Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

M B
EDICARE  ENEFICIARY 

A H H
CCESS TO  OME  EALTH 

A :  2004 

GENCIES
Daniel R. Levinson 

Inspector General 

July 2006

OEI-02-04-00260
 Office of Inspector General 

http://oig.hhs.gov 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, 
as amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others. 
Audits examine the performance of HHS programs and/or its grantees and contractors 
in carrying out their respective responsibilities and are intended to provide independent 
assessments of HHS programs and operations.  These assessments help reduce waste, 
abuse, and mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on 
significant issues.  Specifically, these evaluations focus on preventing fraud, waste, or 
abuse and promoting economy, efficiency, and effectiveness in departmental programs.  
To promote impact, the reports also present practical recommendations for improving 
program operations. 
Office of Investigations 
The OIG's Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 
and of unjust enrichment by providers.  The investigative efforts of OI lead to criminal 
convictions, administrative sanctions, or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support in OIG's internal operations. OCIG imposes program exclusions and civil 
monetary penalties on health care providers and litigates those actions within HHS. 
OCIG also represents OIG in the global settlement of cases arising under the Civil False 
Claims Act, develops and monitors corporate integrity agreements, develops compliance 
program guidances, renders advisory opinions on OIG sanctions to the health care 
community, and issues fraud alerts and other industry guidance.  I N T R O D U C T I O N
  E X E C U T I V E   S U M M A R Y  

OBJECTIVE 
To assess Medicare beneficiaries access to home health care since the 
implementation of the prospective payment system. 
BACKGROUND 
This study is a followup to a series of earlier studies conducted by the 
Office of Inspector General (OIG) on access to home health for Medicare 
beneficiaries who are discharged from the hospital to home health care.  
In 1997, the Centers for Medicare & Medicaid Services (CMS) began 
implementing an interim payment system, which was replaced by a 
prospective payment system for home health care in 2000.  In 1999, 
CMS asked OIG to identify any early effects the new payment system 
may be having on Medicare beneficiaries access to home health care. 
This series is part of OIGs ongoing commitment to monitor 
beneficiaries access to home health care.   
The Balanced Budget Act of 1997 required payments for home health 
care to be made on a prospective basis.  The prospective payment rates 
are determined by the Home Health Resource Group (HHRG), which is 
a score based on the complexity of a beneficiarys condition.  There are 
80 HHRGs. Each has a different payment rate that reflects the average 
cost of providing services to beneficiaries with specified conditions. 
This inspection is based on data from two sources:  structured 
interviews with 256 hospital discharge planners who have firsthand 
experience placing Medicare beneficiaries in home health care, and an 
analysis of 5 years of Medicare data on beneficiaries who were 
discharged from a hospital to home health care.  
FINDINGS 
Most Medicare beneficiaries discharged from the hospital have 
access to home health care.  Seventy-nine percent of discharge 
planners report that they are able to place all of their Medicare 
beneficiaries who need home health care in a typical month.  This is a 
statistically significant decrease from our 2001 study, in which 89 
percent of discharge planners reported being able to place all of their 
Medicare beneficiaries who need home health care. 
At the same time, Medicare data show no large changes that may 
indicate a decline in access for beneficiaries with certain medical 
  OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES:  2004  i  E X E C U T I V E   S U M M A R Y  
conditions who were discharged from the hospital to home health care 
in the past 5 years. In our analyses, we define a large change to be 
1 percentage point or greater or 1 day or longer.  A decrease in the 
proportion of Medicare beneficiaries with certain medical conditions 
being placed in home health care might indicate that beneficiaries are 
experiencing a decline in access to home health care.  We found no large 
decreases for 9 of the 10 most common Diagnosis Related Grouping 
(DRGs) over the past 5 years, and no large decreases for any the 10 
most common HHRGs over the past 4 years.  Similarly, an increase in 
the average length of stay in the hospital or an increase in the average 
length of time between hospital discharge and the start of home health 
services might indicate a decline in access.  We found no large increases 
in either of these measures for any of the 10 most common DRGs or for 
any of the 10 most common HHRGs since the implementation of the 
prospective payment system. 
However, beneficiaries with certain medical conditions or service 
needs may experience delays. Seventeen percent of discharge 
planners report having Medicare beneficiaries who experience delays at 
least sometimes before being placed in home health care.  Discharge 
planners report that Medicare beneficiaries who need intravenous (IV) 
antibiotics and/or expensive drugs, those who have complex wound care 
needs, and those who need rehabilitation therapy most often experience 
delays before being placed in home health care.  Discharge planners 
commonly explain that the cost of providing these services or Medicare 
reimbursement is the reason for placement delays.  
No differences in access between beneficiaries in urban and rural 
areas were detected; however, beneficiaries with certain medical 
conditions more frequently receive services from nonprofit 
agencies than from for-profit agencies. We analyzed the proportion 
of Medicare beneficiaries with certain medical conditions in urban and 
rural areas to see if there were any large differences, compared to the 
proportion of all Medicare beneficiaries in home health care in urban 
and rural areas. We found no large differences between urban and 
rural beneficiaries for any of the measures we reviewed.   
We conducted a similar analysis for beneficiaries who received services 
from nonprofit and for-profit agencies.  This analysis showed that, for 5 
of the 10 most common HHRGs, a greater proportion of beneficiaries 
received services from nonprofit agencies compared to the overall 
population.  Further, we found that beneficiaries with 6 of the 10 most 
  OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES:  2004  ii  E X E C U T I V E   S U M M A R Y  
common DRGs who received services from for-profit agencies had longer 
average times between hospital discharge and the start of home health 
services than those receiving services from nonprofit agencies. 
CONCLUSION 
We continue to find that Medicare beneficiaries discharged from 
hospitals generally have access to home health care, despite a 
significant decrease in the proportion of discharge planners who report 
that they are able to place all their beneficiaries in home health care. 
Additionally, we find that Medicare data show no large changes that 
may indicate a decline in access to care for beneficiaries with the most 
common medical conditions and/or service needs discharged to home 
health care in the past 5 years. At the same time, we find that 
discharge planners report that beneficiaries with certain medical 
conditions or service needs may experience placement delays. 
These findings are similar to the findings in our prior three reports, 
suggesting that, overall, the prospective payment system has not 
resulted in reduced access to care.  We encourage CMS to continue to 
monitor access to home health care.  In particular, CMS might closely 
monitor beneficiaries who experience delays in accessing care, 
including those who need IV antibiotics and/or expensive drugs, those 
who need complex wound care, and those who need rehabilitation 
therapy. 
  OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES:  2004  iii  B A N N E R   2 N D   P A G E  
  T A B L E   O F   C O N T E N T S  

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

I N T RO DUC T IO N  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

F I N D IN G S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

Most Medicare beneficiaries have access

to home health care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

Beneficiaries with certain medical conditions may   

experience delays  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

No differences in access between beneficiaries in 

urban and rural areas were detected; however, differences  

exist between nonprofit and for-profit agencies. . . . . . . . . . . . . . .  15

CONC LUSION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

A:  Home Health Resource Groupings . . . . . . . . . . . . . . . . . . . . . .  19

B:  Payment Adjustments forHomeHealth Claims  . . . . . . . . . . .  20

C:  Confidence Intervalsfor Key Findings. . . . . . . . . . . . . . . . . . .  21

D:  Department of AgriculturesUrban Influence Codes. . . . . . . .  22

E:  Analysis of Most Common DRGsand HHRGs. . . . . . . . . . . . .  23

A C K NO WL E D G M E N T S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
   I N T R O D U C T I O N  

OBJECTIVE 
To assess Medicare beneficiaries access to home health care since the 
implementation of the prospective payment system. 
BACKGROUND 
This study is a followup to a series of earlier studies conducted by the 
Office of Inspector General (OIG).  In 1997, the Centers for Medicare & 
Medicaid Services (CMS) began implementing an interim payment 
system, which was replaced by a prospective payment system for home 
health care in 2000. In 1999, CMS asked OIG to identify any early 
effects the new payment system may be having on Medicare 
beneficiaries access to home health care.   
In response, OIG conducted a series of studies on access to home health 
care for Medicare beneficiaries who are discharged from the hospital.  
This series is part of OIGs ongoing commitment to monitor 
beneficiaries access to home health care.  The Medicare Payment 
Advisory Commission has also emphasized the importance of these 
reports and of continuing to monitor access to care for Medicare 
beneficiaries following hospitalization.1 
Medicare Home Health Care 
Home health care consists of skilled nursing, therapy (physical, 
occupational, and speech), and certain related services, including social 
work and aide services, all furnished in a beneficiarys home.  Home 
health agencies that deliver these services can be freestanding or 
hospital-based, and can be classified as nonprofit, for-profit, or 
governmental.  
Medicare pays for home health care only if it is reasonable and 
necessary for the treatment of a beneficiarys illness or injury.  To be 
eligible for care, a beneficiary must be homebound, under the care of a 
physician who has established a plan of care, and need therapy or 
skilled nursing on an intermittent basis.  Occupational therapy alone 
does not constitute a skilled need.  After care has begun and other 
skilled services are discontinued, however, continued occupational 
therapy is considered a skilled need.  There are no limits on the number 
1  Medicare Payment Advisory Commission (MedPAC), Report to Congress:  Medicare 
Payment Policy, March 2004. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  1  I N T R O D U C T I O N  
of visits or length of coverage, and beneficiaries do not have copayments 
or deductibles.  
Home Health Prospective Payment System 
The Balanced Budget Act of 1997 (BBA)2 required payments for home 
health care to be made on a prospective basis.  To allow time to develop 
the prospective payment system, the BBA mandated the 
implementation of an interim payment system.  The interim payment 
system became effective for cost-reporting periods beginning October 1, 
1997, and continued until the implementation of the prospective 
payment system, which began in October 2000.  
The prospective payments are determined by assigning each beneficiary 
to a Home Health Resource Group (HHRG).  The HHRG is a score that 
is based on three dimensions of a beneficiarys condition:  his or her 
clinical condition, functional status, and expected use of services.  There 
are four clinical severity categories (minimal, low, moderate, and high), 
five functional classifications (minimal, low, moderate, high, and 
maximum), and four levels of service use (minimal, low, moderate, and 
high), for a total of 80 possible combinations. Each HHRG has a 
different payment rate that reflects the average cost of providing 
services to a beneficiary in that group.3  Appendix A provides a more 
detailed description of the HHRGs. 
Under the prospective payment system, the home health agency is paid 
for a full 60-day episode, even if care is provided during a fewer number 
of days. If a beneficiary is still eligible for care at the end of the first 
episode, the agency can begin a second 60-day episode.  There is no limit 
on the number of episodes that an eligible beneficiary can receive; 
however, an assessment must be completed for each episode of care a 
beneficiary receives.  If the costs associated with treating a beneficiary 
are unusually large or small, episode payments may be adjusted.  
Appendix B describes the four types of payment adjustments. 
2 Balanced Budget Act of 1997, Pub. L. No. 105-33, 111 Stat. 251. 
3 Upon receiving a referral, the home health agency performs an initial assessment using 
the Outcome and Assessment Information Set.  This assessment is used to convert the 
beneficiarys condition into a numeric score for three areas:  clinical severity, functional 
status, and service utilization. These scores are totaled and the total corresponds to an 
HHRG. 
OEI-02-04-00260 MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  2  I N T R O D U C T I O N

Changes to the Home Health Prospective Payment System 
Congress and CMS have made a number of additional changes to 
eligibility requirements and payment rates. The key changes include: 
o 	 As of February 1998, a beneficiarys need for venipuncture no 
longer constitutes a qualifying skilled need.  Prior to this change 
some beneficiaries, for whom this was their only skilled need, 
qualified for home health care.4 
o 	 In response to concerns over the ambiguity of the definition of 
homebound, the Benefits Improvement and Protection Act of 
2000 clarified that a person can leave his or her home for certain 
purposes, such as attending adult day care activities or religious 
services, and still qualify for Medicare home health care.5 
o 	 Finally, the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 changed the home health prospective 
payment systems update cycle from a fiscal year to a calendar 
year, and increased payments to home health agencies in rural 
areas by 5 percent between April 2004 and April 2005.6 
Recent Trends in Home Health Services 
Since 1992, Medicare spending for home health care has varied greatly. 
From 1992 to 1996, expenditures rose from $6.5 billion to a peak of 
$14.4 billion, before falling to $8.5 billion in 1999 and 2000.  However, 
spending rose again to $16.4 billion in 2004.  See Chart 1 on the 
following page. 
4 42 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A). 
5 Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000,      

Pub. L. No. 106-554, 114 Stat. 2763. 

6 Medicare Prescription Drug, Improvement, and Modernization Act of 2003,        

Pub. L. No. 108-173, 117 Stat. 2066. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  3  I N T R O D U C T I O N  
CHART 1  18 
Medicare Spending 
16 
for Home HeCaaltrhe   ars in 14 
19922004  doll 12 
es ( s)  10 
nditur billion 8 
e
xp 6 
E
al  4 
u
n
n
A 2 
0 
1992  1993 1994  1995  1996 1997  1998  1999 2000  2001  2002 2003  2004 
Calendar Year 
  Source:  CMS, Historical National Health Expenditures by Type of Service and Source of Funds: Calendar 
Years 19602004. 
Medicare data further show that the number of home health agencies 
has increased since 2000. See Chart 2 below. 
CHART 2 
Number of Home  7,600 
Health Agencies,  7,329 
19992004  7,200 
6,997 
6,875 
6,800 
6,579 
6,524 
6,400 
6,000 
5,600 
2000  2001  2002  2003  2004 
Source:  Health Care Information System.  
Finally, Medicare data show that more than 2,839,000 beneficiaries 
received home health care in 2004a 12-percent increase from 2000, 
when more than 2,544,000 beneficiaries received home health care. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  4  I N T R O D U C T I O N  
Discharge Planners 
Federal regulations require all hospitals to offer discharge planning 
services.7  These services are developed by or under the supervision of a 
registered professional nurse, social worker, or other appropriately 
qualified personnel.  In most hospitals, the social work, case 
management, or utilization review department has primary 
responsibility for discharge planning.  Discharge planners conduct a 
patient assessment and meet with utilization review staff, the patients 
nurses and physicians, and other relevant interdisciplinary team 
members to identify patients who are likely to suffer adverse health 
consequences in the absence of adequate discharge planning.  Discharge 
planners then evaluate these patients likely need for posthospital 
services and the availability of these services. 
Prior Work on Access to Home Health Care 
OIG released three reports between 1999 and 2001 on access to home 
health care for Medicare beneficiaries who were discharged from the 
hospital.8  The most recent report, completed after the prospective 
payment system had been in place for about 6 months, found that 
beneficiaries generally had access to home health care.  However, 
discharge planners commonly reported that beneficiaries who use 
expensive drugs not covered under Medicare and/or those needing 
wound care that required frequent visits by home health staff 
experienced more delays being placed in home health care.  These 
findings were consistent with those from the earlier studies. 
OIG also completed a report in 2001 on access to home health care for 
Medicare beneficiaries entering home health care from nonhospital 
settings (i.e., from the community) under the interim payment 
system.9  This report found that generally home health care was 
accessible and that these beneficiaries had experiences similar to those 
of beneficiaries entering home health care following hospitalization. 
7 42 CFR  482.43. 

8 OIG, Medicare Beneficiary Access to Home Health Agencies, OEI-02-99-00530, October 

1999; Medicare Beneficiary Access to Home Health Agencies:  2000, OEI-02-00-00320, 

September 2000; and Access to Home Health Care After Hospital Discharge 2001,   OEI
-
02-01-00180, July 2001. 

9 OIG, Home Health Community Beneficiaries, OEI-02-01-00070, October 2001.

OEI-02-04-00260 MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  5  I N T R O D U C T I O N

SCOPE AND METHODOLOGY 
We based our study on data from two sources:  structured interviews 
with hospital discharge planners who have firsthand experience placing 
Medicare beneficiaries in home health care, and an analysis of Medicare 
data for beneficiaries who were discharged from the hospital to home 
health care. 
Structured Interviews 
We selected a random sample of 300 acute care hospitals with 30 or 
more beds from the 50 States and the District of Columbia.  We found 
that 15 of these hospitals were in fact not acute care hospitals, were 
pediatric, psychiatric, or cancer care centers, or hospitals that were 
bankrupt or no longer qualified to meet the minimum bed standard.     
Of the remaining 285 hospitals, we received responses from 256, which 
resulted in a 90-percent response rate.  We conducted structured 
interviews with the discharge planner or his or her designee from each 
hospital.  We asked discharge planners about their experiences with 
placing Medicare beneficiaries in home health care and the types of 
medical conditions and/or service needs of beneficiaries they are never 
able to place or who experience delays.  We conducted these interviews 
between December 2004 and March 2005.  Note that this is the same 
sample of hospitals used in the OIG study Medicare Beneficiary Access 
to Skilled Nursing Facilities:  2004 (OEI-02-04-00270).  Appendix C 
provides confidence intervals for key findings. 
For relevant questions, we determined whether there were any 
statistical differences between responses to our current interviews and 
responses to similar questions from our 2001 study.  Additionally, we 
compared key characteristics of the hospitals in our current sample with 
those in our 2001 sample.  Specifically, we compared the number and 
type of beds, facility ownership, and whether the hospital was in an 
urban or rural area.  The differences between the samples are within 
statistical sampling variation.   
Analysis of Medicare Data 
We used the most up-to-date Medicare data from CMSs National 
Claims History File that were available at the start of the study.  We 
identified all beneficiaries who:  (1) had a paid home health care claim 
between April 1, 2003, and March 31, 2004; and (2) had a hospital 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  6  I N T R O D U C T I O N  
discharge within 30 days prior to their home health care claim.10 We 
identified all beneficiaries who met these criteria for each year starting 
with April 1, 1999.  
Based on these data, we analyzed several measures to determine 
whether there have been any large changes in beneficiaries access to 
home health care since the implementation of the prospective payment 
system. We define a large change to be 1 percentage point or greater or 
1 day or longer in these analyses.  We analyzed the following measures 
for a 4-year or 5-year period:   
1. 	 the proportion of Medicare beneficiaries who were discharged from 
the hospital to home health care for the 10 most common Diagnosis 
Related Grouping (DRGs)11 and the 10 most common HHRGs to 
assess whether beneficiaries with certain medical conditions are 
being placed in home health care since the implementation of the 
prospective payment system,12 
2. 	 beneficiaries average length of stay in the hospital for the 10 most 
common DRGs and the 10 most common HHRGs to assess whether 
certain beneficiaries are experiencing longer delays before being 
discharged to home health since the implementation of the 
prospective payment system, and 
3. 	 beneficiaries average length of time in days between hospital 
discharge and the start of home health care for the 10 most common 
DRGs and the 10 most common HHRGs to assess whether certain 
beneficiaries are experiencing longer average times before obtaining 
10 Note that we refer to this year of data as 2004 and that each year starts with April 1 of 
the prior year and ends with March 31 of that year.  The timeframe used in this study 
(April 1 to March 31) differs from the timeframe used in the previous OIG studies on access 
to home health care.  Those studies were based on data from the first quarter of each year, 
whereas this study is based on an entire year of data. 
11 Most hospitals are paid a fixed amount for each beneficiary depending on the DRG to 
which the beneficiary is assigned.  A DRG is assigned based on a beneficiarys diagnosis, 
surgery, age, discharge destination, and sex. Each DRG has a weight that reflects the 
relative cost, across all hospitals, of treating cases classified in that DRG. 
12 We found little change in the 10 most common DRGs and HHRGs in each year.  The 10 
most common DRGs represent approximately 35 percent of all beneficiaries each year and 
the 10 most common HHRGs represent approximately 60 percent of all beneficiaries each 
year. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  7  I N T R O D U C T I O N  
home health services since the implementation of the prospective 
payment system.13 
We then analyzed these measures to determine whether there are large 
differences between beneficiaries in urban and rural areas and between 
beneficiaries who receive services from nonprofit and for-profit home 
health agencies.  Using the Urban Influence Codes developed by the 
U.S. Department of Agriculture, we divided the beneficiaries, based on 
their addresses, into urban areas and rural areas.  Appendix D provides 
a more detailed description of the Urban Influence Codes.  Using data 
from CMSs Online Survey Certification and Reporting system, we 
determined which beneficiaries received home health services from 
nonprofit and for-profit home health agencies. 
Specifically, we analyzed the proportion of Medicare beneficiaries with 
certain medical conditions receiving home health care in urban and 
rural areas to see if there were any large differences compared to the 
proportion of all Medicare beneficiaries receiving home health care in 
urban and rural areas. If the proportion of beneficiaries with a certain 
DRG or HHRG differed from the proportion of all beneficiaries in urban 
and rural areas by 5 or more percentage points, we considered it to be a 
large difference.  We conducted a similar analysis of the proportion of 
Medicare beneficiaries who received services from nonprofit and for-
profit agencies.  We conducted these analyses for 2004.      
Scope 
This study focuses on Medicare beneficiaries who are discharged from 
acute care hospitals to home health care.  It does not include Medicare 
beneficiaries who enter home health care from the community or from 
other postacute settings.  Medicare data show that, between April 1, 
2003, and March 31, 2004, beneficiaries discharged from hospitals to 
home health care accounted for 56 percent of all beneficiaries receiving 
home health care.   
Standards 
Our review was conducted in accordance with the Quality Standards 
for Inspections issued by the Presidents Council on Integrity and 
Efficiency and the Executive Council on Integrity and Efficiency. 
13 Medicare beneficiaries may have had an intervening postacute stay between hospital 
discharge and the start of home health care. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  8    F I N D I N G S  
Most Medicare beneficiaries discharged from the  Seventy-nine percent of discharge 
hospital have access to home health care  planners report that all beneficiaries 
can be placed 
As shown in Chart 3, 79 percent of discharge planners report that they 
are able to place all of their Medicare beneficiaries who need home 
health care in a typical month.  This is a statistically significant 
decrease from our 2001 study, in which 89 percent of discharge planners 
reported being able to place all of their Medicare beneficiaries who need 
care in home health.14 
Additionally, 10 percent of discharge planners report not being able to 
place up to 5 percent of their Medicare beneficiaries, while another   
9 percent report not being able to place more than 5 percent of their 
Medicare beneficiaries in a typical month.  In total, discharge planners 
in our sample are not able to place about 0.7 percent of all their 
Medicare beneficiaries (174 of 24,528) who need home health care in a 
typical month.  Discharge planners most commonly explain that these 
beneficiaries are typically sent home without home health care services, 
go to a nursing home, or stay in the hospital. 
CHART 3 
Proportion of  9%  2%
Discharge Planners 
79% Can Place All 
Placing Medicare 
10% 
Beneficiaries in 
10% Cannot Place 15 
Home Health Care 
Percent 
9% Cannot Place More 
Than 5 Percent 
2% Dont Know 
79% 
n=256
14  In a 2-tailed t-test, this difference was significant at the 95-percent confidence level.  
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  9  F I N D I N G S  
Most discharge planners also report that the supply of home health 
services in their area is adequate.  Specifically, 78 percent of discharge 
planners report there are enough home health services available in 
their area for Medicare beneficiaries.  Seventy percent of discharge 
planners report they have to contact an average of 1 agency to place a 
Medicare beneficiary in home health care. An additional 21 percent 
report they have to contact an average of 2 home health agencies, 7 
percent report they have to contact 3 facilities, and 3 percent report 
they have to contact 4 or more agencies. 
Medicare data show no large changes that may indicate a decline in access    
Medicare data show no large changes that may indicate a decline in access 
to care for beneficiaries with certain medical conditions who were 
discharged to home health care in the past 5 years.  Again, we define a 
large change in these analyses to be 1 percentage point or greater or 1 day 
or longer. 
Diagnosis Related Groups.  A decrease in the proportion of Medicare 
beneficiaries with a specific DRG who are discharged from the hospital 
to home health care might indicate that beneficiaries with certain 
medical conditions are experiencing a decline in access to home health 
care.  However, we found no large decreases in the proportion of 
Medicare beneficiaries who were discharged from the hospital to home 
health care for 9 of the 10 most common DRGs over the past 5 years. 
See Table 1 on the following page.  One exception was DRG 014 
(intracranial hemorrhage or cerebral infarction), which has decreased 
by more than 1 percentage point since 2000.  This decrease may be 
explained by a change in the definition of DRG 014, or possible 
miscoding of this particular DRG.15 
15 DRG 014 was designated a postacute transfer DRG in 2001.  The purpose of the transfer 
policy is to avoid providing an incentive for a hospital to transfer a beneficiary to another 
hospital early in the beneficiarys stay in order to minimize costs while still receiving the 
full DRG payment.  A recent OIG audit report  (A-04-04-03000) found that hospitals did not 
always comply with Medicares postacute transfer policy, and improperly coded transfers to 
postacute care as discharges to home.  Additionally, DRG 014 was redefined in October 
2000, when the diagnosis for transient ischemia was removed from the DRG. 
OEI-02-04-00260 MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  10  F I N D I N G S  

Table 1: Proportion of Medicare Beneficiaries Discharged to Home Health Care for the 10 
Most Common DRGs (20002004)* 
Difference 
Initial Hospital DRG  2000  2001  2002  2003  2004  20002004 
DRG 462Rehabilitation  7.4%  7.9%  8.1%  8.6%  8.7%  1.3 
DRG 209Major Joint and Limb  7.0% 7.3% 7.6%  7.9% 8.2% 1.2 
Reattachment Procedures of Lower 
Extremity 
DRG 127Heart Failure and Shock  6.1%  6.0%  5.7%  5.6%  5.6% -0.5 
DRG 089Simple Pneumonia and Pleurisy  4.3%  3.7%  4.1%  3.8%  4.2% -0.1 
DRG 088Chronic Obstructive Pulmonary  3.4%  3.1%  3.1%  2.9%  3.1% -0.3 
Disease 
DRG 148Major Small and Large Bowel  2.1%  2.0%  2.0%  2.0%  1.9% -0.2 
Procedures 
DRG 014Intracranial Hemorrhage or  3.1%  3.1%  3.0%  2.4%  1.9% -1.2 
Cerebral Infarction 
DRG 296Nutrition and Miscellaneous  1.7%  1.7%  1.8%  1.8%  1.7% 0 
Metabolic Disorders 
DRG 107Coronary Bypass With Cardiac  2.0%  2.0%  1.8%  1.8%  1.5% -0.5 
Catherization 
DRG 121Circulatory Disorders with Acute  1.6%  1.6%  1.5%  1.4%  1.4% -0.2 
Myocardial Infarction and Major 
Complications 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year.  
Source:  OIG analysis of CMSs National Claims History File, 2005. 
Home Health Resource Groups.  Similar to our analysis of DRGs, a 
decrease in the proportion of Medicare beneficiaries in an HHRG might 
indicate that beneficiaries with certain service needs are experiencing a 
decline in access to home health care.  Again, we found no substantial 
decreases in the proportion of Medicare beneficiaries who were 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  11  F I N D I N G S  
discharged from the hospital to home health care for the 10 most 
common HHRGs over the past 4 years.16  In fact, the proportion of 
beneficiaries discharged to home health care increased in all but one of 
the most common HHRGs.  See Table 2 below. 
Table 2: Proportion of Medicare Beneficiaries Discharged to Home Health Care for 
the 10 Most Common HHRGs (20002004)* 
Difference 
HHRG  2001  2002  2003  2004  20012004** 
HBGJ (Clinical=low, Functional=mod, Service=min)  8.5%  9.1%  9.2%  9.0%  0.5 
HCGL (Clinical=mod, Functional=mod, Service=mod)  7.0%  6.6%  6.6%  8.2%  1.2 
HBGL (Clinical=low, Functional=mod, Service=mod)  7.7%  7.4%  7.3%  7.6%  0.2 
HCGJ (Clinical=mod, Functional=mod, Service=min)  5.9%  6.0%  6.1%  6.8%  0.8 
HAFJ (Clinical=min, Functional=low, Service=min)  6.0%  6.6%  7.0%  6.4%  0.3 
HBFJ (Clinical=low, Functional=low, Service=min)  5.7%  6.3%  6.6%  6.3%  0.6 
HAGJ (Clinical=min, Functional=mod, Service=min)  5.2%  5.8%  5.8%  5.4%  0.1 
HCFJ (Clinical=mod, Functional=low, Service=min)  3.5%  3.6%  3.7%  3.7%  0.2 
HAGL (Clinical=min, Functional=mod, Service=mod)  4.0%  3.9%  3.6%  3.4%  -0.7 
HAEJ (Clinical=min, Functional=min, Service=min)  2.9%  3.2%  3.5%  3.1%  0.2 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year.  
**Note that data on the HHRGs were first available in 2001. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
Average length of stay in the hospital. An increase in the average length of 
stay in the hospital might indicate that beneficiaries with certain 
medical conditions or service needs are staying in the hospital longer 
because they are experiencing a decline in access to home health care. 
16 Data on the HHRGs were first available in 2001. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  12  F I N D I N G S  
However, we found no large increases in average length of stay in the 
hospital for any of the 10 most common DRGs or for any of the 10 most 
common HHRGs.  In fact, the average length of stay for all of the 10 
most common HHRGs and all but 2 of the DRGs either decreased or 
stayed the same since the implementation of the prospective payment 
system. See Appendix E, Tables 6 and 7. 
Average length of time between hospital discharge and the start of home health 
care.  Similarly, an increase in the average length of time between 
hospital discharge and the start of home health care might indicate that 
beneficiaries with certain medical conditions or service needs may be 
experiencing a decline in access to home health care.  Again, we found 
no large increases in the average length of time between hospital 
discharge and the start of home health services for any of the 10 most 
common DRGs or for any of the 10 most common HHRGs. The average 
length of time in days between hospital discharge and the start of home 
health care for all but 2 DRGs and all 10 HHRGs either decreased or 
stayed the same since the implementation of the prospective payment 
system. See Appendix E, Tables 8 and 9. 
However, beneficiaries with certain medical  Discharge planners report delays placing 
conditions or service needs may experience  certain beneficiaries  
delays  Seventeen percent of discharge 
planners report having Medicare 
beneficiaries who experience delays at least sometimes before being 
placed in home health care.17  This is not a statistically significant 
decrease from the 2001 estimate, when 23 percent of discharge planners 
reported having Medicare beneficiaries who experienced delays at least 
sometimes. 
Sixty-one percent (156 of 256) of discharge planners report ever 
having Medicare beneficiaries who experience delays.  Of those 
discharge planners, most (98 of 156) say that delays are associated 
with certain medical conditions or service needs.  See Table 3 on the 
following page.  Specifically, discharge planners report that Medicare 
beneficiaries who need intravenous (IV) antibiotics and/or expensive 
drugs, those with complex wound care needs, and those who need 
17 A placement delay occurs when a beneficiary is medically cleared by a doctor for 
discharge, but no home health services have been secured. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  13  F I N D I N G S  
rehabilitation therapy most often experience delays before being 
placed in home health care.  These medical conditions and service 
needs are the same as the ones that discharge planners report are 
associated with Medicare beneficiaries they can never place in home 
health care. 
Table 3: Medical Conditions/Service Needs Associated With 
Placement Delays 
n= 98 
IV Antibiotics/Infusion/Drug Needs  52 
Wound Care/Decubitus Ulcer  31 
Rehabilitation/Therapy Needs  26 
Medically Complex/High Acuity  14 
Total Parenteral Nutrition/IV Feeding  11 
Note: Responses are not mutually exclusive.  
Source:  OIG analysis of discharge planner interviews, 2005. 
Discharge planners who report delays placing Medicare beneficiaries in 
home health care commonly explain that the cost of providing these 
services or Medicare reimbursement (44 of 98) is the reason for 
placement delays.  Specifically, they report that Medicare does not 
always cover certain medical needs, such as IV antibiotics, and that 
Medicare does not always cover all the costs associated with 
beneficiaries who need high levels of care.18 Discharge planners also 
explain that staffing needs (22 of 98), such as a shortage of qualified 
physical therapists, and difficulty obtaining supplies (12 of 98), such as 
wheelchairs and respiratory equipment, may cause delays in placing 
beneficiaries. 
18 Home infusion therapy is not covered unless it is administered by durable medical 
equipment (42 USC 1395y). 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  14  The medical conditions and service needs that discharge planners 
associate with beneficiaries whose placement is delayed, as well as the 
reasons for delays, are similar to the ones that discharge planners 
reported in previous studies.  In 2001, discharge planners reported that 
Medicare beneficiaries who needed IV therapy or expensive drugs and 
those with complex wound care needs most often experienced placement 
delays. In 2001, some discharge planners also attributed placement 
delays to medical conditions requiring several visits per day. 
No differences in access between beneficiaries  No differences in beneficiaries with 
in urban and rural areas were detected; however,  certain medical conditions in urban 
beneficiaries with certain medical conditions  and rural areas were detected 
We analyzed the proportion of 
more frequently receive services from nonprofit 
Medicare beneficiaries with certain 
agencies than from for-profit agencies 
medical conditions in urban and 
rural areas to see if there were any large differences compared to the 
proportion of all Medicare beneficiaries in home health care in urban 
and rural areas. In 2004, 79 percent of all beneficiaries in home health 
care were in urban areas and 21 percent were in rural areas. If the 
proportion of beneficiaries with a certain DRG or HHRG differed from 
these proportions by 5 or more percentage points, we considered it to be 
a large difference.  We found no large differences in the proportion of 
Medicare beneficiaries in urban and rural areas with the 10 most 
common DRGs and the 10 most common HHRGs, compared to the 
proportion of all beneficiaries in urban and rural areas.  See Appendix 
E, Tables 10 and 11. 
We also found no large differences between beneficiaries in urban and 
rural areas in the average length of stay in the hospital and the average 
length of time before the start of home health services.  Beneficiaries in 
urban and rural areas had similar average lengths of hospital stays and 
average times between hospital discharge and the start of home health 
services for all of the 10 most common DRGs and all of the 10 most 
common HHRGs.  See Appendix E, Tables 12, 13, 14, and 15. 
In our interviews, 54 percent of discharge planners report no difference 
between placing Medicare beneficiaries in urban and rural areas, 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  15  F I N D I N G S  
whereas 34 percent of discharge planners report some differences.19 
Those who say that placing Medicare beneficiaries in urban areas is 
easier commonly explain that urban agencies are more accessible and 
staffing is adequate.  Those who report that placing Medicare 
beneficiaries in rural areas is easier say that there is often less waiting 
time to receive services from these agencies and that patients are more 
often familiar with the agencies. 
Beneficiaries with certain medical conditions receive services more 
frequently from nonprofit agencies than from for-profit agencies 
We conducted a similar analysis of Medicare beneficiaries with certain 
medical conditions who received services from nonprofit and for-profit 
agencies to see if there were any large differences (i.e., 5 or more 
percentage points) compared to the proportion of all Medicare 
beneficiaries receiving services from nonprofit and for-profit agencies. 
In 2004, 58 percent of beneficiaries received services from nonprofit 
agencies and 36 percent received services from for-profit agencies.20 
We found that beneficiaries with certain HHRGs receive services more 
frequently from nonprofit agencies than from for-profit agencies, 
compared to all beneficiaries.  Specifically, for 5 of the 10 most common 
HHRGs, a greater proportion of beneficiaries received services from 
nonprofit agencies compared to the overall population.  At the same 
time, for another one of these HHRGs, a greater proportion of 
beneficiaries received services from for-profit agencies compared to the 
overall population.21  See Appendix E, Table 17.  
Further, some beneficiaries who received services from for-profit 
agencies experienced a longer time between hospital discharge and the 
start of home health care compared to beneficiaries placed in nonprofit 
agencies. Specifically, beneficiaries with 6 of the 10 most common 
DRGs who received services from for-profit agencies had longer average 
19 The remaining 12 percent of discharge planners report having no experience placing 
Medicare beneficiaries in both urban and rural areas or report that they dont know. 
20 The remaining 7 percent of beneficiaries received services from government home health 
agencies. Note that the total does not equal 100 percent due to rounding. 
21 In addition, the proportion of beneficiaries with DRG 107 who received services from 
nonprofit agencies was at least 5 percentage points greater than all beneficiaries who 
received services from nonprofit agencies.  Also, the proportion of beneficiaries with DRG 
462 who received services from for-profit agencies was at least 5 percentage points greater 
than all beneficiaries who received services from for-profit agencies.  See Appendix D, Table 
16. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  16  F I N D I N G S  
times between hospital discharge and the start of home health services 
than those receiving services from nonprofit agencies.  See Appendix E, 
Table 20. Note that there may be several reasons for this distribution 
that may not necessarily indicate a difference in access. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  17    C O N C L U S I O N  

We continue to find that Medicare beneficiaries discharged from 
hospitals generally have access to home health care, despite a 
significant decrease in the proportion of discharge planners who report 
that they are able to place all their beneficiaries in home health care. 
Additionally, we find that Medicare data show no large changes that 
may indicate a decline in access to care for beneficiaries with the most 
common medical conditions and/or service needs discharged to home 
health care in the past 5 years. At the same time, discharge planners 
report that beneficiaries with certain medical conditions or service 
needs may experience placement delays.   
These findings are similar to the findings in our prior three reports, 
suggesting that, overall, the prospective payment system has not 
resulted in reduced access to home health care.  We encourage CMS 
to continue to monitor access to home health care.  In particular, CMS 
might closely monitor beneficiaries who experience delays in 
accessing care, including those who need IV antibiotics and/or 
expensive drugs, those who need complex wound care, and those who 
need rehabilitation therapy. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  18    A P P E N D I X   ~   A  
Home Health Resource Groupings 
Each Home Health Resource Grouping (HHRG) is composed of three domains or dimensions 
clinical, functional, and service.  The clinical dimension is based on factors such as selected 
diagnoses, sensory impairments, pressure ulcers, incontinence, and behavioral problems. The 
functional domain is based on six activities of daily living, such as dressing, bathing, and 
ambulation/locomotion. The service dimension is based on the patient's institutional setting 
in the 2-week period prior to the start of the home health episode and the amount of therapy 
received during the home health episode.  The service measures are intended as proxy 
indicators of patient case mix and need for services.  The combined four clinical, five 
functional, and four service levels are denoted, respectively, C0 to C3, F0 to F4, and S0 to S3.  
The 80 HHRGs are formed by taking all combinations of one level from each dimension  
(e.g., C0-F0-S0). 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  19    A P P E N D I X   ~   B  
Payment Adjustments for Home Health Claims 
Generally, Medicare makes payment under the home health prospective payment system on the 
basis of a national standardized 60-day episode payment, adjusted for case mix and wage index. 
Additionally, there are four types of payment adjustments for unusually large or small costs: 
Partial Episode Payment. This adjustment occurs when (1) a beneficiary elects to transfer to 
another home health agency, or (2) a beneficiary is discharged and returns to the same home 
health agency.  The original episode payment is proportionally adjusted to reflect the length of 
time the beneficiary remains under the agencys care before the intervening event.  
Significant Change in Condition.  This is the proportional payment adjustment that occurs when a 
beneficiary experiences a significant change in condition that was not envisioned in the original 
plan of care. To receive a new case-mix assignment for purposes of this payment, the home 
health agency must complete an assessment and obtain the necessary physician orders 
reflecting the significant change in treatment approach.  
Low Utilization Payment Adjustment.  The home health agency receives less than the full 60-day 
episode rate if it provides four or fewer visits to a beneficiary.  For these episodes, the home 
health agency is paid the standardized, service-specific, per-visit amount multiplied by the 
number of visits actually provided during the episode. 
Outlier Payment.  Outlier payments are made for episodes for which the imputed cost exceeds a 
threshold amount for each case-mix group.  The amount of the outlier payment is a proportion of 
the amount of imputed costs beyond the threshold.  For each episode reported on the claim, CMS 
imputes the cost for each episode by multiplying the national per-visit amount of each discipline 
(i.e., skilled nursing services, home health aide services, physical therapy services, occupational 
therapy services, speech-language pathology services, and medical services) by the number of 
visits in the discipline and computing the total imputed cost for all disciplines.   
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  20    A P P E N D I X   ~   C  
Confidence Intervals for Key Findings 
Table 4: Point Estimates and Confidence Intervals for Key Findings 
Key Findings  n  Point Estimate  Confidence Interval* 
Seventy-nine percent of discharge planners report they are  256  79%  +/-4.99 
able to place all of their Medicare beneficiaries who need 
home health care in a typical month. 
Seventy-eight percent of discharge planners report there are  256  78%  +/-5.07 
enough home health services available in their area for 
Medicare beneficiaries. 
Sixty-nine percent of discharge planners report they have to  256  69%  +/-5.67 
contact an average of 1 agency to place a Medicare 
beneficiary in home health care. 
Seventeen percent of discharge planners report having 
 256  17%  +/-4.60 
Medicare beneficiaries who experience delays at least 

sometimes before being placed in home health care. 

Most discharge planners who report ever having Medicare  156  63%  +/-7.58 
beneficiaries who experience delays (98 of 156)** say that 
delays are associated with certain medical conditions or 
service needs. 
Fifty-four percent of discharge planners report no difference  256  54%  +/-6.11 
between placing beneficiaries in urban areas and rural areas. 
*95-Percent confidence interval. 
** The denominator (i.e., 156) includes discharge planners who report having Medicare beneficiaries who experience delays at least sometimes and 
discharge planners who report rarely having Medicare beneficiaries who experience delays.   
Source:  OIG analysis of discharge planner interviews, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  21    AA PP PP EE NN DD II XX    ~~    DD   
Department of Agricultures Urban Influence Codes 
The Urban Influence Codes were developed by the Department of Agriculture Economic 
Research Service to take into account the geographic relationship of rural areas to larger urban 
economies. The Urban Influence Codes divide U.S. counties, county equivalents, and 
independent cities into 12 categories as described in the table below.   In our analysis, we 
considered the first 2 categories as urban areas and the remaining 10 categories as rural areas. 
This is similar to the method used by the Medicare Payment Advisory Commission in its June 
2001 Report to Congress:  Medicare in Rural America.  
Table 5: Urban Influence Codes 
Code  2003 Description  Designation 
1  In large metro area of 1+ million residents  Urban 
2  In small metro area of less than 1 million residents  Urban 
3  Micropolitan adjacent to large metro  Rural 
4  Noncore adjacent to large metro  Rural 
5  Micropolitan adjacent to small metro  Rural 
6  Noncore adjacent to small metro with own town  Rural 
7  Noncore adjacent to small metro no own town  Rural 
8  Micropolitan not adjacent to a metro area  Rural 
9  Noncore adjacent to micro with own town  Rural 
10  Noncore adjacent to micro with no own town  Rural 
11  Noncore not adjacent to metro or micro with own town  Rural 
12  Noncore not adjacent to metro or micro with no own town  Rural 
Source:  Economic Research Service, U.S. Department of Agriculture. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  22    A P P E N D I X   ~   E  
Analysis of Most Common DRGs and HHRGs 
Table 6: Average Length of Hospital Stay in Days for the 10 Most Common      
DRGs (20002004)* 
Difference 
DRG  2000  2001  2002  2003  2004  20002004 
DRG 462Rehabilitation  13.3  12.8  12.5  12.4  12.3  -1.0 
DRG 209Major Joint and Limb  4.9  4.8  4.7  4.5  4.4  -0.5 
Reattachment Procedures of Lower 
Extremity 
DRG 127Heart Failure and Shock  6.4  6.4  6.4  6.3  6.3  -0.1 
DRG 089Simple Pneumonia and Pleurisy,  7.0  7.0  7.0  6.9  6.9  -0.1 
Age Greater Than 17, With Complications 
or Comorbidities 
DRG 088Chronic Obstructive Pulmonary  6.5  6.5  6.5  6.6  6.6  0.1 
Disease 
DRG 148Major Small and Large Bowel  13.0  13.1  13.1  13.1  12.9  -0.1 
Procedures, With Complications or 
Comorbidities 
DRG 014Intracranial Hemorrhage or  7.0  6.9  7.0  7.3  7.1  0.1 
Cerebral Infarction 
DRG 296Nutrition and Miscellaneous  6.0  6.0  5.9  5.8  5.7  -0.3 
Metabolic Disorders, Age Greater Than 17, 
With Complications or Comorbidities 
DRG 107Coronary Bypass With Cardiac  10.4  10.4  10.3  10.4  10.3  -0.1 
Catherization 
DRG 121Circulatory Disorders With Acute  8.0  7.9  7.8  7.8  7.6  -0.4 
Myocardial Infarction and Major 
Complications, Discharged Alive 
Source:  OIG analysis of CMSs National Claims History File, 2005. 

*Note that the year starts with April 1 of the prior year and ends with March 31 of that year.

OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  23  A P P E N D I X   ~   E  

Table 7: Average Length of Hospital Stay in Days for the 10 Most Common      
HHRGs (20012004)* 
Difference 
HHRG  2001  2002  2003  2004  20002004 
HBGJ (Clinical=low, Functional=mod, Service=min)  6.9  6.8  6.8  6.6  -0.3 
HCGL (Clinical=mod, Functional=mod, Service=mod)  7.8  7.7  7.6  7.3  -0.5 
HBGL (Clinical=low, Functional=mod, Service=mod)  7.3  7.2  7.2  7.2  -0.1 
HCGJ (Clinical=mod, Functional=mod, Service=min)  7.5  7.4  7.3  7.0  -0.5 
HAFJ (Clinical=min, Functional=low, Service=min)  6.6  6.5  6.4  6.3  -0.3 
HBFJ (Clinical=low, Functional=low, Service=min)  6.7  6.7  6.6  6.5  -0.2 
HAGJ (Clinical=min, Functional=mod, Service=min)  7.1  7.1  6.9  6.8  -0.3 
HCFJ (Clinical=mod, Functional=low, Service=min)  7.1  7.1  6.9  6.8  -0.3 
HAGL (Clinical=min, Functional=mod, Service=mod)  7.8  7.8  7.7  7.8  0 
HAEJ (Clinical=min, Functional=min, Service=min)  6.3  6.2  6.1  6.0  -0.3 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
Note that data on the HHRGs were first available in 2001. 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  24  A P P E N D I X   ~   E  

Table 8: Average Length of Time Between Hospital Discharge and the Start of Home 
Health Care in Days, for the 10 Most Common DRGs (20002004)* 
Difference 
DRG  2000  2001  2002  2003  2004  20002004 
DRG 462Rehabilitation  3.1  2.9  2.8  2.7  2.7  -0.4 
DRG 209Major Joint and Limb  7.4  7.3  7.1  7.0  6.7  -0.7 
Reattachment Procedures of Lower 
Extremity 
DRG 127Heart Failure and Shock  4.7  4.5  4.6  4.6  4.7  0 
DRG 089Simple Pneumonia and  5.0  4.8  4.8  4.9  5.0  0 
Pleurisy, Age Greater Than 17, With 
Complications or Comorbidities 
DRG 088Chronic Obstructive  4.5  4.2  4.3  4.4  4.4  -0.1 
Pulmonary Disease 
DRG 148Major Small and Large Bowel  5.0  4.8  4.7  4.8  4.9  -0.1 
Procedures, With Complications or 
Comorbidities 
DRG 014Intracranial Hemorrhage or  6.5  6.3  6.3  6.4  6.4  -0.1 
Cerebral Infarction 
DRG 296Nutrition and Miscellaneous  5.9  5.6  5.8  5.8  6.0  0.1 
Metabolic Disorders, Age Greater Than 
17, With Complications or Comorbidities 
DRG 107Coronary Bypass With  3.6  3.4  3.4  3.4  3.4  -0.2 
Cardiac Catherization 
DRG 121Circulatory Disorders With  5.0  4.9  5.0  5.1  5.3  0.3 
Acute Myocardial Infarction and Major 
Complications, Discharged Alive 
Source:  OIG analysis of CMSs National Claims History File, 2005. 

*Note that the year starts with April 1 of the prior year and ends with March 31 of that year.

OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004
 25  A P P E N D I X   ~   E  

Table 9: Average Length of Time Between Hospital Discharge and the Start of Home Health 
Care in Days, for the 10 Most Common HHRGs (20012004)* 
Difference 
HHRG  2001  2002  2003  2004  20012004** 
HBGJ (Clinical=low, Functional=mod, Service=min)  3.6  3.4  3.3  3.3  -0.3 
HCGL (Clinical=mod, Functional=mod, Service=mod)  4.9  4.4  4.2  4.0  -0.9 
HBGL (Clinical=low, Functional=mod, Service=mod)  4.5  4.2  4.1  4.1  -0.4 
HCGJ (Clinical=mod, Functional=mod, Service=min)  4.1  3.8  3.7  3.5  -0.6 
HAFJ (Clinical=min, Functional=low, Service=min)  3.1  2.9  2.9  2.9  -0.2 
HBFJ (Clinical=low, Functional=low, Service=min)  3.3  3.1  3.1  3.1  -0.2 
HAGJ (Clinical=min, Functional=mod, Service=min)  3.4  3.3  3.2  3.2  -0.2 
HCFJ (Clinical=mod, Functional=low, Service=min)  3.8  3.5  3.4  3.4  -0.4 
HAGL (Clinical=min, Functional=mod, Service=mod)  4.4  4.1  4.0  3.9  -0.5 
HAEJ (Clinical=min, Functional=min, Service=min)  2.8  2.7  2.7  2.8  0 
Source:  OIG analysis of CMSs National Claims History File, 2005.  
Note that data on the HHRGs were first available in 2001. 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  26  A P P E N D I X   ~   E  

Table 10:  Beneficiaries in Urban and Rural Areas for the 10 Most Common 
DRGs, Compared to All Beneficiaries, 2004* 
DRG  Urban  Rural 
DRG 462Rehabilitation  81.2%  18.8% 
DRG 209Major Joint and Limb Reattachment Procedures of  74.3%  25.7% 
Lower Extremity 
DRG 127Heart Failure and Shock  79.8%  20.2% 
DRG 089Simple Pneumonia and Pleurisy, Age Greater  76.4%  23.6% 
Than 17, With Complications or Comorbidities 
DRG 088Chronic Obstructive Pulmonary Disease  78.5%  21.6% 
DRG 148Major Small and Large Bowel Procedures, With  77.5%  22.5% 
Complications or Comorbidities 
DRG 014Intracranial Hemorrhage or Cerebral Infarction   79.4%  20.6% 
DRG 296Nutrition and Miscellaneous Metabolic Disorders,  77.7%  22.3% 
Age Greater Than 17, With Complications or Comorbidities 
DRG 107Coronary Bypass With Cardiac Catherization  76.2%  23.8% 
DRG 121Circulatory Disorders With Acute Myocardial  78.5%  21.5% 
Infarction and Major Complications, Discharged Alive 
All Beneficiaries  79.1%  20.9% 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
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Table 11:  Beneficiaries in Urban and Rural Areas for the 10 Most Common 
HHRGs, Compared to All HHRGs, 2004* 
HHRG  Urban  Rural 
HBGJ (Clinical=low, Functional=mod, Service=min)  76.1%  23.9% 
HCGL (Clinical=mod, Functional=mod, Service=mod)  77.5%  22.5% 
HBGL (Clinical=low, Functional=mod, Service=mod)  79.3%  20.7% 
HCGJ (Clinical=mod, Functional=mod, Service=min)  74.9%  25.2% 
HAFJ (Clinical=min, Functional=low, Service=min)  82.0%  18.0% 
HBFJ (Clinical=low, Functional=low, Service=min)  78.0%  22.1% 
HAGJ (Clinical=min, Functional=mod, Service=min)  80.3%  19.7% 
HCFJ (Clinical=mod, Functional=low, Service=min)  77.2%  22.8% 
HAGL (Clinical=min, Functional=mod, Service=mod)  82.2%  17.8% 
HAEJ (Clinical=min, Functional=min, Service=min)  83.6%  16.4% 
All Beneficiaries  79.1%  20.9% 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  28  A P P E N D I X   ~   E  

Table 12:  Urban and Rural Differences in the Average Length of Hospital Stay 
in Days for the 10 Most Common DRGs, 2004* 
DRG  Urban  Rural 
DRG 462Rehabilitation  12.3  12.5 
DRG 209Major Joint and Limb Reattachment Procedures of  4.3  4.5 
Lower Extremity 
DRG 127Heart Failure and Shock  6.4  5.7 
DRG 089Simple Pneumonia and Pleurisy, Age Greater  7.0  6.4 
Than 17, With Complications or Comorbidities 
DRG 088Chronic Obstructive Pulmonary Disease  6.8  5.9 
DRG 148Major Small and Large Bowel Procedures, With  12.9  12.7 
Complications or Comorbidities 
DRG 014Intracranial Hemorrhage or Cerebral Infarction   7.2  6.5 
DRG 296Nutrition and Miscellaneous Metabolic Disorders,  5.8  5.3 
Age Greater Than 17, With Complications or Comorbidities 
DRG 107Coronary Bypass With Cardiac Catherization  10.4  10.1 
DRG 121Circulatory Disorders With Acute Myocardial  7.7  7.1 
Infarction and Major Complications, Discharged Alive 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  29  A P P E N D I X   ~   E  

Table 13:  Urban and Rural Differences in the Average Length of Hospital Stay 
in Days for the 10 Most Common HHRGs, 2004* 
HHRG  Urban  Rural 
HBGJ (Clinical=low, Functional=mod, Service=min)  6.8  6.3 
HCGL (Clinical=mod, Functional=mod, Service=mod)  7.5  6.8 
HBGL (Clinical=low, Functional=mod, Service=mod)  7.3  6.7 
HCGJ (Clinical=mod, Functional=mod, Service=min)  7.1  6.7 
HAFJ (Clinical=min, Functional=low, Service=min)  6.3  5.9 
HBFJ (Clinical=low, Functional=low, Service=min)  6.6  6.1 
HAGJ (Clinical=min, Functional=mod, Service=min)  6.9  6.4 
HCFJ (Clinical=mod, Functional=low, Service=min)  6.9  6.5 
HAGL (Clinical=min, Functional=mod, Service=mod)  7.9  7.3 
HAEJ (Clinical=min, Functional=min, Service=min)  6.1  5.7 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  30  A P P E N D I X   ~   E  

Table 14:  Urban and Rural Differences in the Average Length of Time Between 
Hospital Discharge and the Start of Home Health Care in Days, for the 10 Most 
Common DRGs, 2004* 
DRG  Urban  Rural 
DRG 462Rehabilitation  2.6  2.7 
DRG 209Major Joint and Limb Reattachment Procedures of  6.9  6.1 
Lower Extremity 
DRG 127Heart Failure and Shock  4.7  4.7 
DRG 089Simple Pneumonia and Pleurisy, Age Greater  5.1  4.9 
Than 17, With Complications or Comorbidities 
DRG 088Chronic Obstructive Pulmonary Disease  4.3  4.5 
DRG 148Major Small and Large Bowel Procedures, With  5.0  4.6 
Complications or Comorbidities 
DRG 014Intracranial Hemorrhage or Cerebral Infarction  6.3  6.5 
DRG 296Nutrition and Miscellaneous Metabolic Disorders,  6.1  5.8 
Age Greater Than 17, With Complications or Comorbidities 
DRG 107Coronary Bypass With Cardiac Catherization  3.5  3.1 
DRG 121Circulatory Disorders With Acute Myocardial  5.3  5.4 
Infarction and Major Complications, Discharged Alive 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  31  A P P E N D I X   ~   E  

Table 15:  Urban and Rural Differences in the Average Length of Time Between 
Hospital Discharge and the Start of Home Health Care in Days, for the 10 Most 
Common HHRGs, 2004* 
HHRG  Urban  Rural 
HBGJ (Clinical=low, Functional=mod, Service=min)  3.2  3.5 
HCGL (Clinical=mod, Functional=mod, Service=mod)  3.9  4.3 
HBGL (Clinical=low, Functional=mod, Service=mod)  4.0  4.3 
HCGJ (Clinical=mod, Functional=mod, Service=min)  3.4  3.7 
HAFJ (Clinical=min, Functional=low, Service=min)  2.9  3.1 
HBFJ (Clinical=low, Functional=low, Service=min)  3.1  3.3 
HAGJ (Clinical=min, Functional=mod, Service=min)  3.1  3.5 
HCFJ (Clinical=mod, Functional=low, Service=min)  3.3  3.7 
HAGL (Clinical=min, Functional=mod, Service=mod)  3.8  4.4 
HAEJ (Clinical=min, Functional=min, Service=min)  2.7  3.0 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  32  A P P E N D I X   ~   E  

Table 16:  Beneficiaries in Nonprofit and For-Profit Agencies for the 10 Most 
Common DRGs, Compared to All Beneficiaries, 2004* 
DRG  Nonprofit  For-Profit 
DRG 462Rehabilitation  52.8%  41.8% 
DRG 209Major Joint and Limb Reattachment Procedures of  58.0%  34.4% 
Lower Extremity 
DRG 127Heart Failure and Shock  59.2%  34.1% 
DRG 089Simple Pneumonia and Pleurisy, Age Greater  58.5%  33.7% 
Than 17, With Complications or Comorbidities 
DRG 088Chronic Obstructive Pulmonary Disease  57.7%  35.1% 
DRG 148Major Small and Large Bowel Procedures, With  61.6%  31.1% 
Complications or Comorbidities 
DRG 014Intracranial Hemorrhage or Cerebral Infarction   57.7%  35.7% 
DRG 296Nutrition and Miscellaneous Metabolic Disorders,  56.6%  36.2% 
Age Greater Than 17, With Complications or Comorbidities 
DRG 107Coronary Bypass With Cardiac Catherization  62.9%  31.1% 
DRG 121Circulatory Disorders With Acute Myocardial  61.5%  31.6% 
Infarction and Major Complications, Discharged Alive 
All Beneficiaries**  57.6%  35.8% 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
**Note that 6.6 percent of beneficiaries were admitted to government home health agencies (HHA). 
The proportion of beneficiaries with this DRG differed from the proportion of all beneficiaries by at least 5 percentage 
points, which we considered to be a large difference. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  33  A P P E N D I X   ~   E  

Table 17:  Beneficiaries in Nonprofit and For-Profit Agencies for the 10 Most 
Common HHRGs, Compared to All Beneficiaries, 2004* 
HHRG  Nonprofit  For-Profit 
HBGJ (Clinical=low, Functional=mod, Service=min)  63.6%  28.9% 
HCGL (Clinical=mod, Functional=mod, Service=mod)  47.8%  45.9% 
HBGL (Clinical=low, Functional=mod, Service=mod)  54.5%  38.4% 
HCGJ (Clinical=mod, Functional=mod, Service=min)  60.0%  33.4% 
HAFJ (Clinical=min, Functional=low, Service=min)  69.0%  24.2% 
HBFJ (Clinical=low, Functional=low, Service=min)  64.2%  28.8% 
HAGJ (Clinical=min, Functional=mod, Service=min)  68.6%  23.9% 
HCFJ (Clinical=mod, Functional=low, Service=min)  60.2%  33.2% 
HAGL (Clinical=min, Functional=mod, Service=mod)  62.1%  31.2% 
HAEJ (Clinical=min, Functional=min, Service=min)  68.7%  25.0% 
All Beneficiaries**  57.6%  35.8% 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
**Note that 6.6 percent of beneficiaries were admitted to government HHAs. 
The proportion of beneficiaries with this HHRG differed from the proportion of all beneficiaries by at least 5 percentage 
points, which we considered to be a large difference. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  34  A P P E N D I X   ~   E  

Note that this table is for informational purposes only.  It is not referenced in the report. 
Table 18:  Nonprofit and For-Profit Differences in the Average Length of 
Hospital Stay in Days for the 10 Most Common DRGs, 2004* 
DRG  Nonprofit  For-Profit 
DRG 462Rehabilitation  12.2  12.4 
DRG 209Major Joint and Limb Reattachment Procedures of  4.3  4.5 
Lower Extremity 
DRG 127Heart Failure and Shock  6.2  6.5 
DRG 089Simple Pneumonia and Pleurisy, Age Greater  6.7  7.2 
Than 17, With Complications or Comorbidities 
DRG 088Chronic Obstructive Pulmonary Disease  6.4  7.0 
DRG 148Major Small and Large Bowel Procedures, With  12.8  13.1 
Complications or Comorbidities 
DRG 014Intracranial Hemorrhage or Cerebral Infarction   7.0  7.2 
DRG 296Nutrition and Miscellaneous Metabolic Disorders,  5.5  5.9 
Age Greater Than 17, With Complications or Comorbidities 
DRG 107Coronary Bypass With Cardiac Catherization  10.2  10.6 
DRG 121Circulatory Disorders With Acute Myocardial  7.5  7.8 
Infarction and Major Complications, Discharged Alive 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  35  A P P E N D I X   ~   E  

Note that this table is for informational purposes only.  It is not referenced in the report. 
Table 19:  Nonprofit and For-Profit Differences in the Average Length of 
Hospital Stay in Days for the 10 Most Common HHRGs, 2004* 
HHRG  Nonprofit  For-Profit 
HBGJ (Clinical=low, Functional=mod, Service=min)  6.6  6.7 
HCGL (Clinical=mod, Functional=mod, Service=mod)  7.4  7.3 
HBGL (Clinical=low, Functional=mod, Service=mod)  7.2  7.3 
HCGJ (Clinical=mod, Functional=mod, Service=min)  7.0  7.1 
HAFJ (Clinical=min, Functional=low, Service=min)  6.3  6.2 
HBFJ (Clinical=low, Functional=low, Service=min)  6.5  6.5 
HAGJ (Clinical=min, Functional=mod, Service=min)  6.8  6.8 
HCFJ (Clinical=mod, Functional=low, Service=min)  6.8  6.8 
HAGL (Clinical=min, Functional=mod, Service=mod)  7.8  7.7 
HAEJ (Clinical=min, Functional=min, Service=min)  6.0  6.2 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  36  A P P E N D I X   ~   E  

Table 20:  Nonprofit and For-Profit Differences in the Average Length of Time 
Between Hospital Discharge and the Start of Home Health Care in Days, for the 
10 Most Common DRGs, 2004* 
DRG  Nonprofit  For-Profit 
DRG 462Rehabilitation  2.5  2.9 
DRG 209Major Joint and Limb Reattachment Procedures of  6.5  7.0 
Lower Extremity 
DRG 127Heart Failure and Shock  4.2  5.5 
DRG 089Simple Pneumonia and Pleurisy, Age Greater  4.7  5.7 
Than 17, With Complications or Comorbidities 
DRG 088Chronic Obstructive Pulmonary Disease  4.0  5.1 
DRG 148Major Small and Large Bowel Procedures, With  4.7  5.4 
Complications or Comorbidities 
DRG 014Intracranial Hemorrhage or Cerebral Infarction   5.9  7.2 
DRG 296Nutrition and Miscellaneous Metabolic Disorders,  5.5  6.9 
Age Greater Than 17, With Complications or Comorbidities 
DRG 107Coronary Bypass With Cardiac Catherization  3.2  3.9 
DRG 121Circulatory Disorders With Acute Myocardial  4.9  6.2 
Infarction and Major Complications, Discharged Alive 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
Note that these DRGs differed by 1 day or more. 

Source:  OIG analysis of CMSs National Claims History File, 2005. 

OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  37  A P P E N D I X   ~   E  

Note that this table is for informational purposes only.  It is not referenced in the report. 
Table 21:  Nonprofit and For-Profit Differences in the Average Length of Time 
Between Hospital Discharge and the Start of Home Health Care in Days, for the 
10 Most Common HHRGs, 2004* 
HHRG  Nonprofit  For-Profit 
HBGJ (Clinical=low, Functional=mod, Service=min)  3.1  3.6 
HCGL (Clinical=mod, Functional=mod, Service=mod)  3.8  4.1 
HBGL (Clinical=low, Functional=mod, Service=mod)  3.9  4.2 
HCGJ (Clinical=mod, Functional=mod, Service=min)  3.2  3.9 
HAFJ (Clinical=min, Functional=low, Service=min)  2.8  3.3 
HBFJ (Clinical=low, Functional=low, Service=min)  2.9  3.6 
HAGJ (Clinical=min, Functional=mod, Service=min)  3.1  3.5 
HCFJ (Clinical=mod, Functional=low, Service=min)  3.1  4.0 
HAGL (Clinical=min, Functional=mod, Service=mod)  3.8  4.1 
HAEJ (Clinical=min, Functional=min, Service=min)  2.5  3.3 
*Note that in this analysis the year is April 1, 2003, to March 31, 2004. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  38  A G E N C Y   C O M M E N T S
  A C K N O W L E D G M E N T S  

This report was prepared under the direction of Jodi Nudelman, 
Regional Inspector General for Evaluation and Inspections in the New 
York regional office.  Other principal Office of Evaluation and 
Inspections staff who contributed include: 
Vincent Greiber, Team Leader 
Natasha Besch-Turner, Program Analyst 
Sonjeya Fitzgerald, Program Analyst 
Nicole Gillette, Program Analyst 
Tricia Davis, Director, Medicare and Medicaid Branch 
Sandy Khoury, Program Specialist 
Technical Assistance  
Barbara Tedesco, Mathematical Statistician 
Scott Horning, Program Analyst 
OEI-02-04-00260  MEDICARE BENEFICIARY ACCESS TO HOME HEALTH AGENCIES: 2004  39