The Cost of Incomplete Home Health Referrals After Hospitalization

Millions of Medicare fee-for-service beneficiaries are referred to home health services each year, with roughly one-third of those individuals sent to in-home care to recover after an institutional stay.

Yet a significant portion of those referrals never follow through on their home health orders, which often ends up being a costly problem for hospitals and patients alike.

“The repercussions of incomplete home health referrals cause a multitude of damaging effects, from the lack of quality care for patients in need to the increases in hospital costs due to readmissions,” Christine Cook, a senior data scientist at post-acute care analytics firm Trella Health, told Home Health Care News in an email.


To better understand “incomplete referrals,” researchers from Trella and KNG Health Consulting pulled the health records of nearly 2 million Medicare beneficiaries sent to home health services following a short-term acute care hospital stay from October 2015 through December 2016.

From that relatively large population, the team of researchers then filtered for a variety of factors, including only looking at data tied to beneficiaries coded into seven primary diagnosis categories common to home health care. The group additionally decided to only include patients who were 65 or older while being continuously enrolled in Medicare Part A and Part B — not Medicare Advantage.

Eventually, the researchers drilled down to a population of 724,700 patients and began to hunt for any key patterns. They published their findings in The Journal of Post-Acute and Long-Term Care Medicine in January.  


“We must continue to evaluate our transitions of care to ensure that patients are provided with proper education on the value of home health care,” said Cook, one of the study’s authors.

Of the 724,700 patients with a short-term acute care hospitalization in the aforementioned window, 71% started home health services within seven days of discharge. The remaining 29% had “incomplete” home health referrals, with varied rates depending on patients’ clinical characteristics.

Among the conditions examined, referral completion rates were highest among joint-musculoskeletal patients, with 83% of those patients following through on home health orders. In contrast, just 62% of digestive-endocrine patients recorded a complete home health referral.

Patients with incomplete home health referrals were also more likely to be non-white and dual-eligible relative to patients with complete referrals, according to the team of Trella and KNG Health Consulting researchers.

“Our findings on [home health] referral completion rates are consistent with prior work that examined the accuracy of the discharge destination indicated on hospital record,” the study reads. “Prior studies, however, do not report on the reasons for these incomplete home health care referrals.”

Apart from looking at patient demographics and primary diagnoses, the researchers also studied the value of home health care after hospitalization.

Specifically, they found that patients with complete home health referrals had a 1.4 percentage point lower mortality rate compared to those with incomplete referrals after a hospitalization. Patients with complete referrals similarly had a 2.4 percentage point lower readmission rate compared to those in the incomplete group.

Given the average cost per hospitalization of $13,600 among Medicare beneficiaries, that translates to tens of millions of dollars, Trella Health CEO Ian Juliano told HHCN in an email.

“Home Health is a fundamental step in a patient’s care as they re-enter the home after a hospital visit,” Juliano said. “Complete home health referrals can save hospitals nearly $168.6 million dollars by lowering readmission rates, a savings that offsets a large percentage of the home health costs. In addition, the impact to payers is even greater when considering all of the unnecessary professional claims incurred as a result of that avoidable hospitalization.”

Patient decision-making is one reason for an incomplete home health referral, but there are likely system-related issues after hospitalization as well.

“These obstacles may be related to communication between health care providers, such as lack of adequate referral information from the hospital, or missing documentation to support the homebound requirement for Medicare,” the study notes. “They may also be related to staffing shortages when scheduling care.”

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