Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

JANET REHNQUIST 

Inspector General 

OCTOBER 2001 

OEI-02-01-00070 

Medicare Home Health Care 

Community Beneficiaries 

2001 
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 

Ellen Vinkey, Project Leader

Christi Macrina, Lead Analyst

Judy Lin

Thomas Zimmermann

HEADQUARTERS 

Tricia Davis, Program Specialist 

Brian Ritchie, Technical Support 

Scott Horning 

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/ 
EXECUTIVE SUMMARY 

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. 

Home Health Community Beneficiaries 2001 i 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. 

Home Health Community Beneficiaries 2001 ii OEI-02-01-00070 
TABLE OF CONTENTS 

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

Home Health Community Beneficiaries 2001 iii OEI-02-01-00070 
INTRODUCTION 

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 patient’s 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 notfor-profit, proprietary, or governmental. 

Medicare will pay for home health care only if it is reasonable and necessary for the 

treatment of the patient’s 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 

Home Health Community Beneficiaries 2001 1 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 OIG’s 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 perbeneficiary 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 agency’s 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. 

Home Health Community Beneficiaries 2001 2 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 

2

“Medicare Home Health Beneficiary Survey,” OEI-02-00-00560 and “The Physician’s Role in Medicare 

Home Health Care: A Follow-up,” OEI-02-00-00620. 

Home Health Community Beneficiaries 2001 3 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 CMS’s 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. 

Home Health Community Beneficiaries 2001 4 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. 

Home Health Community Beneficiaries 2001 5 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. 

Home Health Community Beneficiaries 2001 6 OEI-02-01-00070 
Home Health Agency Sample, 30 Interviews. Using CMS’s 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. 

Home Health Community Beneficiaries 2001 7 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). 

Home Health Community Beneficiaries 2001 8 OEI-02-01-00070 
FINDINGS 

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% 

48% 

Community 

SNF 

Hospital 

Source: National Claims History File, first quarter data 

3

Within 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. 

Home Health Community Beneficiaries 2001 9 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 

Home Health Community Beneficiaries 2001 10 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. 

4

Percentages are based on a 3 month sampling time frame-- January 1, 2000 - March 31, 2000. 

Home Health Community Beneficiaries 2001 11 OEI-02-01-00070 
Figure 3

Ranking of Highest Volume Diagnoses For 

“Community Beneficiaries” By Year

Primary ICD9 

Diagnosis 

Percent 

(rank) 

1997 

Percent 

(rank) 

1998 

Percent 

(rank) 

1999 

Percent 

(rank) 

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. 

5

Based on hospital DRG codes 

Home Health Community Beneficiaries 2001 12 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 

beneficiary’s 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. 

Home Health Community Beneficiaries 2001 13 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 

6

It 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. 

Home Health Community Beneficiaries 2001 14 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 “hospitaldischarged” 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). 

Home Health Community Beneficiaries 2001 15 OEI-02-01-00070 
SUMMARY 

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. 

Home Health Community Beneficiaries 2001 16 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 Physician’s 

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. 

Home Health Community Beneficiaries 2001 17 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 

ESTIMATE 

95% 

CONFIDENCE 

INTERVAL 

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.” 7 

158 63% 56% - 71% 

We asked Medicare beneficiaries who are 

receiving home health services whether they had 

difficulty finding a Medicare home health agency 

to accept them... 

“Community” 

“Hospital-discharged” 

152 

278 

95% 

99% 

92% - 99% 

98% - 100% 

We asked Medicare beneficiaries who are 

receiving home health services whether... any 

agency had refused to accept them. 

“Community” 

“Hospital-discharged” 

141 

253 

96% 

99% 

93% - 99% 

98% - 100% 

7

 This was a “check all that apply” question, therefore, respondent answers will add to over 100 percent 

for this question. 

Home Health Community Beneficiaries 2001 18 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 

Freedom 

Chi-Square Probability Significant? 

The only significant difference 

we found was that “community 

beneficiaries” were slightly 

more likely to say that they did 

not have more than one agency 

to choose from (70% versus 

55%). 

1 7.54* .01 Y 

*Statistically significant at the 95 percent confidence level. 

Home Health Community Beneficiaries 2001 19 OEI-02-01-00070