Competition and Gaming Behavior by Medicare Home Health Agencies in the United States

Under the Medicare home health prospective payment system, agencies could make large profits by targeting the 10th therapy visit. The objective of this study is to examine the influence of market competition on home health agencies’ targeting the 10th therapy visit. This article uses changes in competition rates within each market over time to examine whether home health agencies were more likely to target the 10th visit under greater competition. No significant associations were found between competition and agencies’ targeting behavior on average, but competition effects on targeting behavior were significantly greater for freestanding agencies that were likely to be in relatively financially disadvantageous positions. These findings suggest that competition might increase financially unstable agencies’ 10th-visit targeting behavior, potentially leading to unnecessary Medicare spending.