Medicare Home Health Benefit Elements and a Roadmap for Value-based Incentive Payments

The Medicare home health benefit provides coverage for home visits by skilled health care professionals. To be eligible for the home health benefit, a beneficiary must meet three different criteria. The beneficiary must (1) be homebound, (2) require intermittent skilled nursing care and/or skilled rehabilitation services, and (3) be under the care of a physician who has established that the home health visits are medically necessary in a 60-day plan of care. A beneficiary who meets these requirements is entitled to a 60-day episode of Medicare coverage for home health visits, and is then entitled to an unlimited number of 60-day episodes so long as he or she continues to meet the eligibility requirements. There is no cost-sharing requirement for home health services. Roughly 9.6% of Medicare fee-for-service (FFS) beneficiaries (or 3.4 million individuals) used home health services in 2010. Home health services are provided through home health agencies (HHAs), most of which (90%) are freestanding -- HHAs not affiliated with an institution such as a hospital or a nursing facility. The number of HHAs participating in Medicare grew by 57% between 2000 and 2010 (from 7,528 to roughly 11,800), with a vast majority of the increase in for-profit freestanding HHAs. This book describes home health eligibility criteria, home health services, characteristics of Medicare beneficiaries who use home health services, and home health providers. Further, this book describes in detail the Medicare home health prospective payment system (HH PPS), provides an overview of Medicare home health payments, and discusses issues for Congress related to the Medicare home health benefit.