Healthcare Market Resources’ Data Supports Recent Medicare Home Health Reform for Substantial Savings

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Dresher, PA – Healthcare Market Resources, a leading provider of customized local market research for home health agencies and hospices, has conducted a state by state analysis of the Medicare Home Health Outlier payments.

Its research reveals that Washington’s recent health care reform of a 2.5% cap on the outlier payments will in fact produce meaningful health care savings without negatively affecting patient access.

“It is as if we are attacking a cancer that is very localized,” Richard Chesney, CEO, Healthcare Market Resources said. “The cap will offer the precision of a scalpel realizing tremendous savings for all yet only impacting a small number of Medicare beneficiaries.”

The complete data of the percentage of outlier payments by state can be accessed at

Remarkably, Healthcare Market Resources’ customized local market research reveals that more than 84% of these outlier reimbursements in 2007 were paid to agencies in just three states- California, Florida and Texas, with Florida receiving the lion’s share. Yet, these states only have 23.4% of Medicare enrollees. Some of those agencies received as much as 80% of their Medicare reimbursement in supplemental outlier payments.

Further analysis of the data found at, demonstrates that 550 agencies were paid slightly over 50% of all outlier reimbursements and almost 88% of these high outlier agencies were in one of the three states mentioned above. A whopping 94% of these agencies were for-profit.

“Had the 2.5% cap on outlier payments been in effect in 2007, Medicare home health reimbursements would have been reduced by $845 million or 5.4% of total expenditures,” Chesney stated. “Less than 25% of the agencies would be impacted by the cap.”

A Medicare outlier is a patient who consumes a disproportionate amount of healthcare resources. A home health agency is only reimbursed a fixed amount per episode of care, however, a percentage of patients rack up higher healthcare costs because the intensity of treatment exceeds the fixed amount.

The current Medicare system allows home health agencies to recoup some of these expenses through supplemental payments. Under the regulations, this portion of the benefit was originally allocated 5% of the Medicare home health payments.

However, Medicare Home Health outlier provision payments exceeded their projected levels in 2007 representing 6.35% of Medicare payments or $996 million..

The recent regulation on outliers has shed light on abuses of the Medicare system and spawned investigations of home health agencies.

“The geographic concentration of the outlier spending increases should have been a red flag,” Chesney said.

A chart with full details of the data can be found at

About Healthcare Market Resources, Inc.
Healthcare Market Resources is a leading provider of custom data for home health agencies and hospices. Its customized local market reports give healthcare leaders a competitive edge for business development and strategic planning initiatives. The insight gained from these marketing tools enables home health agencies and hospices to benchmark their financial, operational, and market performance against their competition. Whether you are interested in market share or market segmentation, Healthcare Market Resources has the tools professionals need to make better decisions for their healthcare organizations.

Media Contact:
Rich Chesney
215-215-657-7373 or