The home health visit: an appropriate unit for Medicare payment?

To contain costs and increase incentives for efficient provision of care, prospective payment methods are being proposed for Medicare home health services. Although a shift to per episode payment is much discussed, the methods rely on the home health visit as a fundamental building block in setting rates and ceilings. Some propose setting fixed per visit prices in the interim until episode payment can be developed. Findings from the evaluation of a Health Care Financing Administration (HCFA) demonstration of per visit payment suggest that this could shorten to the length of visits provided to Medicare beneficiaries. Because of home health agencies' discretion over visit length, we question whether the visit is the appropriate basic unit for developing prospectives payment methods for Medicare home health.