The Policy Implications of the Cost Structure of Home Health Agencies

CMS: 2/12/14

Purpose: To examine the cost structure of home health agencies by estimating an empirical cost function for those that are Medicare-certified, ten years following the implementation of prospective payment.
Design and Methods: 2010 national Medicare cost report data for certified home health agencies were merged with case-mix information from the Outcome and Assessment Information Set (OASIS). We estimated a fully interacted (by tax status) hybrid cost function for 7,064 agencies and calculated marginal costs as percent of total costs for all variables. Read more