Number: RL31420
Title: Medicare's Home Health Benefit: The Fifteen Percent Payment Cut
Authors: Carolyn L. Merck, Domestic Social Policy Division 
Abstract: In the Balanced Budget Act of 1995, Congress sought to curtain annual increases in home health spending by requiring implementation of a prospective payment system (PPS) under which home health agencies would be paid fixed amounts per episode of acre for an individual beneficiary. PPS payments were to be calculated so that, in the first year of the PPS (FY2001), home health spending totals would be the same as under the previous system but the cost of the old system would be calculated to include a 15-percent cut to its limits on payments per visit and per beneficiary. According the Congressional Budget Office (CBO), repeal of the 15-percent reduction would eliminate $5.2 billion in savings estimated to result from the cut for the 5-year period FY2003 through FY2007, and $16.3 billion over a 10-year period.
Pages: 9
Date: Updated October 17, 2002