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Changes in Regional Variation of Medicare Home Health Care Utilization and Service Mix for Patients Undergoing Major Orthopedic Procedures in Response to Changes in Reimbursement Policy

Background. Significant variation in regional utilization of home health (HH) services has been documented. Under Medicare's Home Health Interim and Prospective Payment Systems, reimbursement policies designed to curb expenditure growth and reduce regional variation were instituted.

Objective. To examine the impact of Medicare reimbursement policy on regional variation in HH care utilization and type of HH services delivered.

Research Design. We postulated that the reimbursement changes would reduce regional variation in HH services and that HH agencies would respond by reducing less skilled HH aide visits disproportionately compared with physical therapy or nursing visits. An interrupted time-series analysis was conducted to examine regional variation in the month-to-month probability of HH selection, and the number of and type of visits among HH users.

Subjects. A 100 percent sample of all Medicare recipients undergoing either elective joint replacement (1.6 million hospital discharges) or surgical management of hip fracture (1.2 million hospital discharges) between January 1996 and December 2001 was selected.

Results. Before the reimbursement changes, there was great variability in the probability of HH selection and the number of HH visits provided across regions. In response to the reimbursement changes, though there was little change in the variation of probability of HH utilization, there were marked reductions in the number and variation of HH visits, with greatest reductions in regions with highest baseline utilization. HH aide visits were the source of the baseline variation and accounted for the majority of the reductions in utilization after implementation.

Conclusions. The HH interim and prospective payment policies were effective in reducing regional variation in HH utilization.

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