Department of Health and Human Services


OFFICE OF 

INSPECTOR GENERAL 

EFFECT OF THE HOME HEALTH 


PROSPECTIVE PAYMENT SYSTEM 


ON THE QUALITY OF HOME 


HEALTH CARE


Daniel R. Levinson


Inspector General 


January 2006


OEI-01-04-00160

 Services 

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 in order to reduce waste, abuse, and 

mismanagement and to promote economy and efficiency throughout HHS. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) conducts management and program 

evaluations (called inspections) that focus on issues of concern to HHS, Congress, and 

the public. The findings and recommendations contained in the inspections generate 

rapid, accurate, and up-to-date information on the efficiency, vulnerability, and 

effectiveness of departmental programs. OEI also oversees State Medicaid Fraud 

Control units which investigate and prosecute fraud and patient abuse in the Medicaid 

program. 

Office of Investigations 

The 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. 
ΔEXE CUTIVE S U MMAR Y EXECUTIVE SUMMAR INTRODU C TION Y EXECUTIVE SUMMAR Y 

OBJECTIVE 

To determine how hospital readmission and emergency department visit 

rates for Medicare beneficiaries discharged from hospitals to home 

health care have changed since implementation of the home health 

prospective payment system (PPS). 

BACKGROUND 

As a result of the Balanced Budget Act of 1997, the Centers for 

Medicare & Medicaid Services (CMS) implemented the PPS for 

Medicare home health care services in 2000. PPS was mandated in 

response to rapidly growing home health spending that had resulted 

from financial incentives under the previous cost-based system. Under 

the PPS, home health agencies receive a unit of payment that reflects a 

national 60-day episode rate with applicable adjustments. That 

payment is designed to reflect the clinical and functional severity of a 

beneficiary’s condition. 

The payment for an episode of care under the PPS can create a financial 

incentive to limit visits to patients, thus raising questions about how 

often home health agency staff check the health conditions of their 

patients. CMS, the Government Accountability Office, and the 

Medicare Payment Advisory Commission have all stressed the need to 

monitor outcomes of care following the implementation of the PPS 

because of this incentive. Increases in the rates of hospital readmission 

and emergency department visits are indicators of poor quality of care. 

We used Medicare claims data and data on beneficiaries’ clinical and 

functional characteristics to measure the rate of readmissions to 

hospitals and the rate of visits to hospital emergency departments. We 

analyzed these data for a consistent 3-month period (April–June) for 

2000 (which served as the baseline), 2001, 2002, and 2003. 

FINDINGS 

Hospital readmission rates remain unchanged. Overall hospital 

readmission rates for Medicare home health beneficiaries discharged 

from hospitals remained at 47 percent from 2000 through 2003. Our 

analysis showed no consistent trend in hospital readmission rates for 

beneficiaries with at-risk diagnoses, although there were small 

increases in readmission rates for beneficiaries with renal failure, 

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EXE CUTIVE S U MMAR Y 

multiple sclerosis, and pulmonary disease. Readmission rates due to 

preventable adverse events remained low. 

Minimal changes in emergency department visits. The overall rate of 

emergency department visits for Medicare home health beneficiaries 

discharged from hospitals increased slightly, from 29 to 30 percent, from 

2000 through 2003. Our analysis showed a slight increase in rates of 

emergency department visits for beneficiaries with at-risk diagnoses, 

including renal failure and heart failure. The rates of emergency 

department visits due to preventable adverse events remained low, at 

less than 1 percent. 

CONCLUSION 

Our analysis showed little overall change in hospital readmission rates 

and emergency department visit rates following the implementation of 

the home health PPS. This result suggests that the change in payment 

systems has not led to increased use of hospital and emergency 

department services. 

At the same time, however, our analysis shows that beneficiaries with 

certain diagnoses, such as renal failure, pulmonary disease, and 

multiple sclerosis, had higher hospital readmission rates and more 

visits to emergency departments than other beneficiaries. 

Consequently, it would be prudent to continue to monitor indicators of 

quality in home health care. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

In its comments to the draft report, CMS agreed with our findings of 

little change in hospital readmission and emergency department visit 

rates following the implementation of PPS. The agency also agreed 

with our observation that it would be prudent to continue monitoring 

indicators of quality in home health care. CMS stated that the results 

presented in the report will assist it in measuring and reporting on the 

performance of home health care. 

We clarified the report background based on technical comments that 

CMS provided. The full text of CMS’s comments is included as 

Appendix A. 

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Δ T ABLE OF CONTENTS 

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

INTR O D U C T I ON ........................................... 1

FINDI NGS ................................................. 5

Hospital readmission rates unchanged ...................... 5

Minimal changes in emergency department visit rates.......... 7

CON C L U SION ............................................. 9

ENDN OTE S ............................................... 10

APPENDI X A : A G ENCY COMMENTS ..................... 12

ACKN O W LEDGMENTS .................................... 15
ΔINTROD UCT ION INTRODU C TION 

OBJECTIVE 

To determine how hospital readmission and emergency department visit 

rates for Medicare beneficiaries discharged from hospitals to home 

health care have changed since implementation of the home health 

prospective payment system (PPS). 

BACKGROUND 

The Home Health Prospective Payment System 

Prior to 1997, Medicare paid for home health services under a 

cost-based system. That payment system created an incentive for home 

health agencies (HHA) to increase their Medicare revenues by 

delivering more services than necessary. From 1990 to 1997, Medicare’s 

spending on home health services rose from $3.7 billion to $16.7 billion, 

and the number of HHAs increased from 5,730 to 10,807. In 1997, 

almost 3.6 million beneficiaries received home health services.1 

In response to this rapidly growing home health spending, Congress 

enacted the Balanced Budget Act of 1997 (BBA),2 which required the 

Centers for Medicare & Medicaid Services (CMS) to implement a PPS 

for home health services by October 1, 1999. In 1999, Congress passed 

the Omnibus Consolidated and Emergency Supplemental 

Appropriations Act, delaying the implementation of home health PPS 

until October 1, 2000. The BBA also called for the implementation of an 

interim payment system (IPS), which revised the payment limits on 

home health services as a transition step to the new PPS. Beginning in 

October 1997, the IPS subjected Medicare HHAs to a new payment limit 

that was based on an aggregate per-beneficiary amount. This cap 

applied to an agency’s total Medicare payments and did not limit 

payments for specific beneficiaries. 

After implementation of the IPS, Medicare’s spending on home health 

services fell to $7.9 billion in 1999.3 By that same year, the number of 

HHAs decreased to about 7,830,4 and the number of beneficiaries 

receiving these services fell to 2.7 million.5 

The home health PPS replaced the IPS on October 1, 2000. Under the 

PPS, agencies receive a payment for each 60-day episode of care. For 

calendar year 2005, the base payment for each episode is $2,264.28. 

That base payment is adjusted by placing the beneficiary into 1 of 80 

Home Health Resource Groups (HHRG), which reflect the clinical and 

functional severity of a beneficiary’s condition and recent use of other 

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INTROD UCT ION 

health services. In addition, the base rate is affected by wage 

adjustment factors (wage index) to account for area wage differences. 

The Outcome and Assessment Information Set 

The Outcome and Assessment Information Set (OASIS) is a clinical 

assessment tool that evaluates patients and measures outcomes 

through the use of 79 demographic, clinical, and functional data items. 

A registered nurse or rehabilitation therapy skilled professional 

conducts a comprehensive assessment of a beneficiary receiving home 

health services when specific events occur and at the end of each 60-day 

cycle of home health services. This assessment includes collection of 

OASIS data.6,7 

The OASIS serves two major purposes. First, the PPS uses the OASIS 

data to determine into which HHRG a beneficiary falls. Second, the 

OASIS provides a mechanism to monitor quality. 

The OASIS captures information regarding hospital readmissions, visits 

to emergency departments, and adverse events that could cause a 

hospital readmission or emergency department visit. Adverse events 

include: (1) improper medication administration or side effects, toxicity, 

and anaphylaxis; (2) injury caused by a fall or accident at home; 

(3) wound infection, deteriorating wound status, and new lesion/ulcer; 

and (4) hypo/hyperglycemia or diabetes out of control. 

Earlier Reports on the Effect of Home Health Payments on the Quality of 

Care 

In 1999, OIG assessed how the IPS affected beneficiaries’ access to 

home health care following discharge from hospitals. In that report, 

discharge planners volunteered concerns that some beneficiaries may 

not have received the care they needed under the IPS.8 

In response to those concerns, OIG assessed the impact of the IPS on 

readmissions and emergency department visits. That report, released 

in 2000, found that these rates had decreased since implementation of 

the IPS in 1999.9 

Concerns About Implementation of the Home Health PPS and Quality of 

Care 

On its Home Health Compare Web site, CMS states that even with good 

home health care, beneficiaries may require readmission or an 

emergency department visit.10 Home Health Compare also advises 

beneficiaries that “some inpatient hospital care [and emergency care] 

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INTROD UCT ION 

may be avoided if the home health staff is doing a good job at checking 

your health condition at each visit to detect problems early.” 

The home health PPS creates a financial incentive to limit visits, thus 

raising questions about how often HHA staff check the health conditions 

of their patients. Increases in readmission rates or emergency 

department visits could indicate poor quality care. The incentive 

created by the PPS calls for a system to ensure that beneficiaries receive 

adequate visits. 

CMS, the Government Accountability Office, and the Medicare Payment 

Advisory Commission (MedPAC) have stated that monitoring outcomes 

of care following implementation of the PPS is important because of 

incentives in the payment system to lower the level of services 

delivered.11 MedPAC has also cautioned that the ambiguous definition 

of the home health benefit, along with the 60-day episode of care and 

broad range of services offered, can lead to greater opportunities for 

restricting care in home health than in other care settings. 

METHODOLOGY 

We based our analysis on a database created from the OASIS and the 

National Claims History (NCH) file. The NCH file incorporates 

100 percent of home health claims, 100 percent of inpatient hospital 

claims, and 100 percent of outpatient hospital claims. 

We identified all beneficiaries who began a new home health episode 

during a consistent 3-month period (April 1 through June 30) for each 

year (2000 through 2003). The 2000 data serve as our pre-PPS baseline. 

To qualify as a new home health episode, beneficiaries must have had 

no home health services billed to Medicare in the 60 days prior to the 

episode start date. After we identified these episodes, we used inpatient 

claims to limit the dataset to beneficiaries who had been discharged 

from hospitals within the 30 days prior to starting home health care. 

For each episode, we used claims data to determine if the beneficiary 

had a readmission or an emergency department visit. We considered a 

readmission or emergency department visit to be associated with the 

episode if (1) it occurred during the initial 60-day home health episode 

of care, or (2) it occurred within 30 days after the initial episode. We 

extended the length of time to capture any beneficiary whose hospital 

readmission or emergency department visit occurred in the month 

immediately following the conclusion of his or her home health services. 

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We analyzed only the first readmission and/or emergency department 

visit for each home health episode. However, we calculated the 

readmission rate separately from the emergency department visit rate. 

Thus, if a beneficiary had both a readmission and an emergency 

department visit, we included each in the rate calculations. 

For each year, we calculated hospital readmission and emergency 

department rates by dividing the number of beneficiaries who were 

discharged from the hospital and received home health services and who 

were readmitted to hospitals or visited emergency departments by the 

total number of beneficiaries receiving home health services. 

We identified the primary diagnosis associated with each readmission 

and emergency department visit. We then calculated the percentage of 

those beneficiaries who had at-risk diagnoses12 and the percentage who 

were readmitted and/or visited an emergency department due to 

preventable adverse events. To enable us to compare over time, we used 

the same International Classification of Diseases (ICD-9) and Diagnosis 

Related Groups (DRG) codes used in the 2000 OIG inspection. That 

report looked at numerous studies that analyzed the effects of the IPS 

and the adequacy of home health care to identify diagnoses and patient 

types that could have been at risk of receiving inadequate care.13 

To parallel our previous inspection, we limited our analysis to Medicare 

beneficiaries who received home health services following 

hospitalization. During the period of our analysis, this population 

ranged from 64 to 66 percent of the universe of beneficiaries receiving 

home health services.14 Medicare has no prior hospitalization 

requirement for home health services, and beneficiaries come from 

nursing homes and the community as well as from hospitals. 

We also limited our analysis to describing how the rates of hospital 

readmission and emergency department visits for Medicare 

beneficiaries who received home health services changed since 

implementation of the PPS. Our analysis does not address the cause of 

any changes. 

We conducted this review in accordance with the “Quality Standards for 

Inspections” issued by the President’s Council on Integrity and 

Efficiency and the Executive Council on Integrity and Efficiency. 

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IPS PPS 

IPS PPS 

Δ FINDINGS

Overall hospital readmission rates for Medicare 

beneficiaries discharged from hospitals who 

Hospital Readmission Rates 

Remained Unchanged 

received home health services remained 

unchanged from 2000 to 2003. In 2000, hospital readmission rates 

under IPS were about 47 percent. The readmission rates held steady 

from 2001 to 2003 after PPS replaced IPS. (See Table 1.) 

Table 1 

Hospital Readmission Rates for Medicare Home Health Beneficiaries 

2000 2001 2002 2003 

Difference 

2000–2003 

Percentage of Medicare 

home health beneficiaries 

readmitted to the hospital 

47% 47% 47% 47% 0%

 Source: OIG analysis of National Claims History file data, 2005. 

No consistent trend in hospital readmission rates by beneficiary diagnosis 

Based on a previous OIG report that examined the effects of IPS and the 

adequacy of home health care,15 we included Medicare beneficiaries 

with the eight initial hospital diagnoses listed in Table 2 as at risk for 

receiving inadequate care. Our analysis showed no consistent trend in 

hospital readmission rates for beneficiaries with at-risk diagnoses from 

2000 through 2003.16 While multiple sclerosis and pulmonary disease 

each showed 5 percentage point increases, diabetes and Alzheimer’s 

remained the same and dementia decreased by 1 percentage point. 

Table 2 

Percentage of At-Risk Medicare Home Health Beneficiaries 

Readmitted to the Hospital 

Diagnosis and ICD-9 Code 

2000 2001 2002 2003 

Difference 

2000–2003 

Dementia – 294 19% 18% 17% 18% -1% 

Renal failure – 586 41% 46% 45% 45% +4% 

Diabetes – 250 27% 28% 28% 27% 0% 

Alzheimer’s – 331 16% 17% 16% 16% 0% 

Heart failure – 428 38% 38% 38% 38% 0% 

Multiple sclerosis – 340 7% 12% 11% 12% +5% 

Pulmonary disease – 494 31% 33% 35% 36% +5% 

Quadriplegia – 344 20% 19% 22% 18% -2% 

Source: OIG analysis of National Claims History file data, 2005. 

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IPS PPS 

F I NDING S 

We examined the five most common DRGs associated with Medicare 

beneficiaries who were readmitted to the hospital. The ranking of the 

five most common initial hospital DRGs for Medicare home health 

beneficiaries remained the same from 2000 through 2003. (See Table 3.) 

In addition, the rates of readmission for beneficiaries with those 

diagnoses remained stable. 

Table 3 

Highest Volume Diagnosis Related Groups for Medicare Home Health 

Beneficiaries Readmitted to Hospitals 

Initial Hospital Diagnosis and DRG* 

2000 2001 2002 2003 

Difference 

2000–2003 

Heart failure and shock – 127 8% 8% 7% 7% -1% 

Rehabilitation – 462 6% 7% 7% 7% +1% 

Simple pneumonia and pleurisy – 089 4% 4% 4% 4% 0% 

Chronic obstructive pulmonary disease – 088 4% 4% 4% 4% 0% 

Major joint and limb reattachment – 209 4% 4% 4% 4% 0%

 * Refers to DRG for the first hospital admission. 

Source: OIG analysis of National Claims History file data, 2005. 

Stability in readmission rates for preventable adverse events 

The OASIS dataset captures information on whether beneficiaries 

readmitted to the hospital needed care because of one of four adverse 

events: (1) improper medication administration, medication side effects, 

toxicity, and anaphylaxis; (2) injury caused by fall or accident at home; 

(3) wound infection, deteriorating wound status, and new lesion/ulcer; 

and (4) hypo/hyperglycemia or diabetes out of control. The readmission 

rate for wound infection is about 2 percent, and the rate for the other 

three adverse events is less than 1 percent. Readmission rates for two 

of the four adverse events remained the same and the other two 

changed by less than 0.2 percent from 2000 to 2003. 

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IPS PPS 

IPS PPS 

F I NDING S 

The rate of emergency department 

visits for Medicare home health

Minimal Changes in Emergency Department 

Visit Rates 

beneficiaries discharged from 

hospitals increased slightly from 2000 to 2003. When Medicare 

reimbursed home health agencies under IPS in 2000, 29 percent of 

home health beneficiaries had an emergency department visit. After 

the PPS took effect, the percentage stayed the same in 2001 and 2002, 

but increased to 30 percent in 2003. (See Table 4.) 

Table 4 

Emergency Department Visit Rates for Medicare Home Health Beneficiaries 

2000 2001 2002 2003 Difference 

2000–2003 

Percentage of Medicare home 

health beneficiaries with visits to 

emergency department 

29% 29% 29% 30% +1%

 Source: OIG analysis of National Claims History file data, 2005. 

Little change in rates of emergency department visits by beneficiary 

diagnosis 

The percentages of home health beneficiaries with at-risk diagnoses 

who had an emergency department visit increased slightly from 2000 to 

2003. Table 5 shows that four of the eight diagnoses increased by as 

little as 1 percent. Beneficiaries with renal failure had the largest 

increase, from 22 percent to 26 percent. 

Table 5 

Percentage of At-Risk Medicare Home Health Beneficiaries Who Made 

Emergency Department Visits 

Diagnosis and ICD-9 Code 2000 2001 2002 2003 Difference 

2000–2003 

Dementia – 294 13% 14% 13% 14% +1% 

Renal failure – 586 22% 28% 28% 26% +4% 

Diabetes – 250 18% 19% 19% 20% +2% 

Alzheimer’s – 331 11% 13% 12% 12% +1% 

Heart failure – 428 19% 22% 22% 22% +3% 

Multiple sclerosis – 340 9% 10% 9% 10% +1% 

Pulmonary disease – 494 19% 19% 20% 20% +1% 

Quadriplegia – 344 13% 15% 15% 15% +2%

 Source: OIG analysis of National Claims History file data, 2005. 

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IPS PPS 

F I NDING S 

We examined the five most common DRGs associated with Medicare 

beneficiaries who visited the emergency department. The ranking of 

the five most common initial hospital diagnoses for Medicare home 

health beneficiaries changed slightly before and after the 

implementation of the PPS. The top four diagnoses remained the same. 

Specific cerebrovascular disorders (DRG 014) had the fifth-highest 

volume in 2000, although it dropped to sixth by 2003. In addition, the 

rates of emergency department visits for beneficiaries in the five 

diagnoses listed remained stable. (See Table 6.) 

Table 6 

Highest Volume DRGs for Medicare Home Health 

Beneficiaries With Emergency Department Visits 

Initial Hospital Diagnosis and DRG* 

2000 2001 2002 2003 

Difference 

2000–2003 

Rehabilitation – 462 7% 7% 7% 8% +1% 

Heart failure and shock – 127 7% 6% 6% 6% -1% 

Major joint and limb reattachment – 209 4% 5% 5% 5% +1% 

Simple pneumonia and pleurisy – 089 4% 4% 4% 4% 0% 

Chronic obstructive pulmonary disease – 088 3% 4% 3% 4% +1% 

* Refers to DRG for the first hospital admission 

Source: OIG analysis of National Claims History file data, 2005. 

Stability in emergency department visit rates for preventable adverse events 

The rates for emergency department visits due to the four measured 

preventable adverse events for home health beneficiaries remained 

stable from 2000 to 2003. The emergency department visit rates for all 

four adverse events were less than 1 percent. Emergency department 

visit rates for home health beneficiaries for two of the adverse events 

(wound infection and hypo/hyperglycemia) increased 0.1 percent in 

4 years, while emergency department visit rates for the other two 

(improper medication administration and injury caused by fall or 

accident at home) remained the same. 

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Δ CONCLUSION 

Our analysis shows little overall change in hospital readmission rates 

and emergency department visit rates following the implementation of 

the home health PPS for beneficiaries discharged from hospitals. This 

result suggests that the change in payment systems has not led to 

increased use of hospital and emergency services. 

At the same time, however, our analysis shows that beneficiaries with 

certain diagnoses are being readmitted to hospitals and visiting 

emergency departments to a greater extent than prior to the PPS. Most 

notably, beneficiaries with a primary diagnosis of renal failure showed 

increases in readmission rates and use of emergency departments. 

Beneficiaries with a primary diagnosis of pulmonary disease or multiple 

sclerosis also showed increased hospital readmission rates and, to a 

lesser degree, increased rates of emergency department usage. 

Consequently, it would be prudent to monitor indicators of quality in 

home health care, such as readmission rates and use of emergency 

departments, on an ongoing basis. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

In its comments to the draft report, CMS agreed with our findings that 

there has been little change in hospital readmission rates and 

emergency department visit rates following the implementation of PPS. 

The agency also agreed with our observation that it would be prudent to 

continue monitoring indicators of quality in home health care in light of 

our analysis that showed that beneficiaries with certain diagnoses had 

higher hospital readmission rates and more visits to emergency 

departments than other beneficiaries. CMS stated that the results 

presented in the report will assist it in measuring and reporting on the 

performance of home health care. 

We clarified the report background based on technical comments that 

CMS provided. The full text of CMS’s comments is included as 

Appendix A. 

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Δ ENDNOTE S 

1 Centers for Medicare & Medicaid Services, “Health Care Financing 

Review: Medicare and Medicaid Statistical Supplement: 2001.” 

2 P. L. 105-33. 

3 Centers for Medicare & Medicaid Services, “Health Care Financing 

Review: Medicare and Medicaid Statistical Supplement: 2001.” 

4 http://www.nahc.org/NAHC/LegReg/Crisis/hhasbystate.html. 

5 Centers for Medicare & Medicaid Services, “Health Care Financing 

Review: Medicare and Medicaid Statistical Supplement: 2001.” 

6 42 CFR 484.55(a)(1) and (2) Condition of Participation: Comprehensive 

assessment of patients. 

7 These events and intervals are the start of care, end of each 60-day 

home health episode, time of a transfer to an inpatient facility, 

resumption of home health services after a hospitalization, hospital 

discharge, and death at home. 

8 Department of Health and Human Services, Office of Inspector General, 

Final Report, “Medicare Beneficiary Access to Home Health Agencies,” 

OEI-02-99-00530, October 1999. 

9 Department of Health and Human Services, Office of Inspector General, 

Final Report, “Adequacy of Home Health Services: Hospital 

Re-Admissions and Emergency Room Visits,” OEI-02-99-00531, 

September 2000. 

10 www.medicare.gov/HHCompare/Home.asp, accessed August 1, 2005. 

11 Centers for Medicare & Medicaid Services’ PPS concerns found in the 

agency’s comments to the Department of Health and Human Services, 

Office of Inspector General’s Final Report, “Adequacy of Home Health 

Services: Hospital Re-Admissions and Emergency Room Visits,” 

OEI-02-99-00531, September 2000, p. 19. 

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 Government Accountability Office’s PPS concerns found in “Medicare 

Home Health: Prospective Payment System Will Need Refinement as 

Data Become Available,” No. HEHS-00-9, April 2000. 

 Medicare Prospective Payment Assessment Commission’s PPS concerns 

found in “Report to the Congress: Medicare Payment Policy,” March 

2004. 

12 A previous OIG report identified eight initial hospital diagnoses as at 

risk for receiving inadequate care (dementia, renal failure, diabetes, 

Alzheimer’s, heart failure, multiple sclerosis, pulmonary disease, 

quadriplegia). 

13 Department of Health and Human Services, Office of Inspector 

General, Final Report, “Medicare Beneficiary Access to Home Health 

Agencies,” OEI-02-99-00530, October 1999. 

Government Accountability Office, “Interim Payment System for 

Home Health Agencies,” No. HEHS-98-234, August 6, 1998. 

Government Accountability Office, “Closures Continue, With Little

Evidence Beneficiary Access Is Impaired,” No. HEHS-99-120, 

May 1999. 

Medicare Prospective Payment Assessment Commission, “Report to

the Congress: Post-Acute Care Providers: Moving Toward Prospective

Payment,” March 1999. 

14 Department of Health and Human Services, Office of Inspector 

General, analysis of National Claims History file data 2004. 

(2000: 64%, 2001: 66%, 2002: 65%, 2003: 64%) 

15 Department of Health and Human Services, Office of Inspector 

General, Final Report, “Adequacy of Home Health Services: Hospital 

Re-Admissions and Emergency Room Visits,” OEI-02-99-00531, 

September 2000. 

16 The ICD-9 codes from many of the beneficiaries in our 2000 data were 

missing. These omissions may explain some of the immediate changes 

in the percentages from the IPS in 2000 to PPS in 2001. 

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Δ APPENDIX A 

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A G E N C Y CO MMENT S

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A G E N C Y CO MMENT S

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Δ ACKNOWLEDGMENTS 

This report was prepared under the direction of Joyce M. Greenleaf, 

Regional Inspector General for Evaluation and Inspections in the 

Boston regional office, and Russell W. Hereford, Assistant Regional 

Inspector General. Other principal Office of Evaluation and Inspections 

staff who contributed include: 

Danielle Fletcher, Project Leader 

Sandy Khoury, Program Specialist 

Tricia Davis, Director, Medicare and Medicaid Branch 

Technical Assistance 

Scott Horning, Program Analyst 

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