Medicare Maximization by State Medicaid Programs: Effects on Medicare Home Care Utilization

Medicaid programs in some states have attempted to shift home health care costs to Medicare by using retrospective billing practices. The authors explored whether retrospective billing practices increase Medicare utilization for dual eligibles by analyzing primary data on the existence of retrospective billing practices collected from 47 state Medicaid offices complemented with individual-level secondary data from the 1992-1997 Medicare Current Beneficiary Survey. An individual-level random effects model was used to estimate the increase in the probability and amount of Medicare home care visits from state retrospective billing practices. Retrospective billing practices were found not to affect either the probability or the amount of Medicare home care visits in these data, but the significant inverse relationship found between Medicaid and Medicare visits shows that states with high Medicaid utilization have opportunity to shift some of these visits to Medicare.