Evaluation of the Health Care Financing Administration's Proposed Home Health Care Reimbursement Limits

In response to congressional concern that the limits proposed by the Health Care Financing Administration (HCFA) on home health care reimbursements were too high, GAO reviewed the accuracy of the database used to develop the limits, the methodology used, the accuracy of the HCFA estimated savings, and alternative methods HCFA could use to improve existing limits or develop subsequent home health reimbursement limits. A number of problems with the database and HFCA procedures were identified: under the methodology used, relatively minor changes in the number of home health agencies included in the database or the data themselves could result in substantial changes to the computed reimbursement limits; and small changes in the level at which the limits were set could have a relatively large impact on the savings resulting from implementation of the limits.