In 2006, 2.9 million Medicare beneficiaries received home health services. The home health benefits provides Medicare enrollees to access to services such as: skilled nursing care; physical, occupational, and speech therapy; medical social work, and home health aide services.
Medicare pays home health agencies (HHA) based on 60-day episodes of care. Each HHA receives a flat payment for all services rendered during this time period. There are some adjustments to the 60 day payment however. These adjustments include:
- Adjustments for geographic differences in the price of labor using the Medicare Wage Index,
- Case Mix Adjustment using Home Health Resource Groups (HHRGs)
- Outlier payments made for beneficiaries who incur unusually large costs
- If fewer than 5 visits are delivered during a 60-day episode, the HHA is paid per visit by visit type, rather than by the episode payment method.
- If a beneficiary switches home health providers during a 60 day episode, than the original HHA only receives only a partial payment of the 60-day prospective payment.
Today, I will briefly review how Medicare constructs the HHRG. A summary of the 5 components that make up the HIPPS code can be found here.
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