Final answer:
The Health Care Financing Administration (HCFA), now known as CMS, instituted a new payment system for home health agencies in 2000, aiming to align payments with patient needs and service costs.
Step-by-step explanation:
In 2000, the Health Care Financing Administration (HCFA), which is now known as the Centers for Medicare & Medicaid Services (CMS), instituted a new payment system for home health agencies. This change aimed to enhance the reimbursement structure for home health services provided to Medicare beneficiaries. The Prospective Payment System (PPS) for home health agencies was introduced to replace the previous cost-based reimbursement system. PPS established a standardized payment rate based on various factors, such as patient characteristics and the intensity of services needed. This shift aimed to improve efficiency, control costs, and ensure that Medicare funds were allocated appropriately for home health care services across the United States.