Home health agencies (RHA) play an important role in the U.S. health care system-allowing individuals who are unable to leave home without great difficulty to receive certain medical or therapeutic care in their own homes. In 2000, Medicare, the federal health care program for elderly and disabled Amen cans, covered home health services for 2.5 million beneficiaries at a cost of $8.7 billion. The approximately 6,900 HHAs that serve Medicare beneficiaries must meet federal requirements, known as conditions of participation (COP), intended to ensure that, among other things, HHAs have the appropriate staff, are following the plan of care specified by a physician, maintain medical records to document the care provided, and periodically reassess each patient's condition. To verify compliance with these and other requirements, the federal government contracts with states to periodically conduct an inspection, known as a standard survey, at each RHA. The survey includes a review of a sample of medical records and interviews with patients in their homes. If an RHA fails to meet a Medicare COP-a serious deficiency that adversely affects (harms) or has the potential to adversely affect (potential to harm) patients-it can be terminated from the program. Oversight of HHAs has become even more important since the implementation of a new prospective payment system in October 2000 that encourages HHAs to provide care more efficiently but also provides an incentive to reduce services in order to increase net revenues.