Proprietary HHAs are private, for-profit agencies. 1). Medicare Beneficiaries Receiving More Home Health Services

Since the Medicare Home Health Agency Manual and Medicare Intermediary Manual changes of 1989, the percentage of Medicare beneficiaries receiving home health services and the number of home health visits received per year per home health user have increased significantly. In 1989, 1.7 million beneficiaries (5.6 percent of the Medicare population) received home health care. From 1989 through 1993, the average number of visits received per year more than doubled, from 26 to 57 visits. 2). Most of the increase in visits has resulted from an increased use of skilled nursing (average visits increased from 15 per year in 1989 to 26 visits per year in 1993) and home health aide visits (average visits increased from 25 visits per year for beneficiaries who received any aide visits in 1989 to 56 visits per year in 1993). 3). The number of Medicare-certified HHAs increased from 5,692 in 1989 to 7,864 at the end of 1994. This increased percentage of proprietary agencies was responsible for 83 percent of the growth in the number of HHAs between 1989 and 1994. 4). Little Medical Review Is Done

The regional home health intermediaries are responsible for procedures to assure that they only make payments for home health services that are covered by Medicare and avoid paying for services that are (1) provided to beneficiaries who do not meet Medicare home health criteria, (2) not reasonable or medically necessary, or (3) in excess of the services called for by the approved plan of treatment. HCFA Striving to Address Problems

In response to the changing climate surrounding home health care, the Administrator of HCFA convened an internal task force in the spring of 1994 (the Medicare Home Health Initiative) to examine the home health benefit from both a policy and an operations perspective. And we reviewed studies related to home health benefit utilization and control issues. 4, 1983).
Why GAO Did This Study

Pursuant to a congressional request, GAO examined the growth in the use of Medicare home health benefits, focusing on the: (1) changes in the home health industry; (2) composition of Medicare home health users; (3) differences in utilization of home health benefits across geographic areas; (4) incentives to overuse Medicare home health benefits; and (5) effectiveness of payment controls in preventing payment for services not covered by Medicare.

What GAO Found

GAO noted that: (1) the growth in Medicare's home health benefits resulted from less restrictive Health Care Financing Administration (HCFA) guidelines issued in 1989; (2) 2.8 million Medicare beneficiaries received home health services in 1993, up from 1.7 million in 1989; (3) during the same period, the average number of home health care visits doubled from 26 visits per year in 1989 to 57 visits per year in 1993; (4) more than 25 percent of home health beneficiaries received at least 60 visits per year; (5) between 1989 and 1994, the number of Medicare-certified home health agencies grew from 5,692 to 7,864; (6) proprietary home health agencies provided beneficiaries with 78 visits per year, while voluntary and government agencies provided beneficiaries with 46 visits per year; (7) home health beneficiaries with the same diagnosis received more visits from proprietary agencies than from non-profit agencies; and (8) Medicare's home health services can be improved by subjecting claims to medical review and audit, requiring visits from intermediaries and physicians to beneficiaries, and determining whether beneficiaries are qualified for such service, and actually need or receive the service billed to Medicare.