*This is an archive page. The links are no longer being updated.
1994.01.06 : Medicare Cost Limits on Hospital-Based Health Agencies

Date: Thursday, Jan. 6, 1994
Contact:  Anne Verano, HCFA (202) 690-6145

            Medicare Cost Limits on Hospital-Based
                       Health Agencies
 
Medicare cost limits on hospital-based home health agencies will
no longer include added amounts for administrative and general
overhead costs, HHS Secretary Donna E. Shalala announced today. 
The new policy is required by the Omnibus Budget Reconciliation
Act of 1993.

"This is a change that will save Medicare $190 million over two
years," said Secretary Shalala.

Medicare payments to home health agencies are based on costs.  The
policy change will save the Medicare program an estimated $70
million in the 1994 fiscal year and $120 million in FY 1995.

"These savings are achieved by making the cost limits for
hospital-based home health agencies the same as those for free-
standing HHAs," said Bruce C. Vladeck, administrator of the Health
Care Financing Administration.

The new policy is in effect for HHA cost-reporting periods that
began on or after Oct. 1, 1993.

HCFA is demonstrating alternative payment methods for home health
agencies in order to develop a prospective payment system that
would provide HHAs with greater incentives for efficiency.

The Medicare program will spend an estimated $13.4 billion for
home health services to beneficiaries in FY *This is an archive page. The links are no longer being updated.
1994.

The Health Care Financing Administration is the federal agency
that administers the Medicare and Medicaid programs.

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