Initial home health outcomes under prospective payment

Area of Science:

• Health Services Research
• Health Economics
• Gerontology

Background:

• The Centers for Medicare and Medicaid Services (CMS) implemented the home health Prospective Payment System (PPS) in October 2000.
• This policy change aimed to standardize reimbursement and incentivize efficiency in home healthcare delivery.

Purpose of the Study:

• To evaluate the immediate effects of the home health Prospective Payment System (PPS) on patient outcomes and service utilization.
• To identify initial trends in patient functioning, discharge rates, and healthcare resource use following PPS implementation.

Main Methods:

• Utilized national data from the Outcome and Assessment Information Set (OASIS) and Medicare claims.
• Employed regression analysis on a large national random sample (n=164,810) to compare pre-PPS and early PPS periods.
• Constructed outcome episodes from OASIS data and linked them with Medicare claims for visit data.

Main Results:

• Risk-adjusted outcomes showed mixed but modest changes. Improvements were noted in functioning, dyspnea, community discharge rates, and reductions in hospitalization and emergent care.
• However, improvement rates decreased for wounds, incontinence, and cognitive/emotional/behavioral outcomes.
• Total visits per episode decreased by 16.6%, while therapy visits increased by 8.4%.

Conclusions:

• The Prospective Payment System (PPS) demonstrated improved system efficiency with fewer visits and comparable overall outcomes.
• Declines in specific improvement rates require continued monitoring, alongside post-home health hospitalization and emergent care utilization.
• Longer-term analyses are necessary to fully understand the sustained impact of the PPS.