Hospital-based and freestanding home health case mix: implications for medicare reimbursement policy

This project assessed case mix differences between 299 hospital-based and 354 freestanding clients randomly selected from 20 home health agencies in nine states in 1982. Similarities between hospital-based and freestanding clients outweighed their differences, suggesting that no reimbursement differential is warranted for the two types of providers at this time. Medicare's prospective payment system for hospitals may result in more pronounced case mix differences between the two modalities in the future. Basing payment on case mix is therefore appropriate in order to provide incentives for treating different types of Medicare home health beneficiaries.