inspector General, and Renee C. Dunn, Deputy Regional Inspector General.  Principal 
OEI staff included: 
REGION  HEADQUARTERS 
Ellen Vinkey, Project Leader  Brian Ritchie, Director, Technical Support Staff 
Judy Lin  Tricia Davis, Program Specialist 
Barbara Tedesco,  Mathematical Statistician 
To obtain copies of this report, please call the New York Regional Office at 212 264-2000. 
Reports are also available on the World Wide Web at our home page address: 
http://www.hhs.gov/oig/oei  E X E C U T I V E  S U M M A R Y  
PURPOSE 
To determine if hospital re-admission and emergency room visit rates for Medicare 
patients discharged from the hospital to home health care have increased since the 
implementation of the home health interim payment system. 
BACKGROUND 
The Health Care Financing Administration has asked the Office of Inspector General to 
assess whether hospital re-admission rates and emergency room visits for Medicare home 
health patients have increased since the implementation of the interim payment system. 
The Health Care Financing Administration made this request in response to a recent Office 
of Inspector General study entitled Medicare Beneficiary Access to Home Health 
Agencies (OEI-02-99-00530).  In that study, most hospital discharge planners reported 
that they were generally able to place Medicare beneficiaries with home health agencies; 
however, some discharge planners volunteered their concern that some of their patients 
may not be getting the care they need once they are placed.  Two of the changes that 
hospital discharge planners cite as indications that patients may not be getting the home 
health care they need are higher hospital re-admission rates and increasing use of hospital 
emergency rooms.  This inspection follows up on those concerns.  It is part of a series of 
inspections that the Office of Inspector General has conducted on home health care. 
For this study, we analyze Health Care Financing Administration claims data for all 
Medicare beneficiaries discharged from a hospital to home health care in early 1997 and 
for an analogous period in 1999. 
FINDINGS 
Hospital Re-Admissions and Emergency Room Visits for Home Health Patients 
Have Decreased 
Comparing the first 2 months of 1997 and 1999, we found that the percentage of 
Medicare patients who were re-admitted to the hospital or visited an emergency room has 
not increased since the implementation of the interim payment system. 
Hospital Re-admission and Emergency Room Visit Rates 
For Home Health Patients 
Before and After Interim Payment System 
1997  1999 
Hospital Re-admission Rate  41.2%  37.8% 
Emergency Room Visit Rate  21.9%  19.0% 
Source: National Claims History File 
i 
Hospital Re-admissions and ER Visits  OEI-02-99-00531 In fact, the percentage has decreased.  We looked for other changes for this population. 
We found that the average length of home health episodes for Medicare patients 
discharged to home health care has decreased by 41 percent since the implementation of 
the interim payment system.  We also found that the number of Medicare patients 
discharged to home health care declined by 23 percent.  However, many other 
characteristics of this population have not changed.  We found home health patients do 
not differ pre- and post- interim payment system in terms of age, sex, race, and hospital 
length of stay. 
We also compared these patients to the general Medicare population.  We found that re-
admission rate changes pre- and post- interim payment system for home health patients are 
consistent with those for the general population. 
Re-Admission Rates Do Not Vary By Diagnoses 
The re-admission rates for both high volume and frequently re-admitted diagnoses have 
not increased since the implementation of the interim payment system.  The re-admission 
ranking for the five most common diagnoses associated with patients who get re-admitted 
to the hospital has remained relatively constant pre- and post- interim payment system. 
Not surprisingly, in both 1997 and 1999, these high volume re-admission diagnoses are 
very similar to those of patients most likely to get home health care upon discharge from 
the hospital.  They include heart failure, stroke, and pneumonia.  Patients with cancer-
related diagnoses are the most likely to be re-admitted to the hospital both pre- and post-
interim payment system.  We also compared hospital re-admission rates for patients in 
diagnoses that a number of recent studies identified as patient types which may be at-risk 
of receiving inadequate care.  We found no significant increases in the percentage of 
patients re-admitted in at-risk diagnoses. 
Emergency Room Visit Rates Do Not Vary By Diagnoses 
For the majority of  high volume and frequent emergency room visit diagnoses, the 
emergency room visit rates have not increased since the implementation of the interim 
payment system.  The ranking for the five most common diagnoses associated with 
patients who visit the emergency room has remained relatively constant pre- and post-
interim payment system.  Home health patients most likely to visit the emergency room 
covered a broader range of diagnoses than those likely to be re-admitted to the hospital. 
However, patients with respiratory illnesses and those with kidney and urinary tract 
diagnoses show up at the top of this list in both 1997 and 1999.  We also found no 
significant increase in the rate at which patients in at-risk diagnoses visited the emergency 
room pre- and post- interim payment system.  Seven of the eight at-risk diagnoses we 
looked at show no increase in emergency room visits rates between 1997 and 1999. 
ii 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  Agency Comments 
The Health Care Financing Administration provided comments on this and two related 
draft reports.  They note that our finding that re-admissions and ER visits have declined is 
an indicator of stability in home care under the interim payment system.  They also note 
that on October 1, 2000, the new prospective payment system for home health care will 
go into effect.  They, like we, will monitor care under the new system. The Health Care 
Financing Administrations comments are in Appendix B. 
iii 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  T A B L E   O F   C O N T E N T S  
PAGE

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  i

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

FINDINGS

Decrease In Re-Admissions and Emergency Room Visits . . . . . . . . . . . . . . . . . . . . . . . . 7

Re-Admission Rates Do Not Vary By Diagnoses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Emergency Room Visits Do Not Vary By Diagnoses . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Rates Consistent With General Population  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

AGENCY COMMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

APPENDICES 
A: Selected List Of Recent OIG Home Health Inspections . . . . . . . . . . . . . . . . . . . . . . . .  16

B: HCFA Comments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

1 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  I N T R O D U C T I O N  
PURPOSE 
To determine if hospital re-admission and emergency room visit rates for Medicare 
patients discharged from the hospital to home health care have increased since the 
implementation of the home health interim payment system (IPS). 
BACKGROUND 
The Health Care Financing Administration (HCFA) has asked the Office of Inspector 
General (OIG) to assess whether hospital re-admission rates and emergency room visits 
for Medicare home health patients have increased since the implementation of the interim 
payment system (IPS).  The HCFA made this request in response to a recent OIG study 
entitled Medicare Beneficiary Access to Home Health Agencies (OEI-02-99-00530). 
In that study, most hospital discharge planners reported that they were generally able to 
place Medicare beneficiaries with home health agencies; however, some discharge 
planners volunteered their concern that some of their patients may not be getting the care 
they need once they are placed.  Two of the changes that hospital discharge planners cite 
as indications that patients may not be getting the home health care they need are higher 
hospital re-admission rates and increasing use of hospital emergency rooms.  This 
inspection follows up on those concerns.  It is part of a series of inspections that the OIG 
has conducted about home health care.  (See Appendix A.) 
Medicare Home Health Care 
Home health care services consist of skilled nursing, therapy (physical, occupational, and 
speech) and certain related services, including aide services, all furnished in a patients 
home.  Services are typically provided by registered nurses, therapists, social workers, or 
home health aides employed by or under contract with a home health agency (HHA). 
These agencies can be free-standing or provider-based and classified as not-for-profit, 
proprietary, or governmental. 
Medicare will pay for home health care only if it is reasonable and necessary for the 
treatment of the patients illness or injury.  In order for a beneficiary to qualify for 
Medicare coverage of home health services, he/she must be confined to home, require at 
least one skilled service, and be under the care of a physician who has established a plan of 
care.  Skilled services are defined as intermittent skilled nursing services, physical therapy, 
speech therapy, and a continued need for occupational therapy. 
During much of the 1990s, Medicare spending for home health services increased 
2 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  substantially.  From 1990 to 1997, expenditures rose from $3.7 billion to $17.8 billion. 
This resulted from both an increase in the number of beneficiaries who received home 
health services and an increase in the number of visits they received.  In 1999, Medicare 
spending for home health services was about $9.5 billion. 
Beginning in 1995, several initiatives were implemented to address concerns about fraud 
and abuse, and to control the costs of Medicare home health.  These included the creation 
of an anti-fraud campaign entitled Operation Restore Trust, changes to Medicare 
participation rules designed to screen out problem providers, and, most recently, payment 
limits created by the Balanced Budget Act of 1997. 
The Balanced Budget Act of 1997 
The Balanced Budget Act of 1997 changes the way Medicare pays for home health care. 
The law requires a payment change from a cost-based method to a prospective payment 
system (PPS) of fixed, predetermined rates for home health services.  The HCFA has 
proposed a national 60-day episode payment which will be case-mix adjusted based on the 
patients medical assessment and the projected number of therapy hours needed in the 60-
day episode. 
Until this PPS is developed, however, home health agencies are reimbursed under an 
interim payment system which imposes payment limits on their services.  The IPS was 
implemented on October 1, 1997 and will continue to be in place until PPS begins on 
October 1, 2000.  The IPS is intended to control the aggregate costs of services provided 
to beneficiaries.  In addition to reducing the per-visit limit, it subjects Medicare HHAs to a 
new payment limit that is based on an aggregate per-beneficiary amount; this cap is 
applied to an agencys total Medicare payments and does not limit payments for specific 
beneficiaries.  The Omnibus Consolidated and Emergency Supplemental Appropriations 
Act of 1999 moderated the restrictiveness of IPS.  This legislation made several changes 
to the payment limits, including increasing the per-visit limits for all agencies and 
increasing the aggregate beneficiary limit for certain agencies.  In that same year, Congress 
enacted the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, 
which delayed a 15 percent payment reduction to be imposed with the implementation of 
PPS and increased payments under IPS to certain agencies. 
Under IPS, agencies can use several methods to keep costs below their payment limits, 
including balancing their mix of low and high cost patients, reducing their costs overall, 
and increasing their proportion of low-cost patients. 
As part of the conditions of participation, home health agencies must use a new home 
health agency data collection system called the Outcome and Assessment Information Set 
(OASIS).  All HHAs have been required to collect OASIS data on all patients receiving 
skilled care, regardless of payment source, since July 1999.  The OASIS data elements 
focus primarily on the patients medical status and include socio-demographic, 
environmental, support systems, health status, and functional status information on each 
patient.  Information on hospital re-admissions and emergency room visits is also 
3 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  captured.  The OASIS can be used by home health agencies to determine patients 
treatment needs, develop the plan of care, and monitor quality of care. 
Related Studies 
As a follow-up to our recent OIG inspection, Medicare Beneficiary Access to Home 
Health Agencies, we contacted a number of the discharge planners who had expressed 
concerns about the adequacy of home health services.  We asked them to elaborate on 
their concerns regarding hospital re-admissions and emergency room visits.  Most of the 
discharge planners we spoke to indicated that between 5 and 35 percent of their Medicare 
patients are not getting the amount of home care they need or the duration of services 
needed.  A few discharge planners indicated that they were particularly concerned about 
diabetic patients and those who had suffered a stroke.  These discharge planners told us 
that when they see HHA patients re-admitted to the hospital it is usually during their home 
health services or within one month of their discharge from the HHA. 
In addition to our recent inspection report,  Medicare Beneficiary Access to Home 
Health Agencies, several other studies have been released recently that discuss adequacy 
and access to home health care.  A General Accounting Office report found that overall 
beneficiary access has not been affected by recent agency closures but did suggest that, as 
agencies change their operations in response to IPS, beneficiaries whose treatment costs 
are higher than average may have increasing difficulty obtaining home health care. 
Also, the Medicare Payment Advisory Commission (MedPAC) reported the following: a 
decline in the number of home health agencies; concerns about impaired access; and, 
abrupt home health discharges for patients with expensive care needs.  MedPAC notes, 
however, that IPS is only one factor of many that may be affecting access to care. 
A George Washington University study reported that agencies are altering admissions 
standards, reducing clinical and administrative staff, and chronically ill patients are 
experiencing greater fragmentation and disruption of care.  Over 40 percent of discharge 
planners surveyed reported an increase in hospital readmission rates for Medicare patients 
within 30 days of discharge to an HHA.  They attributed this trend to insufficient 
intensity or duration of home health care services either resulting from direct efforts by 
home health agencies to control individual patient costs or the indirect results of general 
staffing cuts to reduce costs. 
A study by the Institute for Health Care Research and Policy at Georgetown University 
found that similar patients with greater use of home care services are more likely to 
experience health improvements than those with low home care utilization. 
Finally, HCFA has completed two PPS demonstration projects.  The latest, which looks at 
per-episode payments, found no evidence that quality of care, as measured by patient 
outcomes, had been adversely affected by the per-episode PPS demonstration.  It also 
found that the per-episode PPS demonstration substantially reduced the number of home 
visits without increasing the use of other Medicare services.  Based on an analysis of 
4 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  claims data, HCFA found lower usage of emergency rooms by per-episode PPS patients 
and no significant differences in institutional admissions for a diagnosis related to the 
home health diagnosis. The report therefore concluded that a per-episode based home 
health prospective payment system could reduce Medicare costs without harming quality 
of care. 
METHODOLOGY 
Using HCFAs National Claims History data, we identified all Medicare beneficiaries who: 
1) were discharged to home health care from a hospital between January 1, 1997, and 
February 28, 1997; and, 2) had a home health episode that started within 30 days of their 
hospital discharge.  We also identified patients who met this criteria for an analogous 
period in 1999, allowing us to evaluate two comparable time periods pre- and post-IPS. 
For both years, we summarized beneficiary claims data from the National Claims History 
file to establish home health service begin and end dates for each beneficiary.  When a gap 
of greater than 30 days existed between a home health claim service thru date and the 
begin date on the following claim for a given beneficiary, we considered this to be the 
end of the beneficiarys home health episode. 
Hospital Re-admit And Emergency Room Analysis 
For beneficiaries in each of these two groups we analyzed beneficiary claims history data 
for the period that they received home health care, as well as the 30 days following their 
HHA discharge.  For beneficiaries whose home health episode continued beyond August 
31st, we analyzed claim history data through August 31st1.  In cases where a beneficiary 
had multiple hospital discharges, re-admissions or emergency room visits, during our 
sampling time frame, only the first hospital discharge and post-hospital event were 
included in our analysis.  We compared hospital re-admission and emergency room visit 
rates pre- and post-IPS.  In this comparison, we calculated the overall re-admission and 
emergency visit rates for sample Medicare beneficiaries and looked for any differences.  In 
addition, we calculated these rates for a number of sub-groups including, for example, 
different patient diagnosis and beneficiaries by State. 
Patient Profile Analysis 
In order to gain a better understanding of any pre- and post-IPS rate differences, we 
looked at a number of different variables to develop a profile of the two groups.  For 
example, we looked at whether the pre- and post-IPS groups differed significantly in terms 
of their diagnoses or hospital length of stay prior to their discharge.  Using information 
from HCFAs Enrollment database, we also compared beneficiary variables 
1 In 1997 17% of beneficiaries in our sample had home health episodes that continued past our Aug. 31st 
cut off. In 1999 6% had home health episodes that continued past Aug. 31 st. 
5 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  including the following: age; race; sex; and, State of residence. 
HHA Beneficiary And General Medicare Population Rate Analysis 
We also compared HHA patient pre- and post-IPS re-admission and emergency visit rates 
to those associated with the general population of Medicare beneficiaries discharged from 
the hospital during the same time frame.  For this comparison, we tracked the general 
population beneficiaries, as well as the HHA beneficiaries for 60 days after their hospital 
discharge. 
Limitations 
A limitation to our methodology is that our analysis reports only on changes in hospital re-
admission and emergency room visit rates.  This inspection is not intended to attribute any 
change to a particular factor, since many reasons, including IPS, may contribute to 
changes in readmission and emergency room visit rates.  In addition, we do not make pre-
and post- IPS comparisons by geographical region or by urban/ rural designation. 
Therefore, our analysis does not address the possibility of increased re-admission or 
emergency room visit rates within smaller geographical areas or in primarily urban or rural 
areas. 
This inspection was conducted in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and Efficiency. 
6 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  F I N D I N G S  
Hospital re-admissions and emergency room visits for home 
health patients have decreased 
Despite significantly shorter home health episodes2, the percentage of  Medicare patients 
who are re-admitted to the hospital or visit the emergency room has not increased since 
the implementation of the interim payment system (IPS).  In fact, the percentage has 
decreased.  Forty-one percent of all Medicare patients who were discharged from the 
hospital to home health in January and February 1997 (pre-IPS) were re-admitted to the 
hospital within 30 days of the end of their home health services.  The re-admission rate for 
those discharged during an analogous period in 1999 (post-IPS) was 38 percent. 
Emergency room visit rates did not increase between 1997 and 1999 either.  In 1997, 22 
percent of patients discharged from the hospital to home health had emergency room 
visits.  In 1999, 19 percent had emergency room visits.  (See Table 1 below.) 
Our analysis of these data was prompted by concerns expressed on the part of some 
hospital discharge planners that shorter home health episodes are resulting in increased re-
admissions and emergency room visits, usually within one month of the end of patients 
home health care.  As indicated above, although we follow patients for the length of their 
home health episode plus 30 days3, we do not find evidence to support this theory.  An 
analysis by State shows that hospital re-admission rates for home health patients did not 
increase in any State between 1997 and 1999.  Finally, we found virtually no increase in 
any State in the rate at which home health patients visited emergency rooms pre- and post-
IPS. 
Table 1

Hospital Re-admission and Emergency Room Visit Rates

For Home Health Patients

Difference 
1997  1999  1997-1999

Hospital Re-admission Rate  41.2%  37.8%  -3.4 
Emergency Room Visit Rate  21.9%  19.0%  -2.9 
Source: National Claims History File 
2  A home health episode is the length of time a patient receives home care. 
3  We analyzed beneficiary claims history data for the period that beneficiaries received home health care, 
as well as the 30 days following their HHA discharge. For beneficiaries whose home health episode 
continued beyond August 31 st,  we analyzed claim history data through August 31 st. 
7 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  We also calculated re-admission and emergency room visit rates for the first 60 days of 
patients home health episodes.  We did this in order to control for the difference in length 
of home health episodes pre- and post-IPS.  As would be expected, the re-admission and 
emergency room visit rates for this shorter time frame are lower, however, the data still do 
not show an increase in either of these rates.  In both 1997 and 1999, 30 percent of home 
health patients were re-admitted to the hospital within the first 60 days of their home 
health services.  In 1997, 13 percent of home health patients had emergency room visits 
within the first 60 days of their home health services.  In 1999, 14 percent visited the 
emergency room within 60 days. 
Home health lengths of stay are significantly shorter 
We found significantly shorter home health care episodes after the implementation of  IPS. 
Our data, which are consistent with other research, show a 41 percent decrease in the 
average home health stay for Medicare patients between 1997 and 1999.  On average, 
Medicare patients received home health care for 98 days in 1997. The average was 58 
days in 1999.  A closer look at these data shows that this decrease is not across the board. 
The percentage of patients who have stays of 60 days or less increased by 29 percent, 
while the percentage of patients with stays 300 days or longer decreased by a 90 percent. 
Number of home health patients has declined 
The number of patients discharged from the hospital with home health care declined 23 
percent between 1997 and 1999.  In the first two months of 1997, approximately 462,000 
hospital patients received home health services upon their return home.  During the first 
two months of 1999, this number was down to about 358,000. 
Demographic profile of patients discharged to home health unchanged 
As indicated earlier, although the average length of  home health episodes for Medicare 
patients discharged from the hospital to home health has decreased significantly since the 
implementation of IPS, many other characteristics of this population have not changed 
between 1997 and 1999.  We found only minimal change in the diagnoses of patients who 
get re-admitted or visit the emergency room pre- and post- IPS.  We also found that home 
health patients do not differ pre- and post- IPS in terms of age, sex, race, and hospital 
length of stay.  In both 1997 and 1999, the average age of Medicare patients discharged to 
home health was 77.  Sixty-three percent were women, while 37 percent were men in both 
1997 and 1999.  In addition, the distribution across race categories was similar.  For 
example, in both 1997 and 1999, 85 percent of Medicare patients discharged to home 
health were white and 11 percent were black.  Finally, the average hospital stay for these 
patients pre- and post- IPS was also very similar, 7.9 and 7.6 days, respectively. 
8 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  Re-admission rates do not vary by diagnoses 
Little change in diagnoses of high volume re-admissions 
The re-admission ranking for the five most common diagnoses4 associated with patients 
who get re-admitted to the hospital has remained relatively constant pre- and post-IPS. 
Table 2 shows the most common hospital diagnoses for re-admitted patients based on 
total volume.  Not surprisingly, in both 1997 and 1999, these diagnoses are very similar to 
the diagnoses of patients most likely to get home health care upon discharge from the 
hospital.  The re-admission rates for patients in these high volume diagnoses have not 
increased since the implementation of the interim payment system. 
Table 2

Ranking of Highest Volume Diagnoses For Re-Admitted Patients,

Pre- and Post-IPS

Total Volume  Total Volume 
Initial Hospital Diagnosis  Rank  Rank 
1997  1999 
DRG 127- Heart failure and shock  1 1 
DRG 088- Chronic obstructive pulmonary disease  2 3 
DRG 089- Simple pneumonia and pleuresy  3 2 
DRG 014- Specific cerebrovascular disorders  4 4 
DRG 079- Respiratory infections and inflammations  5 9 
DRG 296- Nutritional and misc. metabolic disorders  6 5 
Source: National Claims History File 
Re-admission rates have not increased for most frequently re-admitted 
diagnoses 
We found that patients with cancer-related diagnoses are the most likely to be re-admitted 
to the hospital.  As Table 3 on the next page shows, the rates at which home health 
patients in these diagnoses were re-admitted to the hospital do not increase pre- and post-
IPS. 
4  Based on diagnosis related group code (DRG) assigned to patient during their initial hospital stay. 
9 
Hospital Re-admissions and ER Visits  OEI-02-99-00531 Table 3

Pre- and Post- IPS Highest Re-admission Rates

for Home Health Patients By Diagnoses

Percent  Percent  Difference 
Initial Hospital Diagnosis  1997  1999  1997-1999 
DRG 473- Acute leukemia w/o major OR procedure  75.3  66.5  -8.8 
DRG 202-Cirrhosis and alcoholic hepatitis  64.2  59.1  -5.1 
DRG 489-HIV w/ major related condition  62.3  58.6  -3.7 
DRG 403- Lymphoma and nonacute leukemia w/ CC  67.9  65.1  -2.8 
DRG 410- Chemotherapy w/o acute leukemia  85.2  83.0  -2.2 
DRG 172-Digestive malignancy w/ CC  63.6  63.3  -0.3 
(N > 200)  Source: National Claims History File 
No increase is found in re-admissions of patients in at-risk diagnoses 
The data in Table 4 on the next page, show no significant increases in the percentage of 
patients re-admitted in at-risk diagnoses.  A number of recent studies5 that look at the 
effects of IPS and the adequacy of home health care identify diagnoses and patient types 
which may be at-risk of receiving inadequate care.  We compared pre- and post-IPS re-
admission rates for these patient types where a Medicare diagnosis code6 match could be 
established.  For example, we are able to examine re-admission rates for congestive heart 
failure home health patients because they can be designated as such under ICD9 code 428. 
However, our analysis does not include two other groups of patients which some 
researchers raise concerns about--chronic care patients and those requiring intensive 
services--because they cannot be identified by diagnosis code. 
5  The sources of the studies we reviewed include: GAO; MedPAC; George Washington University; and, 
DHHS OIG. 
6  For this analysis we used the ICD9 diagnosis code assigned at the start of the patients home health care 
episode. 
10 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  Table 4

Pre- and Post- IPS Percentage of Re-admitted Patients

In At-Risk Diagnoses 

Percent  Percent  Difference 
Home Health ICD9 Diagnosis Code  1997  1999  1997-1999 
ICD9 294- Dementia  39.8  35.5  -4.3 
ICD9 586- Renal Failure  61.8  57.6  -4.2 
ICD9 250- Diabetes  47.8  43.7  -4.1 
ICD9 331-Alzheimers  38.9  35.5  -3.4 
ICD9 428- Heart Failure  52.3  49.0  -3.3 
ICD9 340- Multiple Sclerosis  39.4  36.9  -2.5 
ICD9 494- Bronchiectasis (Pulmonary Disease)  43.6  41.8  -1.8 
ICD9 344- Quadriplegia  45.0  45.5  +0.5 
Source: National Claims History File 
Emergency room visit rates do not vary by diagnoses 
Little change in diagnoses of high volume emergency room users 
As Table 5 on the following page indicates, the ranking for the five most common 
diagnoses associated with patients who visit the emergency room has remained relatively 
constant.  Similar to the case with re-admissions, the rate at which patients in these high 
volume diagnoses visit the emergency room has not increased since the implementation of 
the interim payment system. 
11 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  Table 5

Ranking of Highest Volume Diagnoses For Emergency Room Visit Patients,

Pre- and Post-IPS

Total Volume  Total Volume 
Initial Hospital Diagnosis  Rank  Rank 
1997  1999 
DRG 127- Heart failure and shock  1 1 
DRG 089- Simple pneumonia and pleuresy  2 2 
DRG 088- Chronic obstructive pulmonary disease  3 3 
DRG 014- Specific cerebrovascular disorders  4 4 
DRG 079- Respiratory infections and inflammations  5 10 
DRG 209- Major joint and limb reattachment procedures  6 5 
Source: National Claims History File 
Emergency room visit rates have not increased for patients that frequently visit 
the emergency room 
In both 1997 and 1999, the diagnoses of  home health patients most likely to visit the 
emergency room covered a broader range of diagnoses than those most likely to be re-
admitted to the hospital.  However, patients with respiratory illnesses and those with 
kidney and urinary tract diagnoses show up in the list of frequent emergency room visitors 
in both 1997 and 1999.  As Table 6 on the next page shows, we found the rates at which 
patients in the majority of these diagnoses visit the emergency room does not increase pre-
and post- IPS. 
12 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  Table 6 
Pre- and Post- IPS Emergency Room Visit Rates 
for Home Health Patients By Diagnoses 
Percent  Percent  Difference 
Initial Hospital Diagnosis  1997  1999  1997-1999 
DRG 132- Artherosclerosis w/ CC  34.1  27.9  -6.2 
DRG 315- Other kidney and urinary tract OR  34.6  29.7  -4.9 
procedures 
DRG 099- Respiratory signs and symptoms w/ CC  35.4  30.6  -4.8 
DRG 140- Angina pectoris  31.2  29.5  -1.7 
DRG 143- Chest pain  34.1  32.6  -1.5 
DRG 482- Tracheostomy for face, mouth and neck  28.9  32.3  +3.4 
diagnoses 
DRG 425- Acute adjustment reactions/psychosocial  26.3  30.1  +3.8 
dysfunction 
(N  > 200)  Source: National Claims History File 
No increase is found in emergency room visit rates for at-risk diagnoses 
Finally, we found no significant increase in the rate at which patients in at-risk diagnoses 
visited the emergency room pre- and post-IPS.  As Table 7 on the next page indicates, 
seven of the eight diagnoses we looked at show no increase in emergency room visits rates 
between 1997 and 1999. 
13 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  Table 7 
Pre- and Post- IPS Percentage of Emergency Room Visits 
in At-Risk Diagnoses 
Percent  Percent  Difference 
Home Health ICD9 Diagnosis  1997  1999  1997-1999 
ICD9 250- Diabetes  26.6  22.8  -3.8 
ICD9 428- Heart Failure  26.2  22.5  -3.7 
ICD9 331- Alzheimer's  24.2  20.7  -3.5 
ICD9 340- Multiple Sclerosis  22.6  19.6  -3.0 
ICD9 294- Dementia  23.4  21.1  -2.3 
ICD9 586- Renal Failure  31.1  29.8  -1.3 
ICD9 344- Quadriplegia  27.6  26.6  -1.0 
ICD9 494- Bronchiectasis (Pulmonary Disease)  14.7  18.3  +3.6 
Source: National Claims History File 
Change in re-admission and emergency room visit rate for 
home health patients is consistent with general Medicare 
population 
Re-admission rate changes pre- and post-IPS for home health patients are consistent with 
those for the general population.  The same percentage of home health patients are re-
admitted to the hospital within 60 days of their hospital discharge in 1997 and 1999 (30 
percent).  The rate at which all patients are re-admitted, within this time frame, does not 
change between 1997 and 1999 either (25 percent).  This trend holds up for emergency 
room visit patients as well.  In both 1997 and 1999, 14 percent of home health patients 
visit the emergency room within 60 days of their discharge.  Twelve percent of all patients 
discharged visit the emergency room, within this time frame, in both 1997 and 1999. 
14 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  A G E N C Y  C O M M E N T S  
The Health Care Financing Administration provided comments on this and two related draft 
reports.  They note that our finding that re-admissions and ER visits have declined is an indicator 
of stability in home care under the interim payment system.  They also note that on October 1, 
2000 the new prospective payment system for home health care will go into effect.  They, like we, 
will monitor care under the new system. The HCFAs comments are in Appendix B. 
15 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  APPENDIX A 
Selected List of Other Recent Office of Inspector General 

Home Health Inspections

Office of Inspector General, US Department of Health and Human Services, Medicare 
Beneficiary Access to Home Health Agencies, OEI-02-99-00530, October 1999. 
Office of Inspector General, US Department of Health and Human Services, Medicare 
Beneficiary Access to Home Health Agencies: 2000, OEI-02-00-00320, September 
2000. 
Office of Inspector General, US Department of Health and Human Services,  Medicare 
Home Health Services: Survey and Certification Deficiencies, OEI-02-99-00532, 
September 2000. 
16 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  APPENDIX B 
Agency Comments

In this appendix, we present the comments from the Health Care Financing 
Administration. 
17 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  18 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  19 
Hospital Re-admissions and ER Visits  OEI-02-99-00531  20 
Hospital Re-admissions and ER Visits  OEI-02-99-00531