Medicare Home Health Agencies

As a result of changes to Medicare during the 1980s, more people are receiving home health services for longer periods of time. This has led to rapid growth in the number of certified home health agencies--from 5,700 in 1989 to nearly 10,000 at the beginning of 1997. During this same period, Medicare payments for home health care jumped from $2.7 billion to about $18 billion. These payments are projected to reach nearly $22 billion in fiscal year 1998. GAO testified that it is simply too easy for home health agencies to become certified. The certification of a home health agency as a Medicare provider is based on an initial survey that takes place soon after the agency begins operating, and there is little assurance that the home health agency is providing quality care. And because the requirements are minimal, Medicare certifies nearly all home health agencies seeking certification. Although many home health agencies are drawn to the program with the intent of providing quality care, some are attracted by the relative ease with which they can become certified and participate in this lucrative, growing industry. Once certified, home health agencies are unlikely to be terminated from the program or otherwise penalized, even when they have been repeatedly cited for substandard care or failure to meet Medicare's conditions for participation.

GAO noted that: (1) it is finding that Medicare's survey and certification process imposes few requirements on HHAs seeking to serve Medicare patients and bill the Medicare program; (2) the certification of an HHA as a Medicare provider is based on an initial survey that takes place so soon after the agency begins operating that there is little assurance that the HHA is providing or capable of providing quality care; and (3) moreover, once certified, HHAs are unlikely to be terminated from the program or otherwise penalized, even when they have been repeatedly cited for not meeting Medicare's conditions of participation and for providing substandard care.