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Medicare: Home Health Utilization Expands While Program Controls Deteriorate

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Report Type Reports and Testimonies
Report Date March 27, 1996
Report No. HEHS-96-16
Subject
Summary:

Use of the Medicare home health benefit has increased dramatically, with spending rising from $2.7 billion in 1989 to $12.7 billion in 1994. Costs are projected to reach $21 billion by the year 2000. In earlier reports (GAO/HRD-81-155 and GAO/HRD-87-9), GAO cited lax controls over the use of the home health benefit and recommended measures to improve Medicare's ability to detect claims that were not medically necessary or did not meet the coverage criteria. Medicare's escalating home health outlays continue to raise concerns about the extent of benefit abuse. This report examines the factors underlying the growth in the use of the home health benefit. GAO discusses (1) changes in the composition of the home health industry, (2) changes in the composition of Medicare home health users, (3) differences in utilization patterns across geographic areas, (4) incentives to overuse services, and (5) the effectiveness of payment controls in preventing payments for services not covered by Medicare.

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