Changes in Medicare Home Health Agency Supply: 1996-1999

This paper expands upon previous research addressing the question of how supply of Medicare Home Health Agencies (HHAs) changed after implementation of the interim payment system (IPS) in two important ways. First, Medicare HHA claims activity is used together with Medicare certification status from the Online Survey, Certification and Reporting system to determine the Medicare service activity status of HHAs. Second, changes in the supply of Medicare home health care (HHC) is more broadly defined by considering not only agency closings, but also agencies that changed their geographic service areas following implementation of the IPS. Descriptive analyses provide some new insight about the magnitude of both of these sources of Medicare HHC supply change following implementation of the IPS. Multivariate analyses provide a deeper understanding of how HHAs' responses to the IPS varied with respect to characteristics of agencies and the geographic markets they served.