Financing home health-care products and services

Abstract

Factors affecting growth of the home health-care (HHC) industry are identified, basic principles of HHC product and service reimbursement are reviewed, and third-party payer coverage criteria and payment methods for HHC products and services are discussed. Reimbursement for HHC services has suffered from the absence of a financing mechanism for long-term care. Providers of HHC services are burdened by the laborious process of obtaining favorable coverage determinations for short-term-care patients when home care substitutes for institutional care. When home care is covered benefit, there is often a complex mix of confusing coverage rules, coverage criteria that differ among public and private payers, and interpretations of coverage criteria that differ among local carrier personnel. Private financing obstacles and federal budget deficits will deter the development of an adequate financing mechanism for HHC. The growth of health-maintenance organizations and competitive medical plans will help to reduce reimbursement complexity. Long-term changes in HHC financing may become less important if capitation payment is successful.