Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

JANET REHNQUIST 

Inspector General 

December 2001 

OEI-02-00-00620 

The Physician’s Role 

in Medicare Home Health 

2001 
OFFICE OF INSPECTOR GENERAL 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 

protect the integrity of the Department of Health and Human Services programs as well as the 

health and welfare of beneficiaries served by them. This statutory mission is carried out through a 

nationwide program of audits, investigations, inspections, sanctions, and fraud alerts. The 

Inspector General informs the Secretary of program and management problems and recommends 

legislative, regulatory, and operational approaches to correct them. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 

Inspector General. It conducts short-term management and program evaluations (called 

inspections) that focus on issues of concern to the Department, the Congress, and the public. The 

inspection reports provide findings and recommendations on the efficiency, vulnerability, and 

effectiveness of departmental programs. 

OEI's New York regional office prepared this report under the direction of John I. Molnar, 

Regional Inspector General, and Renee C. Dunn, Deputy Regional Inspector General. Principal 

OEI staff included: 

REGION 

Ellen Vinkey, Project Leader
 

Judy Kellis, Lead Analyst
 

Christi Macrina
 

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) 264-2000. 

Reports are also available on the World Wide Web at our home page address: 

http://www.hhs.gov/oig/oei 
EXECUTIVE SUMMARY 

PURPOSE 

To describe physicians’ practices in prescribing, certifying, and monitoring Medicare home 

health services within the context of the Centers for Medicare and Medicaid Services’ 

expectations. 

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 is conducting on Medicare home health services. For this study, we mailed 

questionnaires to 600 physicians who signed Medicare home health plans of care in the 

last 6 months of 2000. We supplemented these data with survey data from Medicare 

beneficiaries and home health agencies, as well as the Centers for Medicare and Medicaid 

Services (CMS) claims data. 

FINDINGS 

Physicians Play a Key Role in Medicare’s Home Health Benefit 

Virtually all physicians (97 percent) report that they have some familiarity with most 

patients for whom they sign a home health plan of care. Most physicians also say they are 

involved in identifying the specific home health services their patients need, with over half 

reporting that they work jointly with home health agencies or hospital staff to make these 

determinations. Eighty-six percent of physicians report that they see their patients at least 

once a month while they are receiving home health services. 

Physicians Report a Lack of Knowledge of Medicare Home Health Rules 

Physicians report that they are not clear on key Medicare rules. For example, 38 percent 

of physicians report that they are unclear on the Medicare criteria for “homebound.” Half 

say that they are not clear on the definition to apply when certifying medical necessity. 

Physicians Believe Not All Medicare Expectations of Them Can be Met 

We found that most physicians know what CMS expects of them but many believe they 

are not able to provide this level of oversight of Medicare home health patients. For 

example, while 83 percent of physicians believe that Medicare expects them to ensure that 

only medically necessary services are on the plan of care, only 48 percent say they are able 

to ensure that this is the case. There is also a large difference between the percentage of 

physicians that believe Medicare expects them to ensure that home health 

The Physician’s Role in Medicare Home Health 2001 i OEI-02-00-00620 
patients are homebound, and the number that believe they are able to do this (59 versus 26 

percent). In addition to reporting concerns about their ability to meet CMS’ oversight 

expectations, some physicians report being confused about the degree to which they can 

be held liable for inappropriate home health certifications. 

Over Half of Medicare Physicians Are Unaware of New Home Health Prospective 

Payment System 

About 60 percent of physicians report they have never heard of the Medicare home health 

prospective payment system, which went into effect October 1, 2000. 

Effectiveness of Physician Payments is Questionable 

Beginning in 1995, physicians were permitted to bill for care plan oversight in an effort to 

encourage additional physician involvement. Recent claims data indicate that physicians 

bill for care plan oversight at a rate of less than three percent of total home health claims. 

Regarding newly available payments for certification and re-certification of the plan of 

care, data for the first quarter of 2001 reveal that physicians billed for these payments at a 

rate of less than five percent. These low billing rates indicate that, at present, there is little 

willingness on the part of physicians to pursue these payments. Physicians report that 

there is too much paperwork involved in submitting these claims, and the payment amount 

is not high enough to make it worthwhile. 

RECOMMENDATIONS 

Physicians are currently playing an important role in initiating, certifying and monitoring 

the care for Medicare home health beneficiaries. However, they are doing so despite 

limited knowledge of key Medicare rules as well as discomfort with CMS’ expectations. 

At present, the availability of reimbursement for their oversight role does not seem to be 

having a significant impact on physicians who care for Medicare home health patients. 

In order to address physician concerns and improve the Medicare home health services, 

we recommend the following. 

<	 The Centers for Medicare & Medicaid Services should review relevant 

informational materials available to Medicare physicians to determine areas where 

improvements and clarifications can be made. 

<	 The Centers for Medicare & Medicaid Services should establish a workgroup 

composed of physicians, home health representatives, and departmental designees, 

or utilize an existing workgroup such as the Practicing Physicians Advisory 

Council or the Physician Regulatory Issues Team to discuss issues related to 

Medicare home health care. We offer the following issues for consideration by the 

workgroup. 

The Physician’s Role in Medicare Home Health 2001 ii OEI-02-00-00620 
 -	 The need for more effective and widespread home health education for 

physicians; 

-	 Further clarification of payment and coverage policies, including the home 

health definitions for “homebound” and “medically necessary;” 

- The simplification of home health certification forms; 

-	 An analysis of the costs and benefits associated with the promotion of 

physician home visits; 

-	 The possibility of requiring home health agencies to employ medical 

directors; 

-	 The consideration of whether CMS oversight expectations of physicians can 

be realistically met; and, 

-	 The creation of a system enabling patients to appeal if they feel they are 

receiving inadequate care. 

COMMENTS 

We received comments on our draft report from several physician and home health 

organizations: The American Academy of Home Care Physicians, The American College 

of Physicians-American Society of Internal Medicine, The American Medical Association, 

and The National Association for Home Care. These organizations generally agreed with 

our findings and recommendations. They also provided specific suggestions on how to 

increase physician understanding of the Medicare home health benefit and to promote 

further physician involvement with their home care patients. (We include these 

organizations' comments in full in Appendix E.) 

We also received comments on our draft report from the Centers for Medicare & 

Medicaid Services (CMS). The CMS concurred with our findings and also made a 

number of technical comments that we incorporated into the report when appropriate. In 

addition, CMS had two methodological concerns. First, they expressed concern that our 

sampling time frame did not include a long enough period of time when the prospective 

payment system (PPS) was in effect. We acknowledge that our work occurred in the early 

stages of PPS implementation. However, it is important to note that physician knowledge 

of PPS is only one issue among several that we sought to address. Second, CMS stated 

that our sample may be biased against respondents who have had enough experience 

signing plans of care. We were also concerned about this. Therefore, in our 

methodology we included only physicians who signed two or more home health plans of 

care during the 6 month sampling time frame. 

The Physician’s Role in Medicare Home Health 2001 iii OEI-02-00-00620 
TABLE OF CONTENTS

PAGE
 

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

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

FINDINGS 

Physicians Play a Key Role .............................................. 10
 

Physicians Report a Lack of Knowledge .................................... 11
 

Physicians Believe Not All Expectations Can be Met .......................... 13
 

Over Half of Medicare Physicians Are Unaware of PPS ........................ 15
 

Effectiveness of Physician Payments is Questionable .......................... 15
 

RECOMMENDATIONS .................................................... 17
 

APPENDICES 

A: Selected List of Recent OIG Home Health Inspections ............................ 19
 

B: Chi-Square Test For Urban/Rural Differences .................................. 20
 

C: Confidence Intervals For Key Findings ........................................ 21
 

D: Physician Non-Respondent Analysis .......................................... 22
 

E: Comments .............................................................. 24
 

The Physician’s Role in Medicare Home Health 2001 iv OEI-02-00-00620 
INTRODUCTION 

PURPOSE 

To describe physicians’ practices in prescribing, certifying, and monitoring Medicare home 

health services within the context of the Centers for Medicare and Medicaid Services’ 

expectations. 

BACKGROUND 

The home health care environment has undergone a great deal of change within the last 

few years. This inspection is part of a current series of four Office of Inspector General 

(OIG) inspections about Medicare home health care. Medicare Beneficiary Experiences 

With Home Health Care OEI-02-00-00560, looks at the experiences of Medicare 

beneficiaries in accessing and receiving home health care. Access to Home Health Care 

After Hospital Discharge 2001 OEI-02-01-00180, assesses the effects of the prospective 

payment system on access to home health care for Medicare beneficiaries who are 

discharged from the hospital. Medicare Home Health Care- Beneficiaries From The 

Community OEI-02-01-00070, looks at access to home health for beneficiaries who have 

not recently been in the hospital. See Appendix A for a list of other recent OIG reports 

relating to home health care. 

This inspection also follows up on a June 1995 study on the physician role in providing 

home health care. In that earlier report, the OIG found that physicians were most 

involved in referring patients, approving plans of care, and monitoring the progress of 

complex patients. However, both home health agencies and physicians identified obstacles 

to effective physician involvement. 

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 hospital-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 

The Physician’s Role in Medicare Home Health 2001 1 OEI-02-00-00620 
services: skilled nursing care, physical therapy, speech therapy, and 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 

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 the 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, the Health Insurance Portability and Accountability Act 

substantially increased financial support to the OIG’s fraud control efforts. 

The Physician’s Role in Home Health Care 

Physician as the “Gatekeeper” 

The Centers for Medicare and Medicaid Services (CMS) require that a physician sign 

every patient’s individual plan of care certifying that the patient is homebound and the 

planned services are medically necessary in order for the home health agency to be 

reimbursed for Medicare covered services.2 This role that CMS is relying on physicians to 

fulfill is sometimes thought of as a “gatekeeper.” Historically, many physicians have 

focused their attention on the determination of their patients’ medical needs and have been 

less comfortable with the “gatekeeper” role. 

Physician liability fraud alert 

In January 1999, the OIG released a special fraud alert directed to the physician 

community that addressed their role in certifying Medicare home health services for their 

patients. The Fraud Alert was issued “because physicians may not appreciate the legal 

1

Comparisons are between the first 2 months of 1997 and the analogous period in 1999. 

2

Medicare home health regulations, 42 CFR 484.18, require physicians to establish, sign, and periodically review a 

plan of care specifying all services the patient is to receive. The plan of care must be re-certified every 60 days. 

The Physician’s Role in Medicare Home Health 2001 2 OEI-02-00-00620 
and programmatic significance of certifications they make in connection with the ordering 

of home health care for Medicare beneficiaries.” It stresses the significance of their 

responsibility as the party who certifies the medical necessity for home health care, signs 

off on the level of services needed, and certifies that the patient is homebound. The Fraud 

Alert also emphasizes the need for the certifying physician to have firsthand knowledge of 

the relevant patient. 

The Fraud Alert notes that “a physician is not personally liable for erroneous claims due to 

mistakes, inadvertence, or simple negligence,” but that “knowingly signing a false or 

misleading certification or signing with reckless disregard for the truth can lead to serious 

criminal, civil, and administrative penalties.” However, in our pre-inspection discussions 

with physicians, it was apparent that there is a significant amount of confusion surrounding 

the physician liability issue. Many physicians were aware of the fraud alert and mistakenly 

thought that it held them personally liable in all cases. Some physician groups and home 

health agencies indicate that physicians have become less willing to sign off on Medicare 

plans of care as a result of the Fraud Alert. The OIG recently issued the final version of 

the Compliance Program Guidance for Individual and Small Group Physician Practices. A 

major focus of this guidance is on the difference between “erroneous claims” and 

“fraudulent claims.” 

The physician’s role under the prospective payment system 

Recent changes in the way Medicare reimburses home health agencies have affected the 

physician role in home health care envisioned by CMS. The Balanced Budget Act of 1997 

required that the existing cost-based home health payment system be replaced with a 

prospective payment system (PPS) of fixed, predetermined rates. Prior to the 

implementation of PPS on October 1, 2000, home health agencies were reimbursed based 

on what it costs to provide services to Medicare beneficiaries. As a result, there was a 

financial incentive for HHAs to provide more services than might be necessary. As 

indicated earlier, under this system the physician was seen as the “gatekeeper,” responsible 

for ensuring that patients only received services that were medically necessary. Under the 

new prospective payment system, financial incentives have changed somewhat, and 

physicians are now being asked to fulfill a dual role. The CMS is still relying on physicians 

to ensure that Medicare beneficiaries are homebound and have a need for medical services. 

However, because agencies are now paid fixed, pre-determined rates, there may be an 

incentive for some home health agencies to limit the services provided within a given 

episode of care. As a result, physicians are now also being called upon to ensure that 

patients get appropriate care, as well as a sufficient amount of care. 

In a recent directive sent to Medicare Carriers, CMS provided guidance on this new 

physician role and directed the Carriers to alert physicians about their new responsibilities 

under the prospective payment system. This program memorandum indicated that 

“physician responsibility in the PPS environment is to be the determiner of the patient’s 

health care needs and advocate for the services required to meet those needs.” The 

physician’s role is no longer simply that of a “gatekeeper” for the duration of home care 

The Physician’s Role in Medicare Home Health 2001 3 OEI-02-00-00620 
services. Instead, under PPS the physician role has become one of “gatekeeper” at the 

onset, ensuring that the patient is eligible for Medicare home health services, then, 

subsequent to the start of home health, physicians are expected to ensure that the patient is 

not short-changed with regard to the services that Medicare is paying the agency to 

provide. It is worth noting that there are no specific guidelines as to what level of service 

a given type of Medicare beneficiary should receive. The physician is expected to make 

this determination as the patient’s advocate. 

Prospective Payment System Reimbursement 

Under the new prospective payment system, reimbursement is based on each 60-day 

episode of care. For initial episodes, the home health agency receives 60 percent of its 

estimated payment for services up front when it submits a Request for Anticipated 

Payment. Although a physician signed plan of care is not required prior to the submission 

of the Request for Anticipated Payment, home health agencies must receive and 

substantiate a physician order before this request can be made. This can be done through 

one of three alternative processes set out in recently revised CMS regulations. One 

alternative is for agencies to record the physician’s verbal order in the patient’s plan of 

care, including a physician description of the patient’s condition and the services to be 

provided. This verbal order must be signed and dated by the agency’s registered nurse or 

therapist and a copy of the plan of care must be immediately submitted to the physician. A 

second alternative is for the physician to write out a prescription for services, again 

including the patient’s condition and the services to be provided. Finally, agencies can 

follow the previously established procedure and have the physician sign the plan of care 

prior to submitting the Request for Anticipated Payment. Under the new procedure, a 

signed plan of care is required by the end of the 60-day episode in order for the HHA to 

receive the remaining 40 percent payment. 

Physician Payments for Oversight and Certification of the Plan of Care 

Payment for care plan oversight 

In an effort to encourage additional physician involvement, beginning in 1995, CMS 

regulations have provided for physician reimbursement for care plan oversight. Physicians 

(as well as nurse practitioners, physician assistants, and clinical nurse specialists) may bill 

Medicare for this under CPT code 99375.3 On January 1, 2001, the national average 

payment rose from $99 to $122. 

3 Since 1995, the code used to bill for home health care plan oversight has changed a number of times for a variety of 

reasons. As of January 1, 2001, the code is temporary HCPCS code G0181. 

The Physician’s Role in Medicare Home Health 2001 4 OEI-02-00-00620 
In order to bill for care plan oversight, the following conditions must be met: 

1.	 the beneficiary must require complex or multi-disciplinary care modalities requiring 

ongoing physician involvement in the patient's plan of care; 

2.	 the care plan oversight services should be furnished during the period in which the 

beneficiary is receiving Medicare covered home health care services; 

3.	 the physician who bills for care plan oversight must be the same physician who 

signed the home health plan of care; 

4.	 the physician must furnish at least 30 minutes of care plan oversight within the 

calendar month for which payment is claimed; and, 

5.	 no other physician can be paid for care plan oversight for the same patient during 

the relevant month. 

The CMS representatives indicate that the number of physicians claiming care plan 

oversight reimbursement has been below projections. Some believe this indicates that the 

availability of this reimbursement has not increased physician involvement in the way it 

was hoped. This has led to ongoing discussions about other approaches that might be 

effective in increasing physician involvement. 

New payment for certification of plan of care 

Another change related to physicians with home health patients involves new payments for 

physician certification and re-certification of patients’ plans of care. As of January 1, 

2001, physicians are able to bill for these services under HCPCS code G0180, for 

certification, and HCPCS code G0179, for re-certification. The final rule establishing 

these payments indicates that the “certification (and re-certification) services being paid 

for include creation and review of a plan of care for a patient and verification that the 

home health agency initially complies with the physician’s plan of care.” In addition, these 

payments include “the physician’s work in reviewing data collected in the home health 

agency’s patient assessment, including Outcome and Assessment Information Set (OASIS) 

data.” CMS does not require physicians to review the OASIS, but if they do, this work is 

included in the payment for certification or re-certification. 

The CMS introduced these new payments in hopes of increasing physician involvement, 

particularly given the implementation of the prospective payment system. Physicians will 

be able to claim these payments in addition to reimbursement claimed for care plan 

oversight. Unlike care plan oversight, nurse practitioners, physician assistants and clinical 

nurse specialists cannot bill for certification or re-certification of the home health plan of 

care. Physician payments for these services will be, on average, $73 and $61, respectively. 

The Physician’s Role in Medicare Home Health 2001 5 OEI-02-00-00620 
Physician Group Established by the Centers for Medicare and Medicaid Services 

The Physician Regulatory Issues Team was created by CMS in 1998 to help make 

Medicare rules clear and reasonable for physicians. The Team provides physicians with a 

forum to discuss how Medicare regulations and other program rules and guidelines affect 

their practices and their patients. One of its main goals is to reduce the regulatory burden 

on physicians. 

Prior OIG Work on Physician Involvement in Home Health Care 

Two previous OIG studies have examined physician involvement in Medicare home health 

care. As indicated earlier, The Physician’s Role in Home Health Care, OEI-02-94-00170, 

surveyed both home health agencies and the physicians who referred patients to them. 

The study provided a description of physicians’ involvement in home health at the time. It 

found that physicians were most involved in referring patients, approving plans of care, 

and monitoring the progress of complex patients. They appear to have been less involved 

in coordinating services, visiting patients at home, and participating in interdisciplinary 

conferences. Physicians and agencies both cited problems in communicating with each 

other and difficulties in getting the plan of care signed. Some agencies felt physicians 

lacked adequate education in home health care and an understanding of the home health 

benefit. 

Another OIG report issued in 1996, Results of the Operation Restore Trust Audit of 

Medicare Home Health Services in California, Illinois, New York, and Texas, A-04-96-

02121, found that 40 percent of services in a sub-sample of the home health claims 

reviewed did not meet Medicare reimbursement requirements. These inappropriate claims 

included services not reasonable and necessary, services to beneficiaries who were not 

homebound, services that did not have a valid physician’s order, and services that did not 

have supporting documentation. The study found the majority of physicians relied on 

home health agencies to assess their patients’ needs and to make the homebound 

determination. The audit report suggested that inadequate physician involvement was a 

leading cause of the unallowable services identified in the audit. In a follow-up audit 

conducted in 1998, Review of Medicare Home Health Services in California, Illinois, 

New York, and Texas, A-04-99-01194, the OIG found that the error rate for inappropriate 

home health services dropped to 19 percent; however, the error rate associated with 

payments for these services was higher at 30 percent. 

Related Work 

The American Medical Association (AMA) released a report in 1993 discussing two 

potential conflicts of interest physicians may come across in referring patients to home 

health care. In some instances, home health agencies may offer payment to physicians for 

their services or referrals. The AMA advises physicians not to accept these payments, as 

they may compromise physician objectivity in choosing the most appropriate home health 

agency for their patients’ needs. Physicians may also come across situations where they 

may want to refer patients to agencies in which they have an ownership interest. The 

The Physician’s Role in Medicare Home Health 2001 6 OEI-02-00-00620 
AMA advises against this practice of self-referral unless the physician provides direct care 

under the agency or there is a community need for the agency and no alternative financing 

is available. In 1998, the AMA published a report entitled Medical Management of the 

Home Care Patient: Guidelines for Physicians. It provides an overview of the 

physician’s role in home health care and discusses related Medicare policies and fraudulent 

practices. 

A 1998 report released by the Massachusetts Medical Society, entitled Physician’s 

Practice Patterns, Attitudes Towards, and Perceptions of Home Health Care, found that 

physicians in their sample were less than moderately involved in the selection of the home 

health agency. These physicians also reported a low level of knowledge of home care 

payments and regulations. At the same time, the physicians acknowledged the importance 

of improving physician education in these areas. Very few physicians reported submitting 

care plan oversight charges. The majority were not aware they could charge for oversight 

services. Only 39 percent of sample respondents reported making home visits. The study 

suggested that “while respondents are not satisfied with their current level of oversight, 

and would like to see a greater level of control, they don’t wish to undertake this 

themselves.” 

METHODOLOGY 

We obtained data for this study from a number of different sources. These included the 

following: a physician mail survey; a mail survey of home health care beneficiaries; a 

telephone survey of home health agencies; and, CMS claims data. 

We conducted our mail surveys subsequent to the implementation of the home health 

prospective payment system which went into effect on October 1, 2000. In addition, our 

physician survey was conducted after the implementation of the calendar year 2001 

physician payment fee schedule, which authorizes payments for certification and recertification of the home health plan of care. 

Sample Selection 

Using the CMS National Claims History File, we identified all Medicare beneficiary HHA 

claims for services begun during the last 6 months of calendar year 20004

. Based on CMS 

data, we identified all physicians who signed the home health plan of care associated with 

the claim. To assure we had physicians that refer beneficiaries to home health with some 

frequency, we eliminated physicians who signed home health plans of care for only one 

beneficiary during the six month period. After eliminating duplicate physicians and invalid 

provider numbers, we then selected a simple random sample of 600 physicians. 

4

This sample was pulled during the third week of February 2001. 

The Physician’s Role in Medicare Home Health 2001 7 OEI-02-00-00620 
Physician Mail Survey 

A self-administered mail questionnaire was sent to all 600 sample physicians. Our 

questions focused primarily on the experiences of physicians when ordering and 

overseeing Medicare home health services; obstacles they face in performing this function; 

whether the availability of additional Medicare payments provides sufficient incentive for 

physicians to be more involved in the provision of home health services to their patients; 

and, how, if at all, the physician role has changed since the implementation of the home 

health prospective payment system. In order to maximize our response rate, we sent a 

letter prior to the questionnaire, reminder postcards after the questionnaire, and a second 

mailing of questionnaires to non-respondents. We received responses back from 349 

physicians, giving us an overall response rate of 58 percent. 

Beneficiary Mail Survey 

For this study, we included a limited number of questions as part of a larger selfadministered mail questionnaire being sent by the OIG to a separate sample of Medicare 

home health beneficiaries. This questionnaire was sent to 700 beneficiaries with a usable 

address. Our questions focused primarily on beneficiary experiences with their physicians 

at the time home health care was ordered, as well as during their home health episode. 

The overall response rate for that survey was 74 percent. 

Home Health Agency Survey 

We conducted telephone interviews with a random sample of 30 home health agencies. 

Our questions focused on their perception of the physician’s role in home health care. 

Due to the small sample size we consider these data descriptive in nature and do not 

project to the universe based on this data. 

Analysis of Claims 

We used the five percent sample of Part B claims from CMS’ National Claims History File 

to determine how often physicians bill for care plan oversight. Our analysis involved 

looking at the percentage of HHA claims that had a physician care plan oversight bill 

associated with them in 1999 (as a proportion of all home health claims in that year). We 

also analyzed data from prior years to identify whether this percentage is increasing, 

decreasing, or remaining constant. Similarly, we identified the percentage of physicians 

who submitted claims for the certification or re-certification of care plans in the first few 

months of 2001, the year these payments became available. 

In addition, we used National Claims Data to determine how familiar physicians are with 

their patients prior to signing their plans of care, as well as how much they remain 

involved with patients after they start receiving home health care. To do this, we 

identified all beneficiaries who started home health services in the last 6 months of 2000. 

We analyzed the number of patient visits billed to Medicare by the physician who signed 

the plan of care in the 12 month period preceding their signature on the care plan. 

The Physician’s Role in Medicare Home Health 2001 8 OEI-02-00-00620 
Similarly, we analyzed physicians’ involvement once home health services began by 

looking at the number of patient visits billed by the physician for the duration of the 

patient’s stay in home health, up to 3 months5. 

Limitations 

Our sample selection methodology focused on physicians who signed multiple plans of 

care in an effort to ensure that respondents had sufficient experience to answer our 

questions. Therefore, our results are projectable to physicians who sign more than one 

plan of care in a given 6 month period. 

In addition, for all analyses where CMS claims data are utilized, data for more recent 

periods will be somewhat less complete than prior period data. 

5

Please note that not all beneficiaries included in this analysis received home health care for the entire 3 

month period. 

The Physician’s Role in Medicare Home Health 2001 9 OEI-02-00-00620 
FINDINGS 

Physicians play a key role in Medicare’s home health benefit 

A majority of physicians have had contact with patients prior to signing the plan 

of care 

Virtually all physicians in our sample (97 percent) report that they have some familiarity 

with most of the patients for whom they sign a home health plan of care. A majority of 

Medicare patients (82 percent) concur with physicians, reporting that they know the 

doctor who ordered their home health. Recent claims data are consistent with the 

reported experiences of physicians and patients. These data show that 85 percent of all 

beneficiaries saw the physician who signed their plan of care at least once in the 12 months 

prior to the start of their home health care.6 At present, there is no requirement that 

physicians see patients before signing their care plan. 

Physicians help determine and initiate home health services 

Most physicians are involved in identifying the specific home health services their patients 

need. Over half report working jointly with home health agencies or hospital staff to 

determine the services their patients will receive. Another quarter say they do this 

themselves, while 15 percent leave the determination of what a patient needs to the home 

health agency. 

Many physicians are also involved in finalizing the initial plan of care. Just under a third 

report they sometimes make changes to the plan of care. The majority of those who make 

changes do so when the home health agencies include different services than they think are 

appropriate. They also make changes to plans of care when they believe there are too 

many or too few services listed, or when a change in medication or patient needs occurs. 

Recent changes in Medicare guidelines allow home health agencies to begin services 

immediately after receiving a physician verbal order or a signed prescription. Previously, 

agencies were required to wait for physicians to sign the plan of care to commence 

services. About half of physicians report they currently initiate services by providing a 

verbal order describing the services needed with just under a quarter saying they are 

providing a prescription. Only 21 percent say they sign the plan of care to initiate 

services7

. The 30 home health agencies we spoke with also report that most physicians 

are now providing a verbal order to initiate home health services. It should be noted that 

all physicians are still required to sign the finalized care plans for their Medicare patients. 

6

Note that any additional claims that were submitted by physicians after 2/28/01 are not reflected in this 

analysis, possibly understating this percentage. 

7

Nine percent report that they initiate services in some “other way.” 

The Physician’s Role in Medicare Home Health 2001 10 OEI-02-00-00620 
Physicians remain involved with their home health patients 

Almost all physicians (86 percent) report that they see their patients at least once a month 

while they are receiving home health services. These visits include both office and home 

visits. Claims data generally support the reported experiences of physicians. Claims data 

indicate that during the 3 month period following the start of home health care, at least 60 

percent of beneficiaries received services from the physician who signed their plan of 

care.8 

Additionally, physicians report they spend some time communicating with home health 

agencies and reviewing their patients’ records. About a third say they spend at least half 

an hour a month doing this for each patient, while 60 percent spend less than half an hour. 

Only 7 percent report that they do not spend any time communicating with home health 

agencies or reviewing their patients’ records. 

Overall, physicians are satisfied with the home health care their patients are receiving. 

Fifty-four percent report they are somewhat satisfied with their patients’ care, while 

another 37 percent report they are very satisfied. 

Few urban and rural differences 

Because there is some concern that the experiences of home health patients differ by 

geographical region, we looked for differences in opinions and reported practices of the 

physicians in our sample that practice in rural versus urban areas. We found only two 

statistically significant differences in our key findings. First, more rural physicians report 

making the initial determination that Medicare home health services are needed, while 

more urban physicians report that someone other than the physician makes this 

determination. Secondly, more rural physicians report they would prefer that the 

oversight of home health patients be done by physicians, while more urban physicians 

report they would prefer the oversight role be performed by someone else. (See Appendix 

B for more information.) 

Physicians report a lack of knowledge of Medicare home 

health rules 

As indicated earlier, the Centers for Medicare and Medicaid Services require that all 

Medicare home health patients be certified by a physician as homebound to be eligible for 

home health services. However, as indicated in the chart on the next page, 38 percent of 

physicians report that they are unclear on the Medicare criteria for “homebound.” In 

addition, just under half of all Medicare physicians report that they are not clear on the 

8

Note that additional claims that were submitted by physicians after 2/28/01 are not reflected in this 

analysis possibly understating this percentage and not all beneficiaries received home health services for the entire 

3 month period. 

The Physician’s Role in Medicare Home Health 2001 11 OEI-02-00-00620 
definition they are expected to apply when certifying that planned home health services are 

medically necessary. Although Medicare does not explicitly require physicians to certify 

that a given patient has a “skilled need” or that a given medical service is, in fact, covered 

by Medicare, in practice there is a need for physicians to have knowledge of Medicare 

rules in these areas. However, a full 80 percent report that they are unclear on what 

services are covered by Medicare and 50 percent do not know what Medicare considers a 

“skilled need.” 

* Note: percentages do not total 100 in each case due to non-response Source: OEI physician survey, 2001. 

Physicians rely on several sources for home health information 

We asked physicians what guidance on home health, if any, had been most helpful to them. 

It is worth noting that the majority of physicians do not obtain their information from 

CMS. The top three answers they gave were: guidance from hospital staff such as 

discharge planners (76 percent), guidance provided by home health agencies (55 percent), 

and guidance from physician publications that cover home health issues periodically (16 

percent). At present, only 11 percent of physicians report relying on program memoranda 

issued to physicians by Medicare Carriers. The number of doctors that report getting 

information from the Medicare website or Medicare conferences is also low, 1 percent and 

5 percent respectively. When we asked physicians what suggestions they have for future 

initiatives to provide them with guidance about Medicare home health rules, just over 20 

percent volunteered that they would like simplified information and more concise 

literature. 

The Physician’s Role in Medicare Home Health 2001 12 OEI-02-00-00620 
Physicians believe not all Medicare expectations of them can 

be met 

Under the home health prospective payment system, the Centers for Medicare and 

Medicaid Services are relying on physicians to fulfill two distinct expectations. First, 

physicians are required to certify that Medicare beneficiaries are homebound and have a 

medical need for services. Secondly, because agencies are now paid fixed rates, possibly 

providing an incentive for some home health agencies to limit services, physicians are 

being relied upon to help ensure that patients get all of the care for which they are eligible. 

A recent CMS program memorandum indicated that “physician responsibility in the PPS 

environment is to be the determiner of the patient’s health care needs and advocate for the 

services required to meet those needs.” 

Most physicians know what CMS expects of them but many believe they are not 

able to provide this oversight 

We asked physicians a number of questions about the functions Medicare expects them to 

perform with regard to home health patients. In addition, we asked them whether they 

believe they are able to perform these functions. There is wide discrepancy between what 

physicians believe they are expected to do and what they believe they are able to do. For 

example, while 83 percent of physicians believe that Medicare expects them to ensure that 

only medically necessary services are on the plan of care, only 48 percent believe they are 

able to ensure that this is the case. There is also a large difference between the percentage 

of physicians that believe Medicare expects them to ensure that home health patients are 

homebound and the number that believe that they are able to ensure this (59 versus 26 

percent). Chart B, below, provides additional information on the differences that exist 

between what physicians believe Medicare expects them to do and what they believe they 

are able to do. 

Source: OEI physician survey, 2001 

The Physician’s Role in Medicare Home Health 2001 13 OEI-02-00-00620
Interestingly, the 30 home health agencies we spoke with were more likely to say that 

physicians can fulfill CMS expectations than physicians were. Returning to the issue of 

whether physicians are able to ensure that only medically necessary services are on the 

plan of care, 24 of the 30 home health agencies we spoke to say “yes.” As indicated 

above, only 48 percent of physicians say they are able to do this. Sixteen of the home 

health agencies report that physicians can ensure patients are homebound, while only 26 

percent of physicians report that this is the case. 

Concerns over physician liability 

In addition to reporting concerns about their ability to meet CMS’ oversight expectations, 

some physicians are confused about the degree to which they can be held liable for 

inappropriate certifications. One quarter of physicians report that they have heard about 

the 1999 Fraud Alert issued by the Office of Inspector General that addresses physician 

liability for home health certification. Of physicians aware of this directive, 24 percent 

volunteer concerns about being held personally liable for well intentioned certifications of 

their patients’ home health care. Another 10 percent report that they have been made 

nervous by the Fraud Alert. 

In addition to finding concerns among physicians who are aware of the Fraud Alert, we 

found a large degree of misunderstanding on the part of all physicians. Only 25 percent 

correctly report that physicians can be held liable for inappropriate certifications only 

when they knowingly sign false or misleading certifications. The balance of physicians 

report incorrectly that they can be held liable for any inappropriate certifications they sign 

(41 percent) or that they have no clear understanding of what their liability may be (27 

percent). 

Physicians divided on who should perform the oversight role 

Despite the fact that physicians report reservations about their ability to fulfill the role 

Medicare expects of them, there is no consensus on the issue of who should perform this 

function. Forty-one percent of physicians report that they would like to see independent 

case managers, an unspecified person, home health agency medical directors, or 

independent ombudsman perform this function9. However, 56 percent report that the 

oversight of home health patients should not be done by someone other than the physician. 

9

Three percent of physicians did not respond to this question on the survey instrument. 

The Physician’s Role in Medicare Home Health 2001 14 OEI-02-00-00620 
Over half of Medicare physicians are unaware of new home 

health prospective payment system 

As indicated earlier, under the prospective payment system, physicians are being relied 

upon to ensure that patients get all the care for which they are eligible. We asked 

physicians whether or not they were aware of the new prospective payment system. 

About 60 percent of physicians report they have never heard of the Medicare home health 

prospective payment system (PPS), which went into effect October 1, 2000. Physicians 

who have heard of it, report having learned about it through physician publications, home 

health agencies, and hospital staff. 

We asked physicians who are aware of PPS if the implementation of the prospective 

payment system has changed their interactions with home health agencies or Medicare 

beneficiaries. Seventy-three percent report that it has not affected their interactions with 

agencies or beneficiaries. 

Effectiveness of physician payments is questionable 

Beginning in 1995, physicians were permitted to bill for care plan oversight. Reasons for 

the implementation of this payment include a desire on the part of the Centers for 

Medicare and Medicaid Services to recognize work physicians were performing, as well as 

to encourage additional physician involvement. Recent claims data indicate that physicians 

bill for care plan oversight at a rate of less than 3 percent of total home health claims. 

This low billing rate indicates that, at present, there is little willingness on the part of 

physicians to pursue these payments. Historic data show that these billings have been 

consistently low since they became available in 1995. 

Over two-thirds of all physicians report that they either do not know what constitutes 

home health care plan oversight or are not aware that they can bill for it. Of those 

physicians that report being aware that they can submit these bills, 82 percent say they 

choose not to. Physicians report that there is too much paperwork involved in submitting 

these claims and the payment amount is not high enough to make it worthwhile. In 

addition, many claim that it is unclear what Medicare requirements physicians must meet 

in order to qualify for reimbursement. In fact, a full one-third of the small number of 

physicians who are submitting bills to Medicare for home health care plan oversight report 

being unclear about requirements. 

A similar story is unfolding with regard to newly available payments for certification and 

re-certification of the plan of care. We analyzed early data on physician billings for these 

payments. Data for the first quarter of 2001 reveal that physicians billed for these 

payments at a rate of less than 3 percent each.10 Ninety percent of physicians report being 

10Based on physician claims received by April 30, 2001. Denominator is total number of Medicare home 

health claims submitted for the same period. 

The Physician’s Role in Medicare Home Health 2001 15 OEI-02-00-00620 
unclear on the requirements associated with certification/re-certification payments at the 

present time. Interestingly, despite a low initial billing rate and confusion about billing 

requirements, one-third of physicians report that they plan to submit bills to Medicare for 

these payments in the future. 

We asked home health agencies if they believe the amount of time physicians spend with 

their home health patients has increased, decreased or remained the same since CMS’ 

1995 implementation of the care plan oversight payment. Fifteen agencies say it has 

remained the same; nine say the amount of time physicians spend with their home health 

patients has increased; one agency reports that the amount of time has decreased; and, five 

say they “don’t know.” 

Physicians report desire for simplified rules and cite obstacles to more effective 

physician involvement 

As indicated earlier, just over 20 percent of physicians volunteered that they would like to 

see simplified Medicare rules related to their role in certifying home health and more 

concise guidance on the subject. When asked what obstacles they see to increased 

physician involvement in monitoring Medicare home health patients, physicians cite 

burdensome paperwork, a lack of time, and limited Medicare reimbursement. 

The Physician’s Role in Medicare Home Health 2001 16 OEI-02-00-00620 
RECOMMENDATIONS 

Physicians are currently playing an important role in initiating, certifying and monitoring 

the care for Medicare home health beneficiaries. However, they are doing so despite 

limited knowledge of key Medicare rules as well as discomfort with CMS’ expectations. 

At present, the availability of reimbursement for their oversight role does not seem to be 

having a significant impact on physicians who care for Medicare home health patients. 

In order to address physician concerns and improve the Medicare home health services, 

we recommend the following. 

<	 The Centers for Medicare & Medicaid Services should review relevant 

informational materials available to Medicare physicians to determine areas where 

improvements and clarifications can be made. 

<	 The Centers for Medicare & Medicaid Services should establish a workgroup 

composed of physicians, home health representatives, and departmental designees, 

or utilize an existing workgroup such as the Practicing Physicians Advisory 

Council or the Physician Regulatory Issues Team to discuss issues related to 

Medicare home health care. We offer the following issues for consideration by the 

workgroup. 

-	 The need for more effective and widespread home health education for 

physicians; 

-	 Further clarification of payment and coverage policies, including the home 

health definitions for “homebound” and “medically necessary;” 

- The simplification of home health certification forms; 

-	 An analysis of the costs and benefits associated with the promotion of 

physician home visits; 

-	 The possibility of requiring home health agencies to employ medical 

directors; 

-	 The consideration of whether CMS oversight expectations of physicians can 

be realistically met; and, 

-	 The creation of a system enabling patients to appeal if they feel they are 

receiving inadequate care. 

The Physician’s Role in Medicare Home Health 2001 17 OEI-02-00-00620 
COMMENTS 

We received comments on our draft report from several physician and home health 

organizations: The American Academy of Home Care Physicians, The American College 

of Physicians-American Society of Internal Medicine, The American Medical Association, 

and The National Association for Home Care. These organizations generally agreed with 

our findings and recommendations. They also provided specific suggestions on how to 

increase physician understanding of the Medicare home health benefit and to promote 

further physician involvement with their home care patients. (We include these 

organizations' comments in full in Appendix E.) 

We also received comments on our draft report from the Centers for Medicare & 

Medicaid Services (CMS). The CMS concurred with our findings and also made a 

number of technical comments that we incorporated into the report when appropriate. In 

addition, CMS had two methodological concerns. First, they expressed concern that our 

sampling time frame did not include a long enough period of time when the prospective 

payment system (PPS) was in effect. We acknowledge that our work occurred in the early 

stages of PPS implementation. However, it is important to note that physician knowledge 

of PPS is only one issue among several that we sought to address. Second, CMS stated 

that our sample may be biased against respondents who have had enough experience 

signing plans of care. We were also concerned about this. Therefore, in our 

methodology we included only physicians who signed two or more home health plans of 

care during the 6 month sampling time frame. 

The Physician’s Role in Medicare Home Health 2001 18 OEI-02-00-00620 
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 Home Health Care,” OEI-02-94-00170, June 1995. 

Office of Inspector General, US Department of Health and Human Services, “Medicare 

Beneficiary Access to Home Health Agencies,” OEI-02-99-00530, October 1999. 

Office of Inspector General, US Department of Health and Human Services, “Medicare 

Beneficiary Access to Home Health Agencies 2000,” OEI-02-00-00320, September 2000. 

Office of Inspector General, US Department of Health and Human Services, “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. 

The Physician’s Role in Medicare Home Health 2001 19 OEI-02-00-00620 
APPENDIX B 

Chi-Square Test for Urban/Rural Differences 

We computed Chi-square values for differences in physicians’ geographical place of work. All 

variables were analyzed at the 95 percent confidence level. As shown in the table below, only two 

variables showed statistically significant differences. 

Chi-Square Values for Testing Significance 

of Geographic Place of Work 

Variable Percents 

Degrees of 

Freedom Chi-Square Probability Significant? 

Determination that patient 

needs home health: 

Physician 

Non-physician 

Rural Urban 

71% 57% 

29% 43% 

1* 4.45 .03 Y 

Preference of person 

responsible for oversight: 

Physician 

Non-physician 

Rural Urban 

68% 55% 

32% 46% 

1* 4.00 .05 Y 

Familiarity with patients 

prior to home health 

3 1.65 .65 N 

Time spent each month 

with a typical home health 

patient 

1* 2.48 .12 N 

Awareness of care plan 

oversight payment 

3 0.35 .95 N 

Knowledge of home health 

PPS 

1* 1.97 .06 N 

Ability to ensure patient is 

homebound 

3 5.56 .13 N 

* When testing for urban rural differences, response categories were combined in some 

instances in order to better understand any differences. 

The Physician’s Role in Medicare Home Health 2001 20 OEI-02-00-00620 
APPENDIX C 

Confidence Intervals For Key Findings * 

We calculated confidence intervals for key findings for physicians. The point estimate and 95 

percent confidence interval are given for each of the following: 

Key Findings N 

Point 

Estimate 

Virtually all physicians report that they have some 

familiarity with the patients for whom they sign a home 

health plan of care. 

343 97% +/- 1.8 

Over half report working jointly with home health 

agencies or hospital staff to determine services for their 

patients. 

343 55% +/- 5.3 

Almost all physicians see their patients at least once a 

month while they are receiving home health services. 

343 86% +/- 3.7 

Thirty-eight percent of physicians report that they are 

unclear on the Medicare criteria for "homebound." 

343 38% +/- 5.1 

Eighty-three percent of physicians believe that Medicare 

expects them to ensure that only medically necessary 

services are on the plan of care. 

343 83% +/- 4.0 

Only 48 percent of physicians believe they are able to 

ensure that only medically necessary services are on the 

plan of care. 

343 48% +/- 5.3 

Fifty-nine percent of physicians believe Medicare expects 

them to ensure that home health patients are homebound. 

343 59% +/- 5.2 

Twenty-six percent of physicians believe they are able to 

ensure that home health patients are homebound. 

343 26% +/- 4.6 

Of the physicians who are aware of the Fraud Alert, 24 

percent volunteer concerns about being held personally 

liable for well intentioned certifications of their patients’ 

home health care. 

84 24% +/- 9.1 

Twenty-five percent of physicians correctly report that 

physicians can be held liable for inappropriate 

certifications only when they knowingly sign false or 

misleading certifications. 

343 25% +/- 4.6 

* Note: The N values above include item non-respondents. Item non-respondents were included in the denominator 

used to calculate point estimates. These item non-respondents do not include those survey respondents who were 

instructed to skip the question at issue. In the majority of the findings above, item non-respondents numbered less 

than 10. 

The Physician’s Role in Medicare Home Health 2001 21 OEI-02-00-00620 
APPENDIX D 

Physician Non-Respondent Analysis 

We tested for the presence of any non-response bias in our sample. For this analysis, a physician 

who did not complete and return the survey is a non-respondent. We dropped six physicians from 

the overall sample who told us they did not sign plans of care. 

To test for non-response bias in our sample, we analyzed two variables which might influence 

whether an individual would respond to the survey or that might affect his or her responses: 

geographical place of work and the number of home health plans of care signed by the physicians 

within a given 6 month period. 

For the purpose of this analysis, geographical place of work was divided into urban and rural. For 

the number of home health plans of care signed within a given 6 month period, we divided the 

physicians into three categories: 

1. Physicians with an average of less than one plan of care signed a month, 

2. Physicians with an average of one but less than two plans of care signed a month, and 

3. Physicians with an average of two or more plans of care signed a month. 

These categorical variables were tested using Chi-square with the appropriate degrees of freedom. 

In order for the results to be statistically significant at the 95 percent confidence interval, the Chisquare value must be higher than 3.84 with 1 degree of freedom. 

The results of this analysis are presented in Tables A and B. The Chi-square values given in the 

tables provide a test of difference between the distribution of respondents and of non-respondents 

for the variable of interest. Also provided in the tables are the response rates by the different 

values of the variables. 

Tables A and B show no statistically significant differences between respondents and nonrespondents for either geographical place of work or the number of home health plans of care 

signed by the physicians. 

The Physician’s Role in Medicare Home Health 2001 22 OEI-02-00-00620 
Table A 

Geographical Place of Work* 

Respondents Non-Respondents Total Percent 

Urban 252 (46%) 193 (35%) 445 81% 

Rural 70 (13%) 37 (7%) 107 19% 

Total 322 230 552 58% 

Chi-square= 2.74 

Degrees of freedom= 1 

* The overall sample size is only 552 because there were no matches on the urban/rural indicator for 42 

physicians. 

Table B 

Average Home Health Plans of Care Signed a Month 

Respondents Non-Respondents Total 

< 1 /month 206 (35%) 139 (23%) 345 58% 

1-2 /month 83 (14%) 66 (11%) 149 25% 

> 2 /month 54 (9%) 46 (8%) 100 17% 

Total 343 251 594 58% 

Chi-square= 1.38 

Degrees of freedom= 2 

The Physician’s Role in Medicare Home Health 2001 23 OEI-02-00-00620 
APPENDIX E 

Comments 

In this appendix, we present in full the comments from the Centers for Medicare and Medicaid 

Services, the American Academy of Home Care Physicians, the American College of 

Physicians-American Society of Internal Medicine, the American Medical Association, and the 

National Association for Home Care. 

The Physician’s Role in Medicare Home Health 2001 24 OEI-02-00-00620