Public policy statement

American Academy of Home Care Medicine

The primary goal of AAHCM’s work in public policy is to promote cost-effective primary medical care that best addresses the needs and wants of people with advanced chronic illness and functional limitations, as well as their caregivers, through a comprehensive system of services centered in the patient’s home.

Long-range achievement of this goal requires substantial changes in health care delivery and financing. The interim steps that are needed include:

  1. Domiciliary visits: accurately describe and re-value medical services rendered in alternative living settings to reflect the work involved and create an incentive for providing medical care in these settings
  2. Travel time: provide a fair mechanism to compensate mobile medical providers for the cost of traveling between residences.
  3. Care coordination: create practical, fair methods to pay adequately through the Medicare fee schedule for the work of coordinating the medical care with community-based agencies which provide social supports, legal services, pharmaceuticals, equipment and supplies, and governmental programs. Training in support of lay caregivers: create practical, fair methods to pay adequately through the Medicare fee schedule for the work of educating, training and supporting lay caregivers in support of the homebound patient.
  4. Regulatory reform: several key changes in regulation that are within the scope of CMS reform would strengthen the systems of care for the chronically ill and most frail members of our communities, including:
  • Medical Directors in home care: require medical direction in Medicare home health agencies, as is true for hospices and nursing homes
  • Primary care exception: reimburse home visits by residents, supervised from a distance by faculty members, under the primary care exception.
  • HMO coverage: require Medicare HMOs to include house calls as part of their benefit package.
  • OIG and Medicare carriers: instruct Medicare carriers to develop consistent and clear payment review methods that comply with existing laws and regulations, so that mobile medical care providers are not systematically disadvantaged by inappropriate physician profiling.

Background: The case for home care medicine

Why only in America?

America is the only industrialized country we know that relies on institutions for so much of its elder care. In contrast, Canada, England, Denmark and many other countries have always had and continue to rely principally on a well-developed set of home and community-based services. What happened in the US? A complex of factors including medical specialization, public funding streams for institutions, limitations placed on home health, and others have made our history different. We have a very expensive institutional acute and long term care system. We don’t have a robust, coordinated home and community-based long-term chronic care management system. Thus, we ultimately manage the care of that 10 percent of our population, which has five or more chronic conditions and drives two thirds of health care costs by relying principally on costly institutional care. With the age wave, and growing numbers of immobile people lacking access to regular medical care, it is critically important that Federal health policy change in ways we will outline.

The Case for Home Care Medicine: Preference, Access, Quality, Cost Preference

All patients, regardless of age, prefer to be cared for in their own home. Every article about quality of care problems in hospitals, nursing homes and assisted living facilities strengthens the evidence for this preference. Following the dimensions of care outlined in the Picker/Commonwealth Program for Patient-Centered Care, house calls: 1) respect customers’ values, preferences and expressed needs; 2) support coordination and integration of care; 3) facilitate information, communication and education; 4) support physical comfort; 5) provide emotional support and alleviation of fear and anxiety; 6) support involvement of family and friends; and 7) facilitate transition and continuity. (Ratner, E "Service Quality in Health Care: Is There Anything Better Than Housecalls?” AAHCP Newsletter, 1999, vol. 11, no. 1.)

Access to Care

At least two million seniors 65 years of age or older are permanently homebound. Millions more are so disabled they cannot easily access physician offices. Many of these persons are Medicare’s "high cost” users, with five or more chronic conditions consuming two-thirds of the Medicare program’s expenditures ("Chronic Conditions: Making the Case for Ongoing Care,” p. 19, Partnership for Solutions, Johns Hopkins University, for the Robert Wood Johnson Foundation (December, 2002).

Lack of primary care access is one root cause in the genesis of higher health care costs for this population. Instead of receiving appropriate primary medical care as chronic conditions destabilize or new problems develop, these persons get care in expensive ER’s and inpatient units. And who are these people? Everyone — upper and middle class Medicare recipients as well as the poor. Despite the need, too few house calls are made. Currently, Medicare providers bill about 1.8 million house calls per year. Many homebound patients never see their physicians. By contrast, nursing home patients average 8 or 9 annual medical visits, some required by Federal regulations, and ambulatory patients with serious chronic illnesses average 11 to 12 annual physician office visits,. (S. Levine, J. Boal, P. Boling, "Home Care,” JAMA vol 290, no 9, September 3, 2003). Considering the homebound alone, the service need is at least 10 million house calls per year.

Non-Physician Medical Providers

Academy policy includes nurse practitioners, physician assistants and other advanced medical practitioners, who are properly trained and educated, and who are working in collaboration with physicians. These professionals are a critical resource in delivery of chronic care. This is well recognized in some settings, such as ambulatory care and nursing homes. It is no less true in home care. We use the term "mobile medical providers” to reflect our broadly inclusive view and strongly encourage involving non-physicians in this medical care model.

Quality of Care

Physicians and other mobile medical providers caring for those with a medical necessity for home visits are able to offer a higher quality of care. They can evaluate patients, their caregivers and the array of supportive services more effectively, and are better able to interact and communicate with patients, family members and other caregivers by evaluating patients in their normal environment. They develop a more accurate assessment of physical and psychosocial needs. Unlike home care nurses, mobile medical care providers can also actively manage patients with complex needs, making timely decisions based on direct patient assessment. (Boling, P, Physicians in Home Care: Present and Future, Springer, 1997)

In most situations, the technical sophistication and specificity of care delivered by mobile clinicians, which is often much less expensive than the alternatives, can now equal that delivered in hospitals for both acute and chronic conditions causing the majority of Medicare costs. The Information Age and the associated explosion in portable technologies have brought testing and diagnosis to the bedside. No longer must a home care patient be sent to the emergency room for a diagnostic lab or x-ray.

  • The variable cost of an arterial blood gas plus the eight most common clinical lab tests used in emergency medicine is only $6.50 plus 4 to 5 minutes of clinician time. Assuming that all providers carry such a device, the other fixed capital cost is about $5,000 to acquire the testing device.
  • The variable cost of a portable chest x-ray done in a patient’s home to rule out a pneumothorax or heart failure is less than $10. Here, capital costs are greater, and opportunity and transport costs must be added, assuming that mobile x-rays are ordered "a la carte” rather than provided by the mobile medical team itself that needs x-ray on only a fraction of visits.
  • The variable cost of a cardiac (thoracic) bio-impedance test is less than $40; this test provides many diagnostic parameters now obtained through an invasively placed Swan-Ganz catheter in the ICU. Again, capital costs are associated with equipment, but operating costs are modest. Federal policy-makers can remedy the fact that less than 100 doctors in the country provide such tests in the home.

Consider heart failure, the most common reason for Medicare hospital admissions with an average hospital payment is $12,555. Excepting cardiac catheterization, every important diagnostic test and therapeutic procedure needed to sustain patients with severe heart failure can be done at home. Academy clinicians routinely make home visits to cardiac patients with New York Heart Association Class IV disease, who by definition (inability to leave home without help or significant hardship) are appropriate for care at home, and are the most frequently hospitalized for this condition. In the Information Age, it is no longer reasonable to have 911 remain the primary access to care for patients too sick to go to the doctor on a "normal” day.

Costs of Care and Cost-effectiveness of Home Care

One solution to the rising costs of chronic care is expanding capacity to provide home-based primary care including house calls. The reason is that, while house calls may cost payers more per service than an office visit, house calls can prevent unnecessary and vastly more expensive ER visits and hospitalizations. They may also prevent other direct costs to payers and society associated with the office visit, such as ambulance transport, and loss of caregiver productivity due to accompanying the patient to the office.

While the literature is not large, published studies that compare a treatment group with similar individuals in the general population have documented cost-effectiveness of home care medicine for patients with high-cost chronic conditions. See Naylor, MD et al, "Comprehensive discharge planning and home follow-up of hospitalized elders,” (JAMA 281:613-620, 1999) where savings of about 65% were shown in a randomized, controlled trial of post-acute home-based management by advanced practice nurses. A similar model produced 70% savings comparing a treatment period to historical control data at VirginiaCommonwealthUniversity in Richmond, VA (J Am Geriatrics Society – 2004 AGS meeting abstract supplement, April 2004). Also see Rich, MW, "A Multidisciplinary intervention to prevent the readmission of elderly patients with CHF” (NEJM 333: 1190-1195, 1995.) where 50% reduction in recurrent CHF hospitalizations was seen during a randomized controlled trial of post-hospital care for high-risk CHF patients.

New studies are now appearing, some practice-based, and some formally funded research. A house call program within a SHMO in Las Vegas, NV produced 62% reduction in hospital days with a sample of 91 clients, producing annual savings of $439,825 for acute, skilled, and sub-acute days, and net savings of $261,225. (SL Phillips et. al, "Chronic Home Care: A Health Plan’s Experience.” Annals of Long Term Care, 12(4), April, 2004). A follow-up study of Moderate Risk (PRA category) patients compared outcomes for 432 members treated by the same geriatric care team with 266 members cared for in standard community-based practices without geriatric specialization. The geriatric team showed savings of $760 per member per year. This extrapolates to $760,000 annually for 1,000 Moderate PRA members. (SL Phillips, et. al., poster P534, American Geriatrics Society 2004 Annual Meeting).

In 2002, a VA Home-Based Primary Care program in an urban area documented 67% reduction in acute hospital days, and 54% reduction in patients hospitalized, plus17% reduction in ED visits. (Jackson, Susan S, et. al, "Impact of a Medical House Call Program on Use of Acute Hospital and Emergency Department Services in an Urban VA Medical Center, poster 34121, AGS 2002).

Additional data come from ElderPACT a Philadelphia house call program teamed with an Area Agency on Aging, aimed at the dual-eligible population. This study showed lower Medicare costs than traditional community-based long term care ADD DATA (B. Kinosian, et al, "ElderPACT: A Housecall Program Teamed with An Area Agency on Aging to Provide Coordinated Chronic Care Management”, paper A24, AGS 2004 Annual Meeting.)
Findings from the "Home Hospital” study at Johns Hopkins University were reported in 2004. This study involves acutely ill elders with high cost conditions (pneumonia CHF, COPD and cellulitis) that met criteria for inpatient hospital care but were treated at home following an initial ER evaluation. Good clinical outcomes were paired with costs at home that were equal to or lower than the costs of hospital care. (B. Leff, et. al, "HomeHospital: A Feasible and Efficacious Approach to Care for Acutely Ill Older Persons.” Poster 517, AGS, 2004. )

Finally, the Call Doctor Medical Group in California studied the cost difference between treating pneumonia in the home rather than the hospital, using 2001 Medicare data. Average cost for hospital treatment was $5,159 while treatment at home cost $1,000. Estimated annual savings to Medicare for this one condition, assuming that these physicians treated all patients, could reach $1 billion. (H. Finnelli, "House Care and the Housecall,” 2001, see

Home care medicine today…and the ideal

The full potential of home care medicine is far from being realized in today’s medical practice. Most patients are served by processes marked by discontinuity of providers, disjointed medical record systems, and a lack of timely access to medical care.

The Academy envisions substantial changes in funding and structure of health care to foster care of individuals with advanced chronic illness and functional limitation in the setting they prefer, which is typically their own homes. This would potentially affect between 4 and 10 percent of the Medicare population. We believe a health care crisis is approaching in America, as a result of an aging population, medical cost inflation that exceeds economic growth indices, and lack of a coherent comprehensive strategy for care of people with advanced chronic illness. To solve this problem, we believe that we must re-focus attention on the doctor-patient relationship and population needs, rather than needs and habitual practices of those delivering care in institutional settings.

There is no better example of this more appropriate approach than when physicians provide comprehensive care in the home. To underscore this point by example, we favor incentives that promote treatment of a frail elder who falls at home by those that go to the home, adjust her medications and remove obstacles from her walking path so that she no longer falls; the current model favors those that restrict her activities, and perform a multiplicity of cardiac and neurological tests, CT and MRI scans, then have no accountability when she falls again, breaks a hip and goes to a hospital Emergency Room by ambulance.

Optimal care of the frail elderly and disabled requires a major paradigm shift: the primary site of service should be the home, rather than a medical institution.

A New Model

The preferred future model would offer seamless chronic care management across the spectrum of settings, with incentives aligned to emphasize prevention and elimination of unnecessary ER visits and inpatient admissions. To reach that goal we need a public policy that supports:
Home-based primary medical care for those in need, who are Medicare’s high cost users with multiple chronic conditions that require complex medical care management;

  • Timely response to urgent problems so that patients and caregivers rely less on emergency rooms settings where costs are higher and the likelihood of hospital admission is much greater;
  • A seamless system in which home care physicians and associated advanced medical care providers work with home care agencies to help maximize their effectiveness in reducing unnecessary ER visits and hospitalizations;
  • Physician-led interdisciplinary teams that provide coordinated care across settings;
  • Shared information systems;
  • Integration of chronic medical care and appropriate social support services targeted to those whose use of nursing homes are most likely to be modifiable.

Performance Management/Improvement

The Academy believes that this new model of care should incorporate and embrace forward-looking principles of performance improvement, including evolution of clinical and ethical standards, best practices, and benchmarks.

Financing and Incentives

The Academy believes that new and better incentives will be required to foster the development of this new model. This includes both changes to the basic Medicare fee-for-service system of provider payment, and new models in which medical providers have access to some of the savings accruing to the larger health system as a result of the work by those medical providers.


Paired with improvement in compensation for medical provider teams, as described above, must be accountability for the use of other Medicare resources by their patients, such as hospitalization, nursing home, home medical equipment, home health care, and pharmacy.
Specific policies and implementation of change

Improve Financial Incentives for Home Care Work

Prompt steps should be taken revise the existing fee-for-service system to:

  1. Reimburse for travel to patients’ homes
  2. Reimburse for ongoing care coordination

Address Travel Time and House Calls

Travel time was never addressed in the Medicare fee-setting process. Yet, immobile patients live in both urban and rural areas where significant portions of a house call provider’s time are consumed by an activity (travel) for which there is no reimbursement.

Travel time isn’t included in the CPT description of mobile medical services and was specifically excluded from the 1997 RUC valuation for these codes. At that time, we were told then that travel time would be included in Practice Expense, to be studied in 2000. Unfortunately, different administrators were involved and Practice Expense has also excluded travel time. Travel time therefore is an orphan issue.

Travel time (and related expense) is integral to house calls, whether provided in private residences or other living settings. Despite efforts to raise the issue with CMS in 2000 (including a legal opinion that CMS is required to address the issue), no action was taken. In 2002, RUC staff stated that travel was covered by code 99082. Inquiry revealed that the code relates only to "unusual” travel, not travel integral to practice. A proposal to the CPT Editorial Committee to change the descriptor of code 99082 was rejected. CMS did not respond to an appeal. On the other hand, adjusting the Practice Expense formula may not be the best approach because of the administrative processes involved in determining fair payment across the wide range of physician services.

Recommendations: We recommend that CMS consider one of several options:

  • A CPT (or HCPCS) code usable in selected instances,
  • Attaching a modifier to selected E+M services;
  • Request that the RUC assign a value to physicians’ travel time in conjunction with home visits, which either:
    • represents an average travel time based on survey data, or
    • creates a mechanism to address geographic variability.

Care Coordination

Good chronic care management and coordination of care is rare in our fragmented system, nor is it adequately reimbursed by Medicare when physicians try to advocate for their patients. Care coordination is needed to assure continuity of the medical care plan and respect for the patient’s preferences and values inherent in the working relationship with their primary care physician. We must create practical, fair methods to pay adequately through the Medicare fee schedule for the work of coordinating the medical care teams (including nurses, therapists and technologists), and the community-based agencies which provide social supports, legal services, pharmaceuticals, equipment and supplies, and governmental programs. Optimal care can only be provided by addressing the full range of services in a cohesive approach. Finally, the important potential contribution of shared information systems across settings of care is also far from reality, despite its technical feasibility.

Care Plan Oversight, and Skilled Home Care Certification and Recertification are helpful steps but payment for care coordination is limited to concurrent care by a Medicare recertified home care agency. There is no mechanism to adequately cover the aggregate costs for those practitioners that engage in this coordination work on an ongoing basis, and which likely constitutes about 30% of the actual work involved in caring for this population.

Training in support of lay caregivers is integral to the success of maintaining patients in the community, but there is currently no method to pay for the work of educating, training and coaching lay caregivers in support of the homebound patient. In addition, patients with advanced chronic illnesses would benefit from pharmacy oversight and nutritional counseling that is routinely provided in nursing homes, mental health services in the home and extended hour urgent care services, but none of these are covered services under Medicare or Medicaid.

However, we agree that it would be generally difficult to define and implement an equitable, fully functional fee for care coordination under the CPT or HCPCS system.

Recommendations: We favor the approach outlined in MMA Section 721 and 722, through which qualified physicians (as defined by the Secretary of HHS), working within the context of an interdisciplinary team, would be eligible for a Chronic Care Coordination payment contingent on pre-determined performance standards, which include, where appropriate:

  • Adherence to evidence-based clinical practice guidelines;
  • Provision of preventive care services; and,
  • Achieving levels of patient and caregiver satisfaction.

Payments can be structured as either a monthly fee with the understanding that the overall costs of care must meet budget neutrality goals, a gain-sharing arrangement at the end of the billing cycle, or both.

CMS should share the cost burden of developing integrated electronic health record systems and the hardware requirements for implementing these programs when instituted through a Chronic Care Coordination system of care.

Regulatory reform and consistent application of the law

Several key regulations should be implemented and consistency brought to the interpretation of existing laws to best meet the needs of the chronically ill and most frail members of our communities, including:

  1. Medical Directors in home care
  2. Primary care exception for residency training
  3. Require Medicare HMO coverage of the house call benefit
  4. Assure OIG and Medicare Carrier compliance with existing laws and regulations.

Medical Directors in Home Care

Medical Directors in Home Care should be required for Medicare-certified home health agencies, as is true for hospices and nursing homes. After more than a decade of bemoaning lack of physician involvement in home care, and trying weak financial incentives that have worked poorly, we believe it is time for public policy to invest in creating roles for physicians.

As is true with hospice and many nursing homes, the best solution may be Medical Directors who are trained and qualified to act as the missing link in home health care. Medical Directors can review care plans and certify care plans when other physicians are non-responsive, act as community liaison with referring physicians, and participate in staff education programs, quality assurance initiatives and program development in such areas as chronic disease management. They should also provide house calls if needed.

The starting point could be the recommendation in the 2001 OIG report that "CMS should establish a workgroup composed of physicians, home health representatives, and departmental designees or utilize an existing workgroup such as the Practicing Physicians Advisory Council or the Physician Regulatory Issues Team to discuss issues related to Medicare home health care.” (Op. cit, OIG 2001, p. ii)

The AAHCM has developed and run a national training program for home health agency medical directors, with a certification exam, and would be pleased to continue our efforts.

Recommendations: Regulatory reform should be phased in that provides an incentive for Medicare-certified home health agencies to engage the services of a Medical Director, with a preference for physicians with appropriate certification.

Primary Care Exception

While office-based and outpatient primary care is increasingly part of medical school and post-graduate training curricula, most physicians and other advanced medical providers learn little or nothing about home care and house calls during training and have few role models to emulate. This is a critical, formative period in the life of a young physician, and including home visits during this experience will greatly increase the likelihood of subsequent practice in the home (see Boling survey paper).

One significant hindrance is the cost to the residency-training faculty of lost time and productivity that results from mentoring residents one-on-one in the home setting. This has been addressed in ambulatory care through the "primary care exception.” We believe that a similar approach should be made available for house calls, and see no reason to avoid doing this. Supervision and modeling are critical elements in the training process and provisions must be made if there is to be a cadre of physicians to fill this role in our society.

Recommendations: Allow primary care residency programs to add the remote supervision of a resident making home visits in lieu of a clinic session to the responsibilities of an attending physician, with immediate availability by telephone and the obligation to critique the care and audit the chart on the completion of services.

Require Medicare HMO Coverage of the Home Visit Benefit

Many Medicare HMOs have inappropriately refused to provide home visits to homebound beneficiaries in a blatant attempt to encourage disenrollment of this high cost population and to discourage other frail elders from participation. This unconscionable practice shifts the costs of care to Medicare and skews the outcome and quality of care indicators in favor of the HMO, while only adding to societal burdens.

Recommendations: Require that Medicare HMOs include house calls as part of their benefit package, or readjust their premiums to reflect a lower care mix.

Assure Medicare Carrier and OIG Compliance with Existing Laws and Regulations

Under Medicare fee-for-service, there is some potential for abuse (primarily billing issues) when unaccompanied professionals provide care in the private domiciles of compromised patients. However, there appears to be widespread misuse of physician profiling that has discouraged the practice of home visits in many of our nation’s communities. For example, in the past twenty years, one group practice making house calls full time has appealed to the Fair Hearing Officer (FHO) or Administrative Law Judge (ALJ) over 3,500 claims denied by one Medicare carrier. Among these, 800 of the last 874 denials were overturned by the FHO. Overall the carrier has been found to have denied the claim incorrectly 92% of the time. Federal regulations require carriers to be upheld by the FHO 95% of the time on average. This example demonstrates an apparent lack of understanding by the carrier, and there are anecdotal reports that home care clinicians across the country have disproportionately denied payment for medically reasonable and necessary care in the home. It seems likely that profile screens, based on ambulatory care and emergency department practices, make mobile medical providers appear anomalous.

There are ways of coping with the few "bad apples” that appear in any line of work. The OIG should encourage CMS to pursue refinements in the coding system, including the assignment of typical work time in the redefinition of domiciliary care, to better identify potential fraud or abuse in this setting.

Recommendations: The Medicare carriers should be instructed to recognize the unique features of providing primary care to the chronically ill in their home, and avoid unfairly profiling legitimate providers that adopt this model.

Developing a consortium of stakeholders

For health care in the home to reach its maximum potential and greatest cost-effectiveness, a consortium of non-medical industries and consumer groups are needed as advocates. The issues involved are too important and too large for a small, non-profit professional organization like the American Academy of home Care Medicine to promote alone. We have advocated for revised home care policy for over ten years.Many meetings have been held, research studies have been provided, white papers presented, and Congressional testimony delivered by Academy executives. We will continue this work, but we need help.

Unlike professional organizations that seek simply to augment reimbursement for its members, the Academy represents a social need for the most deserving patients in America: the frail elderly and disabled adults and children. In the 1990’s, the U.S. Supreme Court unanimously agreed that CMS policies must allow for provision of community-based medical services. In other words, it is illegal to force citizens into institutional care because of non-payment of Medicare or Medicaid services.

In 2004, Medicare legislation for the first time recognized this unique population by mandating demonstration projects allowing new alternative delivery systems for the chronically ill, to be reimbursed with a shared risk program. However, these demonstrations will be small and they will not influence public policy for several years, if ever.

We believe numerous industries would benefit from a consolidated approach allowing homebound patients to access medical care in their homes and institutional settings. Residential care settings now must call 911 and re-fill their bed when a patient is acutely ill, because the CMS codes for medical care in residential care facilities have still not changed from a level of reimbursement roughly equal to the cost of transportation.
Skilled nursing facilities would likewise benefit from the active participation of clinicians with advanced diagnostics delivered on site without the expense of the ambulance (not currently the norm in any nursing facility). Hospitals would benefit from coordinated early discharge plans and bed allocation if over-tasked facilities capitalized on delivery of care to patients at home. Corporations with under-funded retirement health plans would benefit from stabilization of retiree costs.

Workers’ compensation cost would be lowered by delivery of on-site care, leading to better treatment plans and more accurate diagnosis by clinicians at the site of injury. There will be 100 million emergency room patients this year; about 90% of these situations do not need the capabilities of an ER and would benefit from a low-cost alternative to 911 if mobile urgent care were available in the community.

Most importantly, the rapidly growing elderly, infirm population would benefit because of better access, lower cost and the provision of their medical care where they have always wanted it to be…in their home. It is time for all with an interest in this situation to help educate policy-makers and elected leaders about what is possible. The community of interested parties includes:

  • Business leaders, wanting workers at work rather than taking parents to doctors
  • Individuals, who prefer care in the privacy and comfort of their homes
  • Family caregiver, burdened by trying to overcome barriers to access
  • Those responsible for administering health plans in a time of limited resources

We are the physicians of the future, because we remember what was right about the past.