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. 1998 Fall;20(1):83–126.

Figure 21. Expenditure Growth for Total and Medicare Home Health: Calendar Years 1990-97.

Figure 21

The 1997 record slow growth in spending for home health care was heavily influenced by Medicare spending.

  • Expenditures for home health care delivered by freestanding facilities reached $32.3 billion in 1997. This was one of the smallest, and until recently, one of the fastest growing components of NHE. Since 1990 growth in spending for home health care has decelerated from 28.2 percent to 3.7 percent.
  • Because Medicare finances 40 percent of home health care, steps to control Medicare spending contributed heavily to the overall spending slowdown for home health care. The 1993 Omnibus Budget Reconciliation Act placed a temporary moratorium on updates to the home health per visit cost limits. More recently Medicare instituted payment policy changes. Effective October 1997, the BBA changed Medicare payment rates for home health care by reducing Medicare per visit cost limits and by mandating payment of the lowest of three possible payment amounts: actual cost, per visit limit, or an aggregate agency-specific per beneficiary annual limit. Also, as part of Medicare's fraud and abuse detection activities, a moratorium was placed on the entry of all new home health agencies, which was in effect from September 1997 to January 1998.