Reimbursement dilemma regarding home health-care products and services.

Reimbursement mechanisms for home health-care products and services are discussed in detail. The two major categories of the home health-care industry--(1) skilled nursing, homemaker, and other services, and (2) equipment, supplies, and other products (including drugs)--are reimbursed by third-party payers differently. While prospective pricing of inpatient care encourages the growth of home-care services, government administrators are concerned about potential spending growth at a time of ballooning deficits, and private health insurers are uncertain about coverage criteria. Nuances of Medicare coverage criteria and private insurance reimbursement for home health-care services are described. Medicaid coverage of drugs and biologicals for home patients is also described. The Health Care Financing Administration (HCFA) is expected to clarify and restrict Medicare coverage and payment of home-care products, equipment, and supplies. Medical justification will probably become more specific with greater attention to patient diagnoses and prognosis of patient therapies. Per-case payment methods will be refined to encompass home care. The government and private insurance programs will move toward capitation payment methods under which institutions will have even greater incentives to develop sophisticated home-care programs to substitute for institutional care.