Recent developments in federal reimbursement for home health care

Important recent changes in federal reimbursement for home health-care (HHC) services are discussed, and practical suggestions for dealing with these changes are offered. Regulatory changes affecting Medicare are generally directed at controlling HHC expenditures through more restrictive coverage criteria and lower payment rates. Both HHC agencies and HHC suppliers have been affected by recent regulatory developments, many of which have emanated from the program initiative work group (PIW) cost-control program implemented by HCFA. Regulatory changes in Medicaid have emphasized the substitution of home care for institutional care, particularly skilled-nursing-facility care. Private payments for HHC will likely be tied to capitation programs in which employers will contract directly with health-care organizations (such as health-maintenance organizations) to provide comprehensive services to employees and dependents. Until capitation financing becomes predominant, providers of HHC will be forced to contend with myriad carriers and insurance companies, each of which has its own coverage criteria and its own method of interpreting those criteria. Provider success will depend upon obtaining timely and favorable coverage determinations for prospective patients, establishing strong referral ties with physicians and discharge planners, being selective in the scope of services offered and the types of patients accepted, and keeping abreast of the regulatory changes that affect coverage and payment for HHC products and services.