Medicare Home Health
Clarifying the Homebound Definition Is Likely to Have Little Effect on Costs and Access Gao ID: GAO-02-555R April 26, 2002Medicare's home health benefit provides skilled nursing and other services to beneficiaries who are homebound. The Department of Health and Human Services (HHS) had a long-standing policy that beneficiaries who regularly attend adult day care were not considered homebound, particularly if the purpose of attending was to receive nonmedical or custodial care. In 2000, Congress indicated that Medicare beneficiaries who attended adult day care could still be considered homebound if they still met the other homebound requirements. GAO found that this clarification will have little effect on program costs or access to services because the number of affected individuals is small. On the basis of National Long Term Care Survey data, GAO estimates that 0.2 percent of elderly Medicare beneficiaries who attended adult day care had mobility or cognitive impairments that might make some eligible for Medicare home health services.
GAO-02-555R, Medicare Home Health: Clarifying the Homebound Definition Is Likely to Have Little Effect on Costs and Access
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GAO-02-555R:
United States General Accounting Office:
Washington, DC 20548:
April 26, 2002:
Congressional Committees:
Subject: Medicare Home Health: Clarifying the Homebound Definition Is
Likely to Have Little Effect on Costs and Access:
About 2.5 million Medicare beneficiaries used home health services in
2000 at a cost of $8.7 billion”about 4 percent of Medicare
expenditures that year. Medicare's home health benefit provides
skilled nursing and other services to beneficiaries who are
"homebound," that is, able to leave home only with great difficulty
and for absences that are infrequent and of short duration.[Footnote
1] Based on this statutory requirement, the Department of Health and
Human Services (HITS) had a long-standing policy that beneficiaries
who regularly attended adult day care were not considered homebound,
particularly if the purpose of attending was to receive nonmedical or
custodial care. Adult day care centers offer a range of social,
medical, and other services to enrollees in a group setting.[Footnote
2] This policy created uncertainty about Medicare home health
eligibility for individuals receiving medical services at adult day
care centers because of HHS's premise that a homebound beneficiary was
unlikely to be able to leave home on a regular basis to seek necessary
medical treatment from a center.[Footnote 3]
In December 2000, the Congress specified that attending adult day care
would not disqualify Medicare beneficiaries from being considered
homebound if they still met the other homebound requirements.[Footnote
4] Specifically, the change provided that a beneficiary's eligibility
for home health was not affected by absences from the home to attend
adult day care, regardless of whether the beneficiary obtained medical
treatment or therapeutic and psychosocial services at the center. With
this change, however, there was some concern about a potential
associated increase in Medicare expenditures resulting from additional
numbers of individuals being able to access the home health benefit.
Thus, at the same time, the Congress directed us to evaluate the
effect of clarifying the homebound definition on the cost of and
access to Medicare home health services.
To respond to this mandate, we attempted to identify national data on
the numbers and costs of Medicare beneficiaries participating in adult
day care and receiving home health care both before and after the
effective date of the homebound definition clarification. Because such
data were not available, we used the 1999 National Long Term Care
Survey (NLTCS) to estimate the number of elderly Medicare
beneficiaries (65 years of age or older) who attended adult day care
and had mobility or cognitive impairments that could potentially make
them "homebound" and thus eligible for home health care. NLTCS is the
most current, nationally representative data available with
information on the number of elderly Medicare beneficiaries who (1)
"regularly" attend adult day care, (2) report mobility or cognitive
impairments, and (3) live in the community. (See enclosure 1 for a
more detailed discussion of the 1999 NLTCS and the methodology for
developing our estimates.) We also interviewed officials at (1) HHS,
including the Centers for Medicare and Medicaid Services (CMS), the
agency responsible for managing Medicare, and the Office of the
Assistant Secretary for Planning and Evaluation; (2) groups that
advocated the inclusion of language in the statute permitting Medicare
beneficiaries to attend adult day care without losing eligibility for
home health care, including the Alzheimer's Association, the National
Adult Day Services Association (NADSA), the National Association for
Home Care and a state affiliate, and the National Council on the
Aging; (3) the Center for Medicare Advocacy, which has represented
beneficiaries who were deemed ineligible for home health because of
their attendance at adult day care;[Footnote 5] and (4) Easter Seals,
which operates the largest nonprofit adult day care chain. We did our
work from December 2001 through April 2002 in accordance with
generally accepted government auditing standards.
In summary, clarifying the Medicare definition of homebound to allow
home health beneficiaries to participate in adult day care will likely
have little effect on overall program costs or access to services
because the number of affected individuals is probably small. On the
basis of NLTCS data, we estimate that, as of 1999, 0.2 percent of
elderly Medicare beneficiaries (61,000 to 72,000 individuals) attended
adult day care and had mobility or cognitive impairments that might
have made some eligible for Medicare home health services. Our
estimate does not include Medicare beneficiaries under age 65. In the
view of officials at CMS, advocacy groups, and other cognizant
associations we contacted, prior to the change, beneficiaries who were
told that their participation in adult day care would render them
ineligible for Medicare home health services were likely to have
forgone adult day care in order to avoid jeopardizing their
eligibility for home health services. Although some adult day care
centers may offer both health and personal care services, such
services are not covered by Medicare and are generally not a
substitute for and do not include the individualized care available
from a home health agency. Thus, officials from advocacy groups and
associations suggested that the homebound clarification was more
likely to increase the use of adult day care than the use of Medicare
home health services. In reviewing a draft of this correspondence, CMS
concurred with our findings.
Background:
Medicare's home health benefit enables certain beneficiaries with post-
acute-care needs (such as recovery from joint replacement) and chronic
conditions (such as congestive heart failure) to receive care in their
homes rather than in other settings. To qualify for home health care,
a beneficiary must be homebound and require intermittent skilled
nursing care, physical therapy, or speech therapy. In addition, the
beneficiary must be under the care of a physician, and the home health
services must be furnished under a plan of care ordered and
periodically reviewed by a physician. If these conditions are met,
Medicare will pay for part-time or intermittent skilled nursing;
physical, occupational, and speech therapy; medical social services;
and home health aide visits.[Footnote 6] A beneficiary who does not
need skilled care and requires only custodial or personal care does
not qualify for the benefit. There are no annual or lifetime limits on
home health care coverage as long as the beneficiary continues to meet
the eligibility criteria. According to the most recent data available,
about 6 percent of Medicare's nearly 40 million beneficiaries used
home health services in 2000. Historically, most beneficiaries have
received home health services for short periods of time, but according
to 1999 data about 6 percent were long-term users.[Footnote 7] Over 80
percent of home health users have one or more mobility limitations,
such as difficulty transferring from bed to chair or walking more than
two or three blocks.
Adult day care provides community-based social and health services to
adults of all ages who have physical or cognitive impairments. It can
also provide respite support for caregivers, allowing them to work or
pursue other activities. Services provided at adult day care centers
may include social services, counseling, personal care, meals,
transportation, nursing care, therapeutic activities, and
rehabilitation therapies”including speech, occupational, and physical
therapy. Even though some centers have nursing staff, they generally
do not provide the level of skilled care available through a home
health agency. Services may be provided during any part of the day for
fewer than 24 hours, but most centers operate during normal business
hours 5 days a week. According to preliminary findings from ongoing
research, approximately 3,500 centers exist nationwide.[Footnote 8]
The most current information on adult day care participants, a 1997
survey conducted by NADSA, found that their average age was 76, two-
thirds were women, and one-quarter lived alone.[Footnote 9] One-half
of the participants surveyed were cognitively impaired, one-third
required nursing services at least weekly, and over half required
assistance with two or more activities of daily living (ADL).[Footnote
10] Funding for adult day care services comes from a variety of
sources. While Medicare does not pay for adult day care, federal
support is available through Medicaid and other sources, such as
programs funded by HHS or the Department of Veterans Affairs.[Footnote
11] Additional funding sources include state and local governments,
philanthropic organizations, participant contributions, and private
long-term care insurance. Adult day care centers are not required to
meet any federal standards but many states either license or certify
centers.
Number Of Medicare Beneficiaries Who Regularly Attend Adult Day Care
And May Meet The Homebound Definition Is Probably Very Small:
Based on our analysis of NLTCS data, the impact of the homebound
definition clarification on Medicare home health costs and access is
likely to be very small. We estimate that, as of 1999, 0.2 percent
(between 61,000 and 72,000) of the 34 million elderly Medicare
beneficiaries regularly attended adult day care and were potentially
"homebound" because of mobility or cognitive impairments. (See table
1; enclosure 1 describes the mobility and cognitive impairments we
analyzed.) These potentially homebound individuals were about one-
third of the estimated 208,000 elderly Medicare beneficiaries who
regularly attended adult day care and about 2 to 3 percent of all
beneficiaries who received Medicare home health care in 2000.
Table 1: Estimate of Elderly Medicare Beneficiaries Who Regularly
Attended Adult Day Care and Who Were Potentially Homebound, 1999:
Category: Regularly attended adult day care;
Estimate of elderly Medicare beneficiaries:
Number: 208,000[A];
Percentage (of 34 million): 0.6%.
Category: Potentially homebound: regularly attended adult day care and
had at least one mobility or cognitive impairment;
Estimate of elderly Medicare beneficiaries:
Number: 61,000[B] to 72,000[C];
Percentage (of 34 million): 0.2%.
[A] The 95 percent confidence interval ranges from 108,000 (0.3
percent) to 307,000 (0.9 percent).
[B] The 95 percent confidence interval ranges from 39,000 (0.1
percent) to 83,000 (0.2 percent).
[C] The 95 percent confidence interval ranges from 48,000 (0.1
percent) to 97,000 (0.3 percent).
Source: GAO analysis of 1999 NLTCS.
[End of table]
The proportion of elderly Medicare beneficiaries with mobility or
cognitive impairments who attended adult day care and who actually
qualified for home health might be lower than 0.2 percent. Adult day
care attendance might indicate that their impairments were not severe
enough at the time to confine such beneficiaries to their homes. In
fact, officials from advocacy groups and associations told us that the
homebound clarification is more likely to increase the use of adult
day care than the use of Medicare home health services. When faced
with the choice between adult day care or home health services before
the homebound definition clarification, we were told consistently that
beneficiaries were likely to have forgone adult day care in order to
qualify for Medicare-covered home health services. In addition, adult
day care often does not provide the individualized skilled care
typically available through home health, and beneficiaries may have to
pay for adult day care, which is not covered by Medicare. Medicare
home health services, on the other hand, have no associated out-of-
pocket costs. However, there might have been a small group of
beneficiaries that chose adult day care over home health services. An
official with a state home health association suggested that some of
the potential new home health users might be beneficiaries with
limited skilled-care needs who had been unwilling to give up adult day
care because of the perceived value to themselves or their caregivers
and because it was available for the entire day. Now such
beneficiaries may receive home health services in addition to
attending adult day care.
Our estimate does not include nonelderly disabled Medicare
beneficiaries who might qualify for home health care. Nonelderly
Medicare beneficiaries number about 5 million or 13 percent of the
total Medicare population. No data source on adult day care
participation by this group of Medicare beneficiaries could be
identified.
Agency Comments:
CMS reviewed a draft of this correspondence and concurred with our
approach to identifying the beneficiaries affected by the homebound
definition clarification and with our finding that the impact on
Medicare costs and access is likely limited because this group of
beneficiaries is probably very small. CMS's comments are included in
enclosure 2.
We are sending copies of this letter to the Administrator of CMS and
interested congressional committees. This letter is also available on
GAO's home page at [hyperlink, http://www.gao.gov].
If you or your staffs have any questions, please call me at (202) 512-
7118 or Walter Ochinko at (202) 512-7157. Other major contributors to
this correspondence include Connie Peebles Barrow, Beth Cameron
Feldpush, Dean Mohs, and Jeffrey Schmerling.
Signed by:
Kathryn G. Allen:
Director, Health Care”Medicaid and Private Health Insurance Issues:
Enclosures:
List of Committees:
The Honorable Max Baucus:
Chairman:
The Honorable Charles E. Grassley:
Ranking Minority Member:
Committee on Finance:
United States Senate:
The Honorable W.J. "Billy" Tauzin:
Chairman:
The Honorable John D. Dingell:
Ranking Minority Member:
Committee on Energy and Commerce:
House of Representatives:
The Honorable William M. Thomas:
Chairman:
The Honorable Charles B. Rangel:
Ranking Minority Member:
Committee on Ways and Means:
House of Representatives:
[End of section]
Enclosure 1: Methodology For Estimating Impact of Homebound Definition
Clarification Using The 1999 NLTCS:
NLTCS, a nationally representative survey of elderly Medicare
beneficiaries, is conducted every 5 years by Duke University's Center
for Demographic Studies under sponsorship by HHS's Office of the
Assistant Secretary for Planning and Evaluation and the National
Institute on Aging of the National Institutes of Health. The 1999
survey included 19,907 Medicare beneficiaries aged 65 or older.
[Footnote 12] All beneficiaries were screened to identify those who
were functionally impaired. Beneficiaries were considered impaired if
they had difficulty with at least one ADL or instrumental activity of
daily living (IADL).[Footnote 13] The 6,183 beneficiaries identified
as functionally impaired were asked to complete a detailed survey that
included questions on topics such as their health, functional status,
social activities, nutrition, health insurance, housing
characteristics, and demographic characteristics. Among those
identified as impaired, 1,036 resided in nursing homes and the
remaining 5,147 lived in the community. Beneficiaries in this last
group were asked if they regularly attended adult day care. Of the
5,147 beneficiaries who lived in the community, 52 indicated that they
regularly attended adult day care.
We used mobility and cognitive impairments to identify the potentially
homebound subset of 52 beneficiaries who reported that they regularly
attended adult day care. Many Medicare home health users have mobility
impairments that may lead to an individual's becoming homebound. In
addition, cognitive and mental conditions may confine beneficiaries to
the home. First, we determined how many of the 52 beneficiaries had
mobility impairments and then separately examined how many had either
mobility or cognitive impairments. The mobility impairments we
selected included three ADLs (getting in or out of bed, getting around
inside, and getting to the bathroom and using the toilet) and one IADL
(getting around outside) that also measures mobility.[Footnote 14]
Inclusion of the IADL raised the threshold of impairment, as 37 (71.2
percent) of the 52 adult day care respondents had an impairment in at
least one of the four mobility ADLs and the IADL, while only 28 (53.8
percent) had at least one impairment when the IADL was excluded (see
table 2). We selected three IADLs that may indicate cognitive
limitations”managing money, making telephone calls, and taking
medication. As shown in table 2, including these three IADLs in our
analysis increased to 43 (82.7 percent) the number of adult day care
users who had at least one of seven mobility or cognitive impairments.
We used the range of 37 to 43 beneficiaries as the upper threshold to
estimate that about 61,000 to 72,000 elderly Medicare beneficiaries
who regularly attended adult day care in 1999 were potentially
"homebound" and thus might have been eligible for Medicare home health.
Table 2: Mobility and Cognitive Impairment of the 52 Adult Day Care
Users from the 1999 NLTCS:
Category: At least one of three mobility impairments[A];
Number: 28;
Percentage (of 52): 53.8%.
Category: At least one of four mobility impairments[B];
Number: 37;
Percentage (of 52): 71.2%.
Category: At least one of seven mobility or cognitive impairments[C];
Number: 43;
Percentage (of 52): 82.7%.
[A] Getting in and out of bed, getting around inside, and getting to
the bathroom and using the toilet.
[B] Getting in and out of bed, getting around inside, getting to the
bathroom and using the toilet, and getting around outside.
[C] The measures of cognitive impairment were managing money, making
telephone calls, and taking medication. We used the same four mobility
impairments described in the preceding text.
Source: GAO analysis of 1999 NLTCS.
[End of table]
[End of section]
Enclosure 2: Comments From The Centers For Medicare And Medicaid
Services:
Department Of Health & Human Services:
Centers for Medicare & Medicaid Service:
Administrator:
Washington, DC 20201:
April 23, 2002:
To: Kathryn G. Allen:
Director, Health Care”Medicaid and Private Health Insurance Issues:
General Accounting Office:
From: [Signed by] Thomas A. Scully:
Administrator:
Centers for Medicare & Medicaid Services:
Subject: General Accounting Office (GAO) Draft Correspondence,
Medicare Home Health: Clarifying the Homebound Definition Is Likely to
Have Little Effect on Costs and Access, (GAO-02-555R):
Thank you for sending the above-referenced report to us for comments.
We appreciate GAO's review of the effect of clarifying the homebound
definition on the cost of, and access to, Medicare home health care.
We concur with the findings in the GAO report. We agree that
clarifying the Medicare definition of homebound to allow home health
beneficiaries to participate in adult day care will likely have little
effect on overall program costs or access to services. As indicated in
your report, this result is expected because the number of affected
individuals is probably very small. However, as reported by the news
media, CMS has directed Medicare contractors to remove any claims
edits that would deny claims for covered services for individuals
diagnosed with Alzheimer's Disease. This action reinforces Medicare's
commitment to making sure that beneficiaries with Alzheimer's Disease
receive the care to which they are entitled under Medicare.
According to current law, in order to be eligible for home health
services, a beneficiary must: (1) need intermittent skilled nursing
care, or physical therapy, speech therapy, or continue to need
occupational therapy; (2) be "homebound" (e.g., normal inability to
leave); (3) be under a plan of care established and periodically
reviewed by a physician; and (4) receive the services from a Medicare
participating home health agency.
The change in the statute recognizes that a beneficiary's eligibility
for home health is not affected by absences from the home to attend
adult day care.
We believe that GAO has taken appropriate steps to identify this
population and has arrived at a reasonable assumption that this
population is likely to be very small.
We look forward to working with GAO on this and other issues in the
future.
[End of section]
Footnotes:
[1] Permitted absences include obtaining necessary medical care such
as physician visits and treatment at a hospital, extended care
facility, or rehabilitation center when the required medical equipment
is too cumbersome to bring to the beneficiary's home.
[2] Adult day care is not a Medicare-covered service and Medicare will
not pay home health agencies for services delivered in an adult day
care center. However, a small amount of Medicare funding supports
adult day care through programs such as the Program for All-Inclusive
Care for the Elderly, known as PACE. See U.S. General Accounting
Office, Medicare and Medicaid: Implementing State Demonstrations for
Dual Eligibles Has Proven Challenging, [hyperlink,
http://www.gao.gov/products/GAO/HEHS-00-94] (Washington, D.C.: Aug.
18, 2000).
[3] HHS, Homebound: A Criterion for Eligibility for Medicare Home
Health Care (Washington, D.C.: Apr. 1999).
[4] Medicare, Medicaid, and SCRIP Benefits Improvement and Protection
Act, P.L. 106-554, §507 114 STAT. 2763A-532, 2763A-533 (Dec. 21,
2000). The change became effective on December 21, 2000.
[5] The center is a nonprofit organization that represents individual
Medicare beneficiaries in Connecticut and serves as an advocate for
Medicare beneficiaries throughout the country.
[6] Skilled nursing and home health aide services may only be provided
on a part-time or intermittent basis, that is, the services must be
furnished fewer than 8 hours each day and for 28 or fewer hours each
week. However, subject to review on a case-by-case basis, a
beneficiary may receive up to 35 hours of care per week, or up to and
including 8 hours per day, 7 days per week, for temporary periods up
to 21 days or longer in exceptional circumstances.
[7] U.S. General Accounting Office, Medicare Home Health Care:
Prospective Payment System Could Reverse Recent Declines in Spending,
[hyperlink, http://www.gao.gov/products/GAO/HEHS-00-176] (Washington,
D.C.: Sept. 8, 2000).
[8] Under contract with the Robert Wood Johnson Foundation, Wake
Forest University is collecting comprehensive data on the
characteristics of adult day care centers and the individuals they
serve. The final census of adult day care centers, including
characteristics of participants and financing sources, will be
available later in 2002.
[9] Because the survey had a response rate of about 45 percent, these
figures may not reflect the characteristics of all adult day care
participants.
[10] ADLs are self-care activities, including bathing, dressing,
eating, getting around inside, getting in and out of bed, and
toileting.
[11] Medicaid, jointly funded by states and the federal government,
provides health care for certain low-income individuals. With approval
from CMS, states can provide a variety of social services and supports
to elderly and disabled individuals under Medicaid waivers. See U.S.
General Accounting Office, Adults With Severe Disabilities: Federal
and State Approaches for Personal Care and Other Services, [hyperlink,
http://www.gao.gov/products/GAO/HEHS-99-101] (Washington, D.C.: May
14, 1999).
[12] Younger beneficiaries who qualify for Medicare because of
disabilities or because they have end-stage renal disease are not
included in the survey.
[13] The ability to carry out more complex self-care tasks involving
higher levels of physical and cognitive functioning are assessed by
IADLs”getting around outside; going places outside of walking
distance; doing housework or laundry; making phone calls; managing
money; preparing meals; shopping for groceries; and taking medicine.
[14] Other ADLs, such as dressing, are much less likely to result in
an individual's being homebound.
[End of section]
