Report questions ethics of home health referrals
Hospital ownership drives down LOS, feds say
A new report from the agency that polices Medicare casts further suspicion on hospitals that discharge patients to their own home health agency (HHA). That could mean more headaches for hospital discharge planners, experts say.
According to the report, patients in hospitals that own an HHA are discharged earlier than patients in hospitals that do not own an HHA. The implication is that hospitals that own postacute services - such as HHAs, nursing homes, and skilled nursing facilities - are discharging patients earlier to reduce their costs.
Fueling the Office of the Inspector General's (OIG's) concerns are data from the Prospective Payment Commission showing that the average length of a hospital stay for Medicare patients fell by 13% between 1991 and 1994, while the share of Medicare payments going to post-hospital care providers increased by 15.5% over the same period. Meanwhile, Medicare payments for home health care are expected to jump from an estimated $16.9 billion in FY96 to $26 billion by the year 2000.
In the report, the OIG claims that patients discharged to a home health agency from hospitals that own an agency had an average hospital stay of six days, compared to seven days for similar patients discharged from hospitals that do not own an agency. Curiously, though, the report found that it made no difference whether the hospital discharges the patient to an HHA that it owns.
In addition to the aggregate length of stay data, the OIG found that hospital ownership affects discharge patterns for some diagnosis-related groups (DRGs) far more than others. For example, in hospitals that own HHAs, patients who had bowel procedures stayed in the hospital four days less than other patients who had bowel procedures. No significant differences in the length of hospital stay was found for patients with heart failure and shock, vascular procedures, or heart procedures. (See charts, p. 192.)
Critics argue that length-of-stay differences don't necessarily imply any wrongdoing. "It may be that when you own a home care agency, that agency is more responsive to meeting the hospital's needs," says Patrice Spath, ART, a health care quality consultant with Brown-Spath & Associates in Forest Grove, OR. "When you don't have any control over the home health agency, it may not be as flexible in meeting the hospital's needs, and that may contribute to a longer length of stay."
Clearly, that's not how the OIG sees it. In fact, the agency goes so far as to say the Baltimore-based Health Care Financing Administration should consider hospital ownership of home health agencies as a factor when selecting future diagnosis-related groups to be covered under its new transfer payment rules.
In response, HCFA agreed it should continue to monitor the data to determine the effect of hospital ownership on postacute patient referral patterns, but told the OIG it's not prepared "to use hospital ownership as a factor when selecting DRGs to be covered under the new transfer provision."
Even so, critics worry that HCFA and the OIG are creating a reimbursement environment that will discourage hospitals from owning their own postacute care services. That would be a shame, Spath says, given that a patient's transition to home care is often much smoother if the agency is owned by the hospital. (For an example of how one hospital effectively coordinates care with its home health agency, see related story, below.)
(Editor's note: The full text of the OIG report, Hospital Stays for Medicare Beneficiaries who Are Discharged to Home Health Agencies, is available at the OIG's Web site: http://www.dhhs.gov/progorg/oei/reports/oei-02-94-00321.htm.)
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