Abstract
The following summary is of a report from the Secretary of Health and Human Services released to Congress on January 19, 1989.
Legislative mandate
Section 6(e) of Public Law 97-414 states:
“(1) The Secretary of Health and Human Services shall develop and carry out demonstration projects commencing no later than January 1, 1984, to test … alternative reimbursement methodologies for home health agencies in order to determine the most cost-effective and efficient way of providing home health services. …
(4) The Secretary shall report to Congress his findings with regard to the demonstrations carried out under paragraph (1) no later than January 1, 1985.”
Overview
This report was prepared in part by Abt Associates, Inc., under a contract with the Health Care Financing Administration (HCFA). Described in the report are a number of payment methods that have been explored by HCFA in demonstration projects and design efforts. The report has been delayed beyond the date specified by Congress because HCFA originally planned to base the report on a demonstration project testing prospective payment of home health agencies (HHA's). Because of research design questions and changes in research priorities, the implementation of this demonstration was delayed and eventually cancelled.
Although there has been considerable interest in alternatives to the current retrospective cost reimbursement that is used to pay for Medicare home health services, and especially prospective payment for HHA's, limitations on existing data bases have slowed efforts to develop home health case-mix measures that are essential for the design of sophisticated prospective payment methodologies. HCFA has, however, explored a broad range of alternative approaches, including prospective payment for HHA's, competitive bidding by HHA's, capitation, and bundling of payment for hospital and post-hospital services. These initiatives have helped to identify important issues that must be considered when developing any alternative reimbursement system. Research is under way that will address those issues that must be resolved before more rigorous payment methodologies can be designed. Further, the Omnibus Budget Reconciliation Act of 1987 now requires the conducting of a demonstration of alternative methods of prospective payment for HHA's. We intend to proceed with the implementation of this demonstration and submit additional reports to Congress as the legislation requires. This demonstration should provide useful information about the impacts of alternative payment approaches.
Program contact
For further information:
Mr. William Saunders
Office of Research and Demonstrations
Health Care Financing Administration
Room 2-F-5 Oak Meadows Building
6325 Security Boulevard
Baltimore, Maryland 21207
Telephone (301) 966-6660