Medicare maximization by state Medicaid programs: effects on Medicare home care utilization

Area of Science:

• Health Services Research
• Public Health Policy
• Medicare and Medicaid Studies

Background:

• Medicaid programs in certain states have explored retrospective billing to transfer home health care expenses to Medicare.
• This practice particularly impacts dual-eligible beneficiaries who are covered by both Medicare and Medicaid.

Purpose of the Study:

• To investigate if retrospective billing by state Medicaid programs influences Medicare utilization among dual-eligible individuals.
• To quantify the impact of retrospective billing on the probability and volume of Medicare home care visits.

Main Methods:

• Analysis of primary data from 47 state Medicaid offices regarding retrospective billing practices.
• Integration of individual-level secondary data from the 1992-1997 Medicare Current Beneficiary Survey.
• Application of an individual-level random effects model to assess the relationship between billing practices and Medicare utilization.

Main Results:

• Retrospective billing practices were found to have no statistically significant effect on the probability or amount of Medicare home care visits.
• A significant inverse relationship was observed between Medicaid and Medicare home care visits.
• States with high Medicaid utilization present opportunities for shifting home care costs to Medicare.

Conclusions:

• Retrospective billing by Medicaid does not appear to increase Medicare home care utilization directly.
• The findings suggest that cost-shifting opportunities exist for states with high Medicaid home care usage.
• Further research is needed to understand the dynamics of cost allocation between Medicare and Medicaid for home health services.