A preliminary case-mix classification system for Medicare home health clients

In this study, a hierarchical case-mix model was developed for grouping Medicare home health beneficiaries homogeneously, based on the allowed charges for their home care. Based on information from a two-page form from 2,830 clients from ten states and using the classification and regression trees method, a four-component model was developed that yielded 11 case-mix groups and explained 22% of the variance for the test sample of 1,929 clients. The four components are rehabilitation, special care, skilled-nurse monitoring, and paralysis; each are categorized as present or absent. The range of mean-allowed charges for the 11 groups in the total sample was $473 to $2,562 with a mean of $847. Of the six groups with mean charges above $1,000, none exceeded 5.2% of clients; thus, the high-cost groups are relatively rare.