Full Citation
Title: The Effects of Medicare Home Health Outlier Payment Policy Changes on Older Adults with Type 1 Diabetes
Citation Type: Miscellaneous
Publication Year: 2012
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Abstract: There have been struggles to find a reimbursement system that achieves a seemingly self-contradictory goal: providing high quality care while minimizing costs. This is exemplified by Medicare home health cares introduction of the 10 percent per-agency cap on outlier payments in 2010. This policy restricts total outlier payments for each home health agency to no more than 10 percent of that agencys total prospective payments from Medicare each year. While the intention of this cap is to control excessively increasing outlier payments, it can ultimately produce undesirable incentives. In essence, the 10 percent cap could penalize agencies that accepted and treated clinically complex, and thus costly patients. To address this issue, using the Medicare Claims and Provider of Services File from 2008 to 2010, this study focuses on Medicare home health patients with type 1 diabetes and examines how these patients were affected by the 10 percent cap. This study finds that the 10 percent cap decreased the intensity of home health service visits for type 1 diabetes patients dramatically. However, the 10 percent cap did not change type 1 diabetes patients likelihood of being dropped from home health care, hospitalized, transferred to another agency, or admitted to a nursing home. These findings seem to suggest that the 10 percent cap encouraged agencies to provide more efficient care because the reduction in the amount of care did not translate to a worse health outcome among type 1 diabetes patients. However, due to the limited availability of the data, I was able to examine only the first year after the implementation of the 10 percent cap. Thus, these findings are not conclusive given that it might take a relatively long time for a patients health status to be affected by a change in the amount of care.
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Authors: Kim, Hyunjee
Publisher: University of Michigan
Data Collections: IPUMS CPS
Topics: Health
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