Impact of new legislation continues for home health

Background checks, homebound evaluated by HR 1

[Editor’s note: This is the second of a two-part article that looks at the challenges faced by home health managers. In the first article, challenges were identified and the impact of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (HR 1) was discussed. This month’s article looks at demonstration projects included in HR 1 that affect the home health industry.]

In addition to the reduction of the marketbasket update, extension of the rural add-on, and elimination of the home health copayment, HR 1 also calls for demonstration projects that will affect home health hiring practices, definition of homebound patients, and collaboration with adult day care, says Ann B. Howard, director of federal policy for the American Association for Homecare in Alexandria, VA. New procedures and programs include:

• Employee background checks

One 10-state pilot project that will run for three years requires a criminal background check on home health employees, Howard points out. In addition to state licensure checks and confirmation of previous employment, home health managers would need to check state and federal databases for criminal backgrounds as well as the Office of Inspector General and General Services Administration web sites to see if potential employees have been excluded from Medicare program participation, she adds.

This project is an important one to watch because there are a number of concerns for home health, she says. "Not only will this requirement add to the expense of hiring new employees but it adds time to the hiring process," Howard explains. Because criminal background checks can take time, home health managers are concerned that their agencies will have to operate short-staffed for longer periods of time, even when a qualified candidate is available, she adds.

• Payments linked to outcomes

Another project that ultimately could affect a home health agency’s bottom line is a three-state project that will look at linking outcomes to reimbursement, she continues. This project focuses on patients with chronic conditions and evaluates indicators that can be used to reimburse agencies with better outcomes at a higher rate, Howard says.

• Redefinition of homebound status

A three-state, two-year demonstration project will evaluate the impact on Medicare of further loosening the homebound definition for 15,000 younger beneficiaries who can leave their homes for visits to locations such as adult day care centers but still need help with activities of daily living, says Seth Johnson, director of public policy for the American Association for Homecare. "If the definition is loosened, home health agencies and adult day care centers will benefit from affiliations and even joint ownership," he says. If implemented, the new definition may result in increased numbers of patients eligible for home health services, Johnson adds.

[For more information on the Medicare Prescription Drug Improvement and Modernization Act of 2003 and its impact on home health, contact:

• Ann B. Howard, Director of Federal Policy, American Association for Homecare, 625 Slaters Lane, Suite 200, Alexandria, VA 22314-1171. Phone: (703) 535-1891. Fax: (703) 836-6730. E-mail:]