We have controlled for this by weighting the HHRG variable by the percent of Medicare patients in the agency, but this may not have sufficed, particularly if the case-mix of other patients, Medicaid and private pay, is not highly correlated with that of Medicare patients.
Current CMS regulations do not require OASIS data collection that would allow HHRG assignment for non-Medicare patients.
Case-mix variables: Two of the case-mix variables, the HHRGs and the percent of Medicare patients, had positive marginal costs.
For the PPS episodes, we used the HHRG classification determined by CMS, adjusting the service classification, if necessary, based on actual therapy visits from the claims data.
Because the HHRGs were developed to take into account differences in patient case mix that affect the utilization of services, the case-mix variables in our visit regressions were dichotomies to represent the levels of each HHRG dimension.
Some OASIS items are used both to determine the HHRG for payment and as risk factors in the CMS outcome models.
We used the outcome episode as the unit of analysis and removed outcome episodes longer than 60 days and episodes beginning with a resumption of care rather than a SOC assessment--longer episodes because the HHRG can change for the subsequent payment period, and resumptions of care because the HHRG calculated from resumption of care OASIS information may not be the HHRG derived at SOC on which payment is based.
Table 2 shows the pre-PPS and PPS changes in the HHRG distribution and visits per episode.
With adjustment for the shift in the HHRG distribution, total visits per episode were 16.
Since the wound item affects the HHRG classification and payment amount, the importance of accurate reporting on wounds increased substantially after PPS implementation.