The Impact of Policy on Nursing and Allied Health Services: Lessons from the Medicare Home Health Benefit

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This article analyzes changes in Medicare home health staffing and service delivery patterns across three different reimbursement methods: cost based (1996), interim payment system (IPS) (1999), and the prospective payment system (PPS) (2002). This study combined secondary analysis of existing data (Provider of Services File and Statistical Supplement) with qualitative interviews of 22 home health agency directors to understand agency responses to policy changes created under the Balanced Budget Act of 1997. Cuts in staff and visits were greater under the IPS than they were under the PPS. Agencies cut staff and visits more dramatically for nonskilled services across both time periods. As a proportion of total services and visits, nursing and therapy services increased the most. Directors used various strategies to sustain the agency financially during these dramatic cuts in reimbursements, including eliminating staff, shifting staff roles, training staff on reimbursement methods, increasing use of telephone monitoring, increasing patient and family education and self-care, and cutting services to patients. Directors expressed concerns about staff stress related to the changes and the need to increase productivity without increasing staff. However, directors also believed the agency's position would improve under the PPS. Additional research is needed to determine whether increased staff stress, work demands, and fewer resources for patients will affect the quality of care delivered and, thus, patient outcomes under the PPS.