Washington Initiatives

HMOs Provide Less Home Care Than FFS Plans


When it comes to Medicare home health services, fee-for-service plans have HMOs beat, says a new General Accounting Office report.

Fee-for-service expenditures for home health, now $17.7 billion annually, have increased a whopping 600 percent in eight years. According to the report, titled "Medicare Home Health: Differences in Service Use by HMO and Fee-for-Service Providers," home health care continues indefinitely under fee-for-service medicine, while HMOs try to terminate coverage of services as soon as possible. HMOs are at risk for service costs that exceed the capitated payment, so they provide just enough services to restore patient health and prevent more expensive care, the report says.

HMOs often ignore the big picture and tend to focus only on symptoms, the document explains. "In fee-for-service [medicine]," the GAO reports, "the home health agency's goal has been to resolve every condition that a patient had. In contrast, HMOs tend to focus on the specific condition that initiated the home health episode."

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