Medical directors and DONs agree about most factors that influence decisions to hospitalize nursing home residents. Patient-centered factors play the largest roles, and the most important causes of overhospitalization are potentially modifiable.

ContextPrior to 1997, home health agencies (HHAs) were reimbursed on a fee-for-service basis and had incentives to provide more services. The 1997 Balanced Budget Act (BBA) reduced payments for home care services to help control Medicare spending.ObjectiveTo examine the length of stay in home care before and after the 1997 BBA.Design and SettingCross-sectional study of home care patients in the 1996 and 1998 National Home and Hospice Care Surveys, which surveyed 1053 HHAs in 1996 and 1088 HHAs in 1998.PatientsNationally representative random sample of home care patients with Medicare coverage in 1996 (4127 patients) and 1998 (4051 patients).Main Outcome MeasureLength of stay in home care (based on the number of days a patient was enrolled in home care services).ResultsFrom 1996 to 1998, unadjusted median length of stay decreased by 16 days for all home care patients (60-44 days, P = .002). The decrease affected for-profit HHAs more than not-for-profit HHAs (111-55 days [51% decrease, P = .002] vs 46-36 days [22% decrease, P = .042]). In a Cox proportional hazards model of time to discharge from home care, post-BBA year (1998) was associated with a shorter length of stay in home care (adjusted hazard ratio [aHR] for home care discharge, 1.39 [95% confidence interval {CI}, 1.19-1.61]), and for-profit status was associated with a longer length of stay in home care (aHR, 0.82 [95% CI, 0.71-0.94]) after adjusting for patient demographics, diagnoses, and functional status.ConclusionAfter the 1997 BBA, length of stay in home care decreased among Medicare patients, particularly among those receiving care from for-profit HHAs.