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December 2013 Policy Study, Number 13-12


Iowans Want to Age in Place


Mandatory Home Health Benefit – Entitled vs. Eligible



For the past 43 years, for patients qualified to receive nursing-home-level care, the covered services under Medicaid’s home health benefit have been mandatory.[29] CMS mandates each state to cover nursing-home-level care for eligible patients over the age of 21. Each state has the right to determine whether nursing-home coverage would be extended to other Medicaid-eligible patients as well, as in the case of children under the age of 21. Interestingly, being “entitled” to receive care in a nursing home does not imply that the same person is also eligible to receive those covered services. In order to be deemed eligible, the entitled patient must meet the “level-of-care criteria” or the eligibility criteria for nursing-home care.


CMS mandates that home health services cover the following: “nursing, home-health aides, medical supplies, medical equipment, and appliances” suitable for use in a patient’s home. Each state can determine whether to cover optional services such as “physical therapy, occupational therapy, speech pathology and audiology services.”[30] A state is able to determine a standard process for benefit determination using the medical necessity or usual, customary, and reasonable (UCR) tools that CMS provides.[31] If a state opts to do this, then they must also make sure that the quantity, length-of-care term, and scope of coverage are all adequately provided to address the needs identified during the “level-of-care” eligibility determination process.[32] Ultimately, any covered home health services must be prescribed by a physician, deemed medically necessary, and outlined in a written care plan.


The Medicare home health benefit also covers various limited home-health services. Under Part A, rehab services upon hospital discharge and home-health services are a 100 percent covered and guaranteed benefit. Under Medicare Part B, some limited rehab services with a monthly premium and co-pay are offered as an optional benefit, and under Part D home infusion therapy medications are covered, but not the administration of the infusion therapy. For patients with Medicare Part C or Medicare Advantage plans, Cigna and Aetna have instituted some creative managed-care options that promote the use of a wider array of less costly and more desired home-health services.


A pilot for Aetna’s program reduced readmissions by 20 percent and saved $439 per member.[33] Aetna, much like the traditional margin watchers, believes that while it is costly to send nurses into the home, it is not nearly as costly as hospital readmissions.[34] Cigna has a home-based-care team that includes certified nurse practitioners (CNPs) and physician assistants (PAs). Their population-health-management program says primary care physicians use the team to help them manage patients at high risk of hospitalization or re-hospitalization who can’t easily get to a doctor’s office.[35]


Adding another level of complexity to the Medicaid mandate in 1998, an appeals court ruling in DeSario v. Thomas caused CMS to draft an order allowing states to craft lists of “pre-approved items of medical equipment” for ease in their administrative processes, but which also outlined a process for patients to request items that had not been included in their state’s list.[36] It is understood in the title “home” health that the covered benefits are provided in a patient’s home or residence; however, in 1997 another federal appeals court case named Skubel v. Fuoroli determined that nursing services covered under the home-health benefit may also be provided in a setting other than the patient’s home, so long as the services did not extend past the hours that would have been spent on care in the patient’s home.[37] This meant that individuals receiving institutional care could also receive nursing-home care as an additional covered benefit under the home health portion of Medicaid services.




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