Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
Medicare Home Health Care 
Community Beneficiaries 
2001 
JANET REHNQUIST 
Inspector General 
OCTOBER 2001 
OEI-02-01-00070  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG) mandated by Public Law 95-452, as 
amended by Public Law 100-504, 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
 Tricia Davis, Program Specialist 
Christi Macrina, Lead Analyst
 Brian Ritchie, Technical Support 
Judy Lin
 Scott Horning 
Thomas Zimmermann
 Linda Moscoe 
Barbara Tedesco,  Mathematical Statistician 
To obtain copies of this report, please call the New York  Regional Office at (212) 264-1998. 
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 identify the population of Medicare home health beneficiaries coming from the 
community, to describe how they access home health care, and to identify any access 
issues. 
BACKGROUND 
The home health care environment has undergone a great deal of change within the last 
few years.  This inspection is part of a larger body of work that the Office of Inspector 
General (OIG) is conducting on Medicare home health services. For this study, we defined 
home health community beneficiaries as those patients that have not been in a hospital 
or skilled nursing facility in the 15 day period prior to the start of their home health care. 
First, we analyzed home health claims data from the Centers for Medicare & Medicaid 
Services (CMS) for each of the first quarters of 1997 through 2000.  Secondly, we 
administered a mail survey to 501 Medicare home health beneficiaries.  Finally, we 
interviewed 60 aging network representatives, 30 home health agencies, 21 physicians, 
and 10 home health hotline representatives for a total of 121 telephone interviews. 
FINDINGS 
About 40 percent of Medicare home health beneficiaries do not have a prior 
hospital or nursing home stay 
Thirty-eight percent of Medicare beneficiaries who started home health care in the year 
2000 had not been in a hospital or skilled nursing facility prior to getting home health care. 
We found variation across States in 2000 with regard to the percentage of Medicare 
community beneficiaries.  For example, 2000 data show that New Jersey had the lowest 
percentage of community beneficiaries, 27 percent of all Medicare home health patients 
in that State, while the percentage in the State of Louisiana was 47 percent. 
Characteristics of community beneficiaries unchanged 
We found only minimal change over time in the characteristics of community 
beneficiaries receiving home health services.  The average age, gender ratio, racial 
distribution, and urban/rural designation all remained relatively constant between 1997 and 
2000.  In addition, the same five diagnoses remained in the top five ranking for home 
health beneficiaries who came from the community between 1997 and 2000.  When 
comparing the diagnoses of community beneficiaries and hospital-discharged patients, 
we found some evidence that community home health patients have more chronic 
conditions. 
i 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  Beneficiaries accessing home health care from the community rely on multiple 
sources to obtain home health services 
All respondents agree that doctors play the most prominent role in connecting community 
beneficiaries to home health services.  However, they add that family or friends also play 
a role and that aging network representatives are sometimes instrumental in informing 
community beneficiaries about the availability of home health services. 
Overall, home health care appears to be accessible 
The majority of physicians (18 of 21) and home health agencies (22 of 30) we spoke with 
report that all of the community beneficiaries who were eligible for Medicare home 
health services were able to get these services during the past year.  In addition, aging 
network representatives did not report any major access problems; however, most of those 
who had contact with Medicare community beneficiaries point out that they generally do 
not know whether or not these beneficiaries eventually get home health services.  While 
we did not find evidence of significant access problems for community beneficiaries, 
some respondents expressed concerns about various aspects of home health care. 
Physicians, home health agencies, and aging network representatives all report anecdotal 
evidence that community beneficiaries with certain medical conditions are unable to 
obtain Medicare home health services.  In most instances, we found the reported 
experiences of  community beneficiaries to be similar to those discharged from the 
hospital into Medicare home health services. 
ii 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  T A B L E   O F   C O N T E N T S  
PAGE

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

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

FINDINGS 
Forty Percent of Beneficiaries Do Not Have a Prior Hospital/Nursing Home Stay  . . . . .  9

Characteristics of Community Beneficiaries Unchanged  . . . . . . . . . . . . . . . . . . . . . .  11

Community Beneficiaries Rely on Multiple Sources to Obtain Services . . . . . . . . . . .  13

Overall, Care Appears to Be Accessible  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

SUMMARY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

APPENDIX

A: Selected List of Other Recent OIG Home Health Inspections  . . . . . . . . . . . . . . . . . . . . . . . 17

B: Confidence Intervals  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

C: Chi-Square Test  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

iii 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  I N T R O D U C T I O N  
PURPOSE 
To identify the population of Medicare home health beneficiaries coming from the 
community, to describe how they access home health care, and to identify any access 
issues. 
BACKGROUND 
The home health care environment has undergone a great deal of change within the last 
few years.  This inspection is part of a larger body of work that the Office of Inspector 
General (OIG) is doing on Medicare home health services, and will add to the body work 
the OIG has done in this area (See Appendix A). 
In particular, this inspection looks at how Medicare beneficiaries gain access to home 
health services in cases where they have not been in the hospital or a skilled nursing 
facility prior to home health care.  An OIG inspection released in July 2001 looked at 
access to home health services for beneficiaries discharged from the hospital to Medicare 
home health agencies.  The scope of that study was limited to hospital beneficiaries for 
methodological reasons.  By relying on a wide variety of data sources, this study seeks to 
gather information on access to home health services for beneficiaries that have not had a 
recent stay in a medical facility. 
Medicare Home Health Care 
Home health services consist of skilled nursing, therapy (physical, occupational and 
speech), and certain related services, including social work and 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 to a home health agency 
(HHA).  These agencies can be free-standing or provider-based and are 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 to be eligible for services, a beneficiary 
must be homebound, be under the care of a physician who has established a plan of care, 
and need at least one of the following intermittent and not full time skilled services: skilled 
nursing care, physical therapy, speech therapy, continued occupational therapy at the start 
of care.  (Occupational therapy alone does not constitute a skilled need.  However, after 
care has begun and other skilled services are discontinued, continued occupational therapy 
is a skilled need.)  Home health aide visits are covered to the extent that the aide services 
support the skilled need of the beneficiary.  There are no 
1 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  specific limits on the number of visits or length of coverage and no co-payments or 
deductibles apply. 
Trends in Medicare Home Health Care 
After a history of increases, Medicare home health expenditures have dropped since 1998. 
Between Fiscal Years 1991 and 1997, Medicare home health care annual expenditures 
rose from $4.7 billion to $17.6 billion.  This was due to an increase in both number of 
beneficiaries receiving home health services and the number of visits they received.  In 
1998, however, spending for home health services began to drop and in Fiscal Year 1999 
was about $8.7 billion.  Furthermore, the average home health length of stay has declined 
from 98 days in 1997 to 58 days in 1999 and the number of beneficiaries served has 
decreased by 22 percent1. 
A number of factors have contributed to the recent decrease in Medicare home health 
spending.  These include interim payment limits created by the Balanced Budget Act of 
1997, as well as several initiatives that were implemented in response to concerns about 
fraud and abuse.  Specifically, in 1996, the Health Insurance Portability and Accountability 
Act substantially increased financial support to the OIGs fraud control efforts. 
Prospective Payment System 
The Balanced Budget Act of 1997 (BBA) required that the existing cost-based home 
health payment system be replaced with a prospective payment system (PPS) of fixed, 
predetermined rates on October 1,  2000.  To allow time for HCFA to develop this 
prospective payment system, the BBA mandated an interim payment system (IPS) to limit 
payments.  The IPS became effective for cost-reporting periods beginning October 1, 
1997, and continued until PPS began on October 1, 2000.  The IPS was intended to 
control the aggregate costs of services provided to beneficiaries in two ways.  First, it 
subjected Medicare HHAs to a new payment limit that was based on an aggregate per-
beneficiary amount. This limit was based on a blend of historical per-user costs for the 
agency and agencies in the region.  It was applied to an agencys total Medicare payments 
and not to specific beneficiaries.  Second, it decreased the per-visit limits from 112 percent 
of the national mean cost per visit to 105 percent of the national median.  Medicare then 
paid HHAs the lower of their actual costs, the aggregate per-beneficiary limit, or the 
aggregate per-visit limit. 
Prior to the implementation of IPS, home health agencies were reimbursed based on what 
it cost to provide services to Medicare beneficiaries.  As a result there was a financial 
incentive for HHAs to provide more services than might be necessary.  Under the new 
prospective payment system, financial incentives have changed somewhat.  Because 
1
Comparisons are between the first 2 months of 1997 and the analogous period in 1999. 
2 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  agencies are now paid fixed, pre-determined rates, there may be an incentive for home 
health agencies to limit the services provided within a given episode of care.  As a result, 
Medicare beneficiaries receiving home health services may be at risk of receiving fewer 
services than in the past. 
Medicare Home Health Beneficiaries From The Community 
For purposes of this study we are defining Medicare home health beneficiaries from the 
community as those patients that have not been in a hospital or skilled nursing facility in 
the 15 day period prior to the start of their home health care.  Beneficiaries who have 
visited a hospital outpatient clinic but have not had an overnight stay will be considered 
from the community since, in many cases, these beneficiaries will not have had the benefit 
of hospital discharge planning services. 
Related Work 
Selected OIG Studies 
The Office of the Inspector General has recently released a number of related inspections. 
Access to Home Health Care After Hospital Discharge 2001, OEI-02-01-00180, was 
released in July 2001.  This inspection assessed access to home health services for 
Medicare beneficiaries discharged from the hospital.  Eighty-nine percent of discharge 
planners report that under the prospective payment system they can place all of their 
Medicare patients who need care in home health agencies, however, some patients 
experience delays associated with certain medical conditions or service needs. 
Additionally, we found that, overall, the availability of home health services seems to be 
sufficient, even though the number of agencies has decreased.  In conclusion, little 
evidence was found that the new prospective payment system is limiting beneficiaries 
access to care.  Similar inspections were conducted by the OIG in 2000 and 1999, at that 
time the interim payment system was in effect.  Findings related to beneficiary access to 
home health services were similar.  In addition, the OIG recently released two studies that 
included surveys of beneficiary and physician perspectives on Medicare home health 
services.2 
Earlier OIG work on Medicare home health services includes two other related studies, 
both of which addressed the adequacy of home health services.  There have been some 
concerns about the adequacy of services in light of recent significant decreases in 
Medicare home health care expenditures.  In response to these concerns, the OIG 
evaluated hospital re-admission and emergency visit rates and looked at home health 
agency survey and certification deficiencies.  Data from these studies indicate that there 
2Medicare Home Health Beneficiary Survey, OEI-02-00-00560 and The Physicians Role in Medicare 
Home Health Care: A Follow-up, OEI-02-00-00620. 
3 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  have not been significant increases in re-admissions or emergency room visits for home 
health care patients.  In addition, we found that, overall, home health agency deficiencies 
increased 26 percent between the first 6 months of 1997 and the first 6 months of 1999, 
but that there is no single explanation for this growth. 
Other Work 
Several other studies have examined access to home health care for Medicare 
beneficiaries, although, as noted earlier, none that we found focused exclusively on 
beneficiaries from the community.  The tendency has been toward gathering information 
about beneficiaries who start home health after having been in a medical facility such as a 
hospital. 
A 1999 report by the General Accounting Office found that although about 14 percent of 
HHAs have closed since 1997, there is little evidence that appropriate access to care has 
been impaired.  The study found that closures occurred most frequently in areas that had 
experienced considerable growth. 
Also in 1999,  a two-part study released by George Washington University (GWU) 
entitled, An Examination of Medicare Home Health Services: A Descriptive Study of the 
Effects of the Balanced Budget Act Interim Payment System on Access to and Quality of 
Care, found that the majority of HHAs participating in the study in eight States altered 
their case mix and/or practice patterns to conform utilization to IPS reimbursement.  The 
second phase of the GWU study found hospital discharge planners reporting more 
difficulty in obtaining home health services for Medicare beneficiaries.  Most attributed 
these increases to changes in admitting and practice patterns by HHAs, changes in staffing 
patterns, or the effects of agency closures in their service area. 
Similarly, the 1999 study sponsored by the Medicare Payment Advisory Commission 
contained survey information from HHAs and entailed panel discussion information on the 
issue of access with health professionals, attorneys, and advocates.  The report found that 
many HHAs have adopted new admission and discharge practices since IPS. 
Finally, two 1999 reports based on early data from CMSs Per-Episode Home Health 
Prospective Payment Demonstration suggest that prospective payment can lower 
Medicare home health costs without harming quality of care.  The first report found no 
evidence that quality of care as measured by patient outcomes was adversely affected. 
The second report concluded that although the per-episode prospective payment 
demonstration substantially reduced home visits, it did not suggest that quality of care was 
affected. 
4 
Home Health Community Beneficiaries 2001  OEI-02-01-00070   METHODOLOGY 
We obtained data for this study from a number of  sources.  We analyzed CMS claims 
data and administered surveys to a number of different respondent groups. 
Analysis of Claims 
Data Analysis Universe Selection 
We selected all CMS home health claims for each of the first quarters of 1997, 1998, 
1999, and 2000.  One hundred percent of final clams were used for 1997-2000.  These 
claims were cross matched against hospital and skilled nursing facility claims to identify 
Medicare beneficiaries who had a stay in either of these facilities within the 15 day period 
preceding the start of their home health services.  Those beneficiaries who did not have a 
match were coded as from the community. 
The universe was limited to the first episode for each beneficiary for a given year, making 
the unit of analysis a beneficiary.  For the purposes of this data analysis, a new episode is 
defined as beginning when a gap of over 30 days exists between an HHA claim service 
from date and the prior claims service thru date for a given beneficiary.  In addition, if a 
beneficiary had both a hospital stay and a SNF stay within the 15 day period preceding 
their HHA episode and the SNF stay was more recent, they were coded as a beneficiary 
with a recent SNF stay.  Therefore, a beneficiary could only be counted one time in any 
given year, however, they could show up in more than 1 year. 
Data Analysis 
Selection of this sample enabled us to determine the current proportion of Medicare 
beneficiaries from the community-- those admitted to home health services without a 
recent hospitalization or SNF stay.  Using these data we also analyzed whether the 
proportion of community beneficiaries differs across States.  Finally, these data were 
analyzed to determine what proportion of home health beneficiaries came from the 
community in an earlier period (first quarter of 1997). 
In addition, we used HHA claims data, including ICD-9 diagnosis data, to a build a profile 
of Medicare home health patients who come from the community.  Specifically, we looked 
at the most common home health diagnoses, age, sex, race, and urban-rural designation. 
Using CMS National Claims Data, we compared this profile to previous years to ascertain 
what, if any, change had occurred.  We also compared the diagnoses of community 
patients to those discharged from the hospital to home health services.  Diagnosis related 
groups (DRGs) were used as a proxy for diagnosis for hospital-discharged patients. 
5 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  The first quarter of 1997 was chosen as the earliest comparison period for our data 
analysis because the interim payment system (IPS) was not yet in effect.  At that time 
providers were being paid on a cost basis, as they had been for many years, as opposed to 
being reimbursed based on fixed pre-determined rates.  It should be noted that the latest 
comparison period we look at, first quarter of 1999, reflects data associated with a fully 
implemented interim payment system, however, it pre-dates the October 1, 2000 
implementation of the prospective payment system (PPS). 
Beneficiary Sample for Mail Survey 
Using the CMS National Claims History File, all Medicare beneficiary HHA claims for 
services started within the period January 7-12, 2001, were identified.  A random sample 
of 700 beneficiaries was selected.  Since this was a random sample, we expected the 
proportion of respondents who received home health services without a recent 
hospitalization or SNF stay to be approximately the same proportion as it is in the universe 
at large.  We received completed mail questionnaires from 501 beneficiaries in all.  This 
was the same sample we used in a related OIG inspection entitled Medicare Beneficiary 
Home Health Survey, OEI-02-00-00560. 
Sample Selection For Telephone Interviews 
We chose a purposive sample of the 10 States with the highest number of home health 
beneficiaries coming from the community.  In the year 2000, 52 percent of the population 
of community beneficiaries resided in these 10 States.  In addition, these States provide 
representation across different geographic regions and include States with long-standing 
and active aging programs as well.  The 10 States are: California, Florida, Illinois, 
Louisiana, Massachusetts, Michigan, New York, North Carolina, Pennsylvania, and 
Texas.  With the exception of the beneficiary mail survey, all respondents were from these 
10 States.  We administered telephone surveys to each of the respondent groups identified 
below.  Telephone interviews were conducted during April and May of 2001. 
Respondents From 10 State Sample 
Physician Sample, 21 Interviews.  We pulled a simple random sample of physicians 
within the 10 States.  Using the CMS National Claims History File to identify Medicare 
beneficiary HHA claims for services provided during the last 6 months of 2000, we 
eliminated beneficiaries whose records showed a hospital or SNF stay within the 15 day 
period prior to their home health services, and identified  physicians who signed a home 
health plan of care associated with the remaining HHA claims.  We then selected a random 
sample of physicians from those who signed 2 or more home health plans of care during 
the last 6 months of 2000. 
6 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  Home Health Agency Sample, 30 Interviews.  Using CMSs OSCAR and National 
Claims History data, we pulled a simple random sample of Medicare home health agencies 
that was large enough to ensure that we were able to hold discussions with 30 agencies. 
All agencies in our 10 State sample that had submitted claims in the last 6 months of 2000 
were included in our universe. 
State Unit on Aging (SUA) Sample, 10 Interviews.  We identified and interviewed the 
State Unit on Aging director in each of the 10 States.  SUA directors, who operate at the 
State level, were asked questions about emerging trends affecting Medicare beneficiaries 
seeking home health services. 
State Health Insurance Program (SHIP) Sample, 10 Interviews.  We identified and 
interviewed the State Health Insurance coordinator  (commonly referred to as SHIP 
coordinators) in each of the 10 States.  SHIP co-ordinators, who operate at the State 
level, were also asked questions about emerging trends affecting Medicare beneficiaries 
seeking home health services.  The SHIPs are staffed with volunteers whose function it is 
to provide guidance on health insurance options for older Americans. 
Area Agencies on Aging (AAA) Sample, 20 Interviews.  In each of the 10 States we 
identified and  interviewed two AAA representatives.  These respondents were identified 
by State-level program directors.  Because these local agencies are known to have a 
significant amount of hands-on experience with Medicare beneficiaries, we relied on them 
to provide information on the  actual experiences of Medicare beneficiaries attempting to 
access Medicare home health services from the community. 
Local State Health Insurance Program (Local SHIP) Sample, 20 Interviews.  In each 
of the 10 States we identified and  interviewed two local SHIP representatives.  These 
respondents were identified by State-level SHIP co-ordinators.  Because these agencies 
are known to have a significant amount of hands-on experience with Medicare 
beneficiaries, we relied on them to provide information on the  actual experiences of 
Medicare beneficiaries attempting to access Medicare home health services from the 
community. 
State Home Health Hotline Sample, 10 Interviews.  We identified the State home 
health hotline representative in each of the 10 States.  Each State is required to have a 
home health hotline set up to handle questions and complaints.  The hotline provides 
services ranging from home health agency referrals to investigation of complaints against 
an agency.  We asked hotline representatives general questions seeking to gain any 
knowledge they might have pertinent to community beneficiary access to home health 
services.  In total we conducted 121 telephone interviews. 
7 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  Limitations 
For purposes of our trend analyses, we used CMS claims data for a 3 month sample time 
frame (January- March) to project to the balance of the year.  To the extent that claims in 
the first 3 months of a given year differed substantially from the balance of the year, they 
are not represented in our analyses.  In addition, it should be noted that this study focuses 
exclusively on Medicare home health services provided to fee-for-service Medicare 
patients and, therefore, does not address the experiences of Medicare home health patients 
who are enrolled in a Medicare + Choice managed care plan (approximately 15 percent of 
the Medicare beneficiary population). 
8 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  F I N D I N G S  
About 40 percent of Medicare home health beneficiaries do 
not have a prior hospital or nursing home stay 
We found that 38 percent of Medicare beneficiaries who started home health services in 
the year 2000 had not been in a hospital or skilled nursing facility prior to getting home 
health care3.  (See Figure 1 below.)  One characteristic that differentiates these patients, 
who come directly from the community, is that they do not have the benefit of discharge 
planning services.  This difference can have a number of impacts.  First, community home 
health beneficiaries often have less access to information about the Medicare services for 
which they may be eligible.  Additionally, they may not know what process they need to 
follow to obtain services.  Finally, they are likely to be without the benefit of a home 
health agency referral list, which most discharge planners are required to provide to 
prospective home health patients. 
Figure 1 

Proportion of Medicare Beneficiaries in Home Health Care

by Referral Source - 2000 

38% 
14%  Community 
SNF 
Hospital 
48% 
Source: National Claims History File, first quarter data 
3Within the 15 day period prior to the start of their home health services.  Percentages are based on a 3 
month sampling time frame-- January 1, 2000 - March 31, 2000. Projection to the full year is based on the 
assumption that claims during the first 3 months are similar those submitted throughout the balance of the year. 
9 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  The total number of beneficiaries who received home health services in the first quarter of 
1997 was 848,990.  In the first quarter of 2000 this number was 733,410.  During this 
period the proportion of Medicare community beneficiaries decreased by a small 
amount.  We found that in the first quarter of 1997, 41 percent of Medicare home health 
patients had not been in the hospital or a skilled nursing facility prior to starting services. 
In the first quarter of  2000, this number had dropped slightly to 38 percent. 
Percentage of community home health beneficiaries varies across States 
There is variation across States in 2000 with regard to the percentage of Medicare home 
health patients that begin services without a prior hospital or skilled nursing facility stay, 
as Figure 2 below indicates. 
Figure 2

Variation in the Proportion of 

Community Home Health Beneficiaries by States in 2000

27 - 33% Community beneficiaries 
34 - 40% Community beneficiaries 
41 - 47% Community beneficiaries 
Source: National Claims History File, First Quarter Data 
10 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  For example, New Jersey had the lowest percentage of  community beneficiaries-- 27 
percent of  all Medicare home health patients in that State4, while the percentage of 
community beneficiaries in the State of Louisiana was 47 percent.  The range between 
the States with the highest and lowest percentages of community beneficiaries is similar 
in earlier years.  Medicare claims data show that in 1997 the lowest percentage was 27 and 
the highest was 53 percent.  It is important to keep in mind that there are many factors 
that may influence these statistics.  For example, the extent to which community-based 
aging programs are available in a given area may affect the proportion of community 
home health beneficiaries.  Other factors like the number of home health agencies and 
skilled nursing facilities in a given State may affect the proportion of community 
beneficiaries as well. 
Characteristics of community beneficiaries unchanged 
We found only minimal change over time in the characteristics of community 
beneficiaries receiving home health services.  In 1997, the average age of a community 
home health beneficiary was 78.  In 2000, the average age was 79.  Sixty-seven percent of 
community beneficiaries were women in 1997, while 33 percent were men.  This gender 
ratio remained constant in 2000. In addition, the racial distribution of community 
beneficiaries changed very little between 1997 and 2000. 
There has also been little change in the geographic distribution of community 
beneficiaries.  In 1997, 74 percent lived in an urban area, while 26 percent lived in a rural 
area.  In 2000, one percent more community beneficiaries lived in an urban area. 
Top five diagnoses for community home health beneficiaries remain the same 
As shown in Figure 3 on the next page, the same five diagnoses remained in the top five 
ranking for home health beneficiaries who came from the community between 1997 and 
2000.  However, the ranking of these diagnoses changed somewhat beginning in 1999. 
Proportionately more community beneficiaries with chronic ulcer of the skin received 
home health care in 1999 and 2000.  This may indicate a recent increase in access for 
patients requiring wound care.  The top five diagnoses in Figure 3 represent approximately 
25 percent of the community beneficiary population. 
4Percentages are based on a 3 month sampling time frame-- January 1, 2000 - March 31, 2000. 
11 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  Figure 3

Ranking of Highest Volume Diagnoses For 

Community Beneficiaries By Year

Primary ICD9  Percent  Percent  Percent  Percent 
Diagnosis  (rank)  (rank)  (rank)  (rank) 
1997  1998  1999  2000 
250- Diabetes  8.6  (1)  7.6  (1)  6.9  (1)  6.2  (1) 
401- Essential hypertension  7.7  (2)  6.2  (2)  5.5  (3)  5.3  (3) 
428- Heart failure  5.3  (3)  5.0  (3)  4.7  (4)  4.6  (4) 
707- Chronic ulcer of the skin  3.6  (4)  4.6  (4)  5.7  (2)  5.6  (2) 
715- Osteoarthrosis  3.2  (5)  3.3  (5)  3.2  (5)  3.6  (5) 
Source: National Claims History File, first quarter data 
Some evidence that community home health beneficiaries have more chronic 
conditions than hospital-discharged patients 
In order to determine if community home health beneficiaries differ from beneficiaries 
who come from the hospital, we compared the diagnoses of home health beneficiaries 
discharged from the hospital with the diagnoses of beneficiaries who came into home 
health care directly from the community.  For the year 2000, we found the top five 
diagnoses5 for hospital-discharged home health beneficiaries were: coronary bypass, 
respiratory infections and inflammations, specific cerebrovascular disorders, major small 
and large bowel procedures, and chronic obstructive pulmonary disease.  When comparing 
these diagnoses to those of home health beneficiaries who came directly from the 
community, we find some evidence that, overall, community home health beneficiaries 
have more chronic conditions.  For example, the top five diagnoses for community home 
health beneficiaries include chronic conditions such as diabetes, essential hypertension, 
and chronic ulcer of the skin.  In contrast, hospital diagnoses such as coronary bypass, 
specific cerebrovascular disorders, and major small and large bowel procedures are more 
acute in nature.  Supporting this, 19 of the 30 home health agencies we spoke with report 
that their patients who come from the hospital are sicker than those who come from the 
community. 
5Based on hospital DRG codes 
12 
Home Health Community Beneficiaries 2001  OEI-02-01-00070 Beneficiaries accessing home health care from the 
community rely on multiple sources to obtain home health 
services 
Doctors play primary role 
All respondents agree that doctors play the most prominent role in connecting community 
beneficiaries to home health services.  When we asked community beneficiaries how 
they found out about the home health agency they are using, the most common response 
was through my doctor.  Similarly, 46 out of 60 aging network representatives we 
interviewed name physicians as the source that usually refers beneficiaries for services. 
Fifteen out of 21 physicians that we spoke with also state that they most often inform 
community home health beneficiaries about the availability of home health services. 
Home health agencies agree that community beneficiaries most often find out about 
home health services through their physician.  However, they add that family or friends 
also play a role and that aging network representatives are sometimes instrumental in 
informing community beneficiaries about the availability of home health services. 
Aging network also provides assistance 
Over half (37 of 60) of State and local aging network representatives that we spoke with 
report that community beneficiaries contact their office for help in obtaining Medicare 
home health services.  Of those that are contacted, 76 percent report that they provide 
assistance either sometimes or frequently.  During a recent 6 month period, aging network 
representatives report receiving, on average, 55 telephone calls from community 
beneficiaries needing home health services.  When contacted by community 
beneficiaries, the aging network representatives generally conduct an assessment of the 
beneficiarys needs.  Sometimes they assist them in locating a home health agency, refer 
them back to their physician, or give them general information about home health. 
Overall, home health care appears to be accessible 
Most physicians (18 of 21) report that all of their patients who both need and are eligible 
for Medicare home health services are able to get that care.  The other physicians say that 
a few of their patients could not get care.  The majority of home health agencies (22 of 30) 
we spoke to told us they were able to serve all patients who both needed and were eligible 
for Medicare home health care.  Most of those who could not serve all patients noted that 
the number who could not be served has not changed in recent years.  In addition, aging 
network representatives did not report any major access problems. 
13 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  However, most aging network representatives who had contact with Medicare 
community beneficiaries point out that they generally do not know whether or not these 
beneficiaries eventually get home health services. 
While we did not find evidence of significant access problems for community 
beneficiaries, some respondents expressed concerns about various aspects of home health 
care.  Those concerns centered around such things as medical conditions, Medicare 
eligibility and coverage, and home health agency staffing shortages.  Some physicians  (7 
of 21) report anecdotal evidence that community beneficiaries with medical conditions 
such as diabetes, wound care, and Alzheimer disease are unable to obtain Medicare home 
health services.  About a third of the home health agencies we spoke with (12 of 30) also 
report that there are some services they are unable to provide to Medicare patients and 
approximately a third of the aging network representatives (23 of 60) report that there are 
some medical conditions that affect the ability of community beneficiaries to get 
services.6  Additionally, some physicians, home health agencies and aging network 
representatives report other factors that affect access.  For example, six home health 
agencies report that staffing issues sometimes affect their ability to provide services. 
Examples of other obstacles aging network representatives (30 of 60) mention include: 
lack of knowledge about Medicare home health services; home health agency staffing 
shortages; Medicare reimbursement policies; and physicians being more cautious in 
ordering Medicare home health care for patients. 
When asked what happens to community beneficiaries who are unable to get home 
health services, physicians respond that patients go without care, go into the hospital, or 
are visited at home by their physician without having the benefit of Medicare home health 
services.  Home health agencies agree that community beneficiaries who cannot find 
home care most often go without services or go into a nursing home. Some local aging 
network representatives point out that a portion of  community beneficiaries are able to 
find alternatives to Medicare home health services through charitable or community grant 
programs. 
Thirteen of the 21 physicians we spoke with report a change in access over the past 5 
years for community beneficiaries.  Five of these physicians note that access has 
improved.  Comments from the remaining eight physicians include the following: that 
access has decreased because of tightened Medicare eligibility requirements, visits are 
shorter than they used to be, and fewer home health services are being provided to 
Medicare beneficiaries.  The remaining eight physicians said there had been no change in 
access for community beneficiaries over the past 5 years. 
In most instances we found the reported experiences of community beneficiaries to be 
similar to those discharged from the hospital into Medicare home health services.  We 
asked 501 Medicare beneficiaries who are receiving home health services whether they 
6It should be noted that patients with chronic conditions are not eligible for Medicare home health care if 
they do not meet the skilled need eligibility criteria. 
14 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  had difficulty finding a Medicare home health agency to accept them and whether any 
agency had refused to accept them.  Over 95 percent of both community and hospital-
discharged beneficiaries say they experienced no problems in either regard.  We also 
asked if the agency providing their services was their first choice.  Again, the majority said 
yes and there was no significant difference in the reported experiences of community 
and hospital-discharged beneficiaries.  The only significant difference we found was that 
more community beneficiaries report that they only had one agency to choose from (70 
percent versus 55 percent). 
15 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  S U M M A R Y  
We found that the characteristics of  community home health beneficiaries, including the 
most common diagnoses, have generally remained the same over the course of the last few 
years.  There is some evidence that community beneficiaries have more chronic 
conditions than hospital-discharged patients.  Through reliance on their physicians, family, 
and the aging network, they appear to be getting access to Medicare home health care, 
however, a minority of respondents expressed some concerns such as barriers for 
Medicare patients with certain medical conditions, confusion regarding Medicare eligibility 
and coverage, and home health agency staffing shortages.  In most instances, we found the 
reported experiences of community beneficiaries to be similar to those discharged from 
the hospital into home health services. 
16 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  APPENDIX A 
Selected List of Recent Office of Inspector General 
Home Health Inspections 
Office of Inspector General, US Department of Health and Human Services, The Physicians 
Role in Medicare Home Health 2001, OEI-02-00-00620, August, 2001. 
Office of Inspector General, US Department of Health and Human Services,Medicare 
Beneficiary Experiences with Home Health,  OEI-02-00-00560, July, 2001. 
Office of Inspector General, US Department of Health and Human Services, Access to Home 
Health Care After Hospital Discharge 2001, OEI-02-01-00180, July, 2001. 
Office of Inspector General, US Department of Health and Human Services, Adequacy of Home 
Health Services: Hospital Re-Admissions and Emergency Room Visits, OEI-02-99-00531, 
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. 
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 
Beneficiary Access to Home Health Agencies, OEI-02-99-00530, October 1999. 
17 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  APPENDIX B 
Confidence Intervals For Key Findings 
We calculated confidence intervals for key findings in the beneficiary survey.  The point estimate 
and 95 percent confidence interval are given for each of the following: 
KEY FINDINGS  N  POINT  95% 
ESTIMATE  CONFIDENCE 
INTERVAL 
When we asked community beneficiaries how 
they found out about the home health agency they  158  63%  56% - 71% 
are using, the most common response was 
through my doctor. 7 
We asked Medicare beneficiaries who are 
receiving home health services whether they had 
difficulty finding a Medicare home health agency 
to accept them... 
Community  152  95%  92% - 99% 
Hospital-discharged  278  99%  98% - 100% 
We asked Medicare beneficiaries who are 
receiving home health services whether... any 
agency had refused to accept them. 
Community  141  96%  93% - 99% 
Hospital-discharged  253  99%  98% - 100% 
7 This was a check all that apply question, therefore, respondent answers will add to over 100 percent 
for this question. 
18 
Home Health Community Beneficiaries 2001  OEI-02-01-00070  APPENDIX C 
Chi-Square Test for 
Community/Hospital-Discharged Beneficiaries 
We computed Chi-square values for differences between the experiences of community and 
hospital discharged beneficiaries who gained access to home health services.  All variables were 
analyzed at the 95 percent confidence level. 
VARIABLE  Degrees of  Chi-Square  Probability  Significant? 
Freedom 
The only significant difference 
we found was that community  1  7.54*  .01  Y 
beneficiaries were slightly 
more likely to say that they did 
not have more than one agency 
to choose from (70% versus 
55%). 
*Statistically significant at the 95 percent confidence level. 
19 
Home Health Community Beneficiaries 2001  OEI-02-01-00070