Rolling Back Medicare Home Health

The Balanced Budget Act (BBA) of 1997 included major changes to Medicare's home health benefit designed to control spending and promote efficient delivery of services. Using national data from Medicare home health claims, this study finds the initial effect of the BBA was to steeply reduce use of the home health benefit and intensify its focus on post-acute skilled nursing and therapy services. The striking responsiveness of home health agencies (HHAs) to altered financial incentives suggests that we may again see large shifts in patterns of care under the new incentives of Medicare's prospective payment system (PPS) for home health.