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200. HOME HEALTH AGENCY

200.1 Subdivision of Agencies

200.2 Arrangements by Home Health Agencies

200.3 Rehabilitation Centers

Home Health Prospective Payment System

201. HOME HEALTH PROSPECTIVE PAYMENT SYSTEM

201.1 National 60 Day Episode Rate

201.2 Adjustments to the 60 Day Episode Rates

201.3 Continuous 60 Day Episode Recertification

201.4 Counting 60 Day Episodes

201.5 Split Percentage Payment Approach to the 60 Day Episode

201.6 Physician Signature Requirements for the Split Percentage Payment

201.7 Low Utilization Payment Adjustment

201.8 Partial Episode Payment Adjustment

201.9 Significant Change in Condition (SCIC) Payment Adjustment

201.10 Outlier Payments

201.11 Discharge Issues

201.12 Consolidated Billing

201.13 Telehealth

201.14 Change of Ownership Relationship to Episodes Under PPS

Covered and Noncovered Home Health Services

203. CONDITIONS TO BE MET FOR COVERAGE OF HOME HEALTH SERVICES

203.1 Reasonable and Necessary Services

203.2 Impact of Other Available Caregivers and Other Available Coverage on Medicare Coverage of Home Health Services

203.3 Use of Utilization Screens and "Rules of Thumb"

204. CONDITIONS THE PATIENT MUST MEET TO QUALIFY FOR COVERAGE OF HOME HEALTH SERVICES

204.1 Confined to the Home

204.2 Services Are Provided Under a Plan of Care Established and Approved by a Physician

204.3 Under the Care of a Physician

204.4 Needs Skilled Nursing Care on an Intermittent Basis (Other Then Solely Venipuncture for the Purposes of Obtaining a Blood Sample) or Physical Therapy or Speech-Language Pathology Services or Has Continued Need for Occupational Therapy

205. COVERAGE OF SERVICES WHICH ESTABLISH HOME HEALTH ELIGIBILITY

205.1 Skilled Nursing Care

205.2 Skilled Therapy Services.

206. COVERAGE OF OTHER HOME HEALTH SERVICES

206.1 Skilled Nursing Care, Physical Therapy, Speech-Language Pathology Services, and Occupational Therapy

206.2 Home Health Aide Services

206.3 Medical Social Services

206.4 Medical Supplies (Except for Drugs and Biologicals) and the Use of Durable Medical Equipment

206.5 Services of Interns and Residents

206.6 Outpatient Services

206.7 Part-time or Intermittent Home Health Aide and Skilled Nursing Services

Special Conditions for Coverage of Part B

212. SPECIAL CONDITIONS FOR COVERAGE AND PAYMENT OF HOME HEALTH SERVICES UNDER HOSPITAL INSURANCE (PART A) AND SUPPLEMENTARY MEDICAL INSURANCE (PART B)

212.1 Post-Institutional Home Health Services Furnished During a Home Health Spell-Of-Illness Insurance (Part A) and Supplementary Medical Insurance (Part B)

212.2 Beneficiaries Enrolled in Parts A and B and Meet the Institutional Care Threshold

212.3 Beneficiaries Who are Enrolled in Part A and Part B But Do Not Meet the Threshold for Post-Institutional Home Health Services

212.4 Beneficiaries Who Are Part A Only or Part B Only

212.5 Coinsurance, Copayments, and Deductibles

Duration of Covered Home Health Services

215. DURATION OF HOME HEALTH SERVICES

215.1 Number of Home Health Visits Under Hospital Insurance (Part A)

215.2 Number of Home Health Visits Under Supplementary Medical Insurance (Part B)

Counting Visits

218. COUNTING VISITS UNDER THE HOSPITAL AND MEDICAL PLANS

218.1 Visit Defined

218.2 Counting Visits

218.3 Evaluation Visits

Supplementary Medical Insurance

219. MEDICAL AND OTHER HEALTH SERVICES

219.1 Surgical Dressings, and Splints, Casts, and Other Dressings Used for Reduction of Fractures and Dislocations

219.2 Prosthetic Devices

219.3 Leg, Arm, Back, and Neck Braces, Trusses, and Artificial Legs, Arms, and Eyes

219.4 Outpatient Physical Therapy, Occupational Therapy, and Speech Pathology Services

220. RENTAL AND PURCHASE OF DURABLE MEDICAL EQUIPMENT

220.1 Definition of Durable Medical Equipment

220.2 Necessary and Reasonable

220.3 Definition of Beneficiary's Home

220.4 Repairs, Maintenance, Replacement, and Delivery

220.5 Coverage of Supplies and Accessories

220.6 Miscellaneous Issues Included in the Coverage of Equipment

220.7 Payment for Durable Medical Equipment

221. AMBULANCE SERVICE

221.1 Vehicle and Crew Requirements

22l.2 Necessity and Reasonableness

22l.3 The Destination

224. PHYSICIAN CERTIFICATION FOR MEDICAL AND OTHER HEALTH SERVICES

Provider Based Physicians

225. PROVIDER-BASED PHYSICIANS

Exclusions From Coverage

230. SPECIFIC EXCLUSIONS FROM COVERAGE AS HOME HEALTH SERVICES

232. GENERAL EXCLUSIONS

232.l Services Not Reasonable and Necessary

232.2 No Legal Obligation to Pay for or Provide Services

232.3 Items and Services Furnished, Paid for or Authorized by Governmental Entities--Federal, State or Local Governments

232.4 Services Not Provided Within the United States

232.5 Services Resulting From War

232.6 Personal Comfort Items

232.7 Routine Services and Appliances

232.8 Supportive Devices for Feet

232.9 Excluded Foot Care Services

232.10 Custodial Care

232.11 Cosmetic Surgery

232.12 Charges Imposed by Immediate Relatives of the Patient or Members of His Household

232.l3 Dental Services Exclusion

232.l4 Items and Services under a Workers' Compensation Law

Filing for Payment

233. FILING A REQUEST FOR PAYMENT AND CLAIM FOR PAYMENT

233.l Establishing Date of Filing a Claim for Payment

233.2 Use of Postmark to Establish Filing Date of a Claim for Payment

234. REQUEST FOR PAYMENT

234.l Billing Form as Request for Payment

234.2 Request for Payment on Provider Record

234.4 Signature on the Request for Payment by Someone Other Than the Patient

234.5 Refusal by Patient to Request Program Payment

234.6 Form CMS-485, Home Health Certification and Plan of Care

234.7 Completion of Form CMS-485, Home Health Certification and Plan of Care

234.8 Treatment Codes for Home Health Services

234.9 Addendum to Form CMS-485, Plan of Care

234.10 Coverage Compliance Review

234.11 Documentation of Skilled Nursing and Home Health Aide Hours

EXHIBIT I

Time Limits - Cost Reimbursement

235. TIME LIMITS FOR REQUESTS AND CLAIMS FOR PAYMENT FOR SERVICES REIMBURSED ON A REASONABLE COST BASIS

235.1 Usual Time Limit

235.2 Extension of Time Limit Due to Delay in Transmitting Reply to Start of Care Notice

235.3 Extension of Time Limit Where Late Filing Is Due to Administrative Error

236. EFFECT ON BENEFICIARY AND HOME HEALTH AGENCY OF LATE FILING OR BENEFICIARY'S REFUSAL TO FILE

237. FILING CLAIM WHERE USUAL TIME LIMIT HAS EXPIRED

237.1 Part A and Part B Home Health Services

237.2 Part B Services Other Than Home Health Services (CMS-1483 Billing)

237.3 Appeals

Time Limits - Part B Charge Claims

239. TIME LIMIT FOR FILING PART B REASONABLE CHARGE CLAIMS

239.1 Extension of Time Limit Due to Administrative Error

239.2 Time Limit Where Provider Has Billed Improperly for Professional Component

239.3 Responsibility When Claim Not Filed Timely

Certification and Recertification

240. CERTIFICATION AND RECERTIFICATION BY PHYSICIANS--HOME HEALTH SERVICES

240.1 Content of the Physician's Certification

240.2 Method and Disposition of Certifications

240.3 Recertification

240.4 Delayed Certification

Special Provisions Related to Payment

245. REFUNDS

245.1 Return or Other Disposition of Moneys Incorrectly Collected

245.2 Appropriate Time Limits Within Which the HHA Must Dispose of Sums Incorrectly Collected.

245.3 Former Participating HHAs

No-Fault Insurance

248. SERVICES REIMBURSABLE UNDER NO-FAULT INSURANCE

248.1 Definitions

248.2 Provider Actions

248.3 No-Fault Insurance Does Not Pay in Full

248.4 No-Fault Insurance Does Not Pay All Charges Because of Deductible or Coinsurance Provision In Policy

248.5 State Law or Contract Provides That No-Fault Insurance Is Secondary To Other Insurance

248.6 Provider And Beneficiary's Responsibility With Respect To No-Fault Insurance.

248.7 Private Right of Action

Workers' Compensation

250 GENERAL

250.1 Definitions

250.2 Effect of Payments Under Workers' Compensation Plan

250.3 Secondary Medicare Payments

250.4 Workers' Compensation Cases Involving Liability Claims

250.5 Possible Coverage Also Under Auto Medical or No Fault Insurance or Employer Group Health Plan

250.6 Contested Workers' Compensation Claims

250.7 Lump Sum Compromise Settlement.

250.8 Lump Sum - Commutation of Future Benefits

250.9 Right of Recovery

250.10 Private Right of Action

250.11 Handling of Cases Involving Work-Related Conditions

250.12 Workers' Compensation Has Paid or Is Expected to Pay

250.13 Workers' Compensation Denies Payment

250.14 Action By Provider Where Benefits May Be Payable Under Federal Black Lung Program

250.15 DOL's List of Acceptable Diagnosis.

250.16 Medicare Payment

250.17 Questionable Cases

250.18 DOL Does Not Pay for All of Services.

250.19 DOL's Address

250.20 Conditional Medicare Payment in Contested Workers' Compensation Cases

250.21 Effect of Lump-Sum Compromise Settlement and Final Release

250.22 Apportionment of Lump-Sum Compromise Settlement of Contested Workers' Compensation Claim

250.23 Overpayment Due to Workers' Compensation Payments

Liability Insurance

251 GENERAL EFFECT OF LIABILITY INSURANCE ON MEDICARE PAYMENT

251.1 Effect of Payment by Liability Insurer on Deductibles and Utilization.-

251.2 Definitions

251.3 Provider Billing Rights and Responsibilities

251.4 Provider Actions

252 LIMITATION ON PAYMENT FOR SERVICES TO INDIVIDUALS ENTITLED TO BENEFITS SOLELY ON THE BASIS OF END STAGE RENAL DISEASE WHO ARE COVERED BY EMPLOYER GROUP HEALTH PLANS

252.1 General

252.2 Definitions

252.3 Retroactive Application

252.4 Determining the Months During Which Medicare May Be Secondary Payer

252.5 Effect of Changed Basis for Medicare Entitlement

252.6 Subsequent Periods of ESRD Entitlement

252.7 Identification of Cases in Which Medicare May Be Secondary to Employer Group Health Plans

252.9 Billing

252.10 Amount of Secondary Medicare Payments Where Employer Group Health Plan Pays in Part for Visits and Services

252.11 Employer Group Health Plan Pays in Full

252.13 Effect of EGHP Payments On Deductible and Coinsurance

252.14 Limitation on Right of Home Health Agency to Charge a Beneficiary.

252.15 EGHP Erroneously Pays Primary Benefits

252.16 Claimant's Right to Take Legal Action Against an EGHP

252.17 Medical Services Furnished to ESRD Beneficiaries by Source Outside EGHP Prepaid Health Plan

Limitation on Payment for Services to Employed Aged Beneficiaries and Spouses

253. LIMITATIONS ON PAYMENT FOR SERVICES TO THE EMPLOYED AGED AND THE AGED SPOUSES OF EMPLOYEES WHO ARE COVERED BY EMPLOYER GROUP HEALTH PLANS

253.1 General

253.2 Definitions

253.3 Individuals Subject to Limitation on Payment

253.4 Individuals Not Subject to the Limitation on Payment

253.5 Identification of Individuals Subject to This Limitation on Payment

253.6 Identification of Prior Claims by Intermediaries that May Involve Employer Plan Payment

253.7 Action by HHA Where Employer Group Health Plan Is Primary Payer

253.8 Limitation on Right of HHA to Charge Beneficiary

253.9 Crediting Expenses Toward Deductible and Coinsurance Amounts

253.10 Employer Plan Denies Claim for Primary Benefits

253.11 Amount of Secondary Medicare Payments Where EGHP Pays in Part for Items and Services

253.12 Action by Intermediary to Recover Incorrect Payments

253.13 Advice to Physicians and Beneficiaries

253.14 Incorrect EGHP Primary Payment

253.15 Claimant's Right to Take Legal Action Against EGHP

253.16 Special Rules For Services Furnished By Source Outside EGHP Prepaid Health Plan

254 MEDICARE AS SECONDARY PAYER FOR DISABLED INDIVIDUALS

255. HOME HEALTH AGENCY PROTEST OF PAYMENT DETERMINATIONS

256. HHA'S RIGHT TO APPEAL INITIAL DETERMINATION UNDER THE LIMITATION OF LIABILITY PROVISION

256.1 Situations Where HHA May Initiate Appeal

257. BENEFICIARY PROTESTS AND APPEALS OF PAYMENT DETERMINATIONS

258. REOPENDING AND REVISION OF MEDICARE CLAIMS DECISIONS

260. LIMITATION OF LIABILITY FOR HHA CLAIMS UNDER PART A AND B OF MEDICARE PROGRAM

261 APPLICABILITY OF LIMITATION OF LIABILITY TO ITEMS OR SERVICES FURNISHED BY HHAs

262. DETERMINING LIABILITY FOR HHA CLAIMS UNDER SECTION 1879

262.1 Determining Beneficiary's Liability

263. CRITERIA FOR PRESUMING THAT HHA MEETS LIMITATION OF LIABILITY REQUIREMENTS

263.2 Reevaluating HHA's Qualification for Favorable Presumption for a Prior Period

263.3 Determining Denial Rates for HHAs

263.5 Time Period for Calculating the Denial Rate

263.6 Effect of Change in Favorable Presumption

263.7 Treatment of HHA Visit Determinations Later Reversed.

265. DETERMINING WHETHER HHA HAD KNOWLEDGE OF NONCOVERAGE OF SERVICES

265.l Notifying Patient of Noncoverage

265.2 Improper HHA Coverage Decisions

266. ESTABLISHING WHEN BENEFICIARY IS ON NOTICE OF NONCOVERAGE

266.l Determining Date of Notice

266.2 Documentation of Notice

267. PAYMENT UNDER LIMITATION OF LIABILITY

268. APPLICABILITY OF THE LIMITATION OF LIABILITY PROVISION TO HOME HEALTH CARE CLAIMS PAYABLE UNDER PART B

268.l Determining Beneficiary Liability

268.2 Determining HHA Liability

268.3 Withdrawal of Favorable Presumption

269. INDEMNIFICATION PROCEDURES FOR CLAIMS FALLING WITHIN THE LIMITATION OF LIABILITY PROVISION

269.l Determining the Amount of Indemnification

269.2 Notifying the Provider

270. HHA MODEL LETTER TO ESTABLISH BENEFICIARY NOTICE OF MEDICARE NONCOVERAGE

270.1 Instructions for Completing HHA Model Letter (Exhibit l)

12-01    COVERAGE OF SERVICES    200.2

200.    HOME HEALTH AGENCY

A home health agency (HHA) is a public agency or private organization, or a subdivision of such an agency or organization, that meets the following requirements:

1. It is primarily engaged in providing skilled nursing services and other therapeutic services, such as physical therapy, speech-language pathology services, or occupational therapy, medical social services, and home health aide services.
   
   
   1. The law governing the Medicare home health prospective payment system (PPS) requires that all payments be made to the home health agency for any services and medical supplies (as described in §1861(m)(5) of the Social Security Act (the Act except for durable medical equipment (DME)) that are furnished to an individual during the time the individual is under a home health plan of care. This applies without regard to whether or not the item or service was furnished by the agency, by others under contract or arrangement with the agency, or otherwise.
   2. Under the consolidated billing requirement governing home health PPS, we require that the HHA submit all Medicare claims for all home health services included in §1861(m) of the Act, but excluding DME while the eligible beneficiary is under a home health plan of care (see §201 for consolidated billing details). HHAs may provide the covered home health services (except DME) either directly or under arrangement.
   3. An HHA must furnish at least one of the qualifying services directly through agency employees on a visiting basis in a place of residence used as a patient's home, but may furnish the second qualifying service and additional services under arrangement with another HHA or organization.
   
   
   
2. It has policies established by a professional group associated with the agency or organization (including at least one physician and one registered nurse) to govern the services and provides for supervision of such services by a physician or a registered nurse.
3. It maintains clinical records on all patients.
4. It is licensed in accordance with State or local law or is approved by the State or local licensing agency as meeting the licensing standards, where applicable.
5. It meets other conditions found by the Secretary of Health and Human Services to be necessary for health and safety.

For services under hospital insurance, the term "home health agency" does not include any agency or organization that is primarily for the care and treatment of mental disease.

200.1    Subdivision of Agencies.--When the subdivision of an agency, such as the home care department of a hospital or the nursing division of a health department, wishes to participate as a home health agency, the subdivision must meet the conditions of participation and must maintain records in such a way that subdivision activities and expenditures attributable to services provided under the health insurance program are identifiable.

200.2    Arrangements by Home Health Agencies.--

1. A home health agency (HHA) may have others furnish covered items or services through arrangements under which receipt of payment by the HHA for the services discharges the liability of the patient or any other person to pay for the services. Whether the items and services are provided by the HHA itself or by another agency under arrangements, both must agree not to charge the patient for covered items and services and must also agree to return money incorrectly collected.

Rev. 298/Page 13

The agency’s professional supervision over arranged-for services requires application of many of the same quality controls as are applied to services furnished by salaried employees. The agency must accept the patient for treatment in accordance with its administration policies, maintain a complete and timely clinical record of the patient that includes diagnosis, medical history, physician’s orders, and progress notes relating to all services received; maintain liaison with the attending physician with regard to the progress of the patient and to assure that the required plan of treatment is periodically reviewed by the physician; secure from the physician the required certifications and recertifications; and ensure that the medical necessity of such services is reviewed on a sample basis by the agency’s staff or an outside review group.

There are 3 situations in which an HHA may have arrangements with another health organization or person to provide home health services to patients:

1. Where an agency or organization, in order to be approved to participate in the program, makes arrangements with another organization or individual to provide the nursing or other therapeutic services that it cannot provide directly.
2. Where an agency that is already approved for participation, makes arrangements with others to provide services it does not provide.
3. Where an agency that is already approved for participation, makes arrangements with a hospital, skilled nursing facility, or rehabilitation center for services on an outpatient basis because the services involve the use of equipment that cannot be made available to the patient in his/her place of residence.

2. If an agency's subdivision (acting in its capacity as an HHA) makes an arrangement with its parent agency for the provision of certain items or services, there need not be a contract or formal agreement. If, however, the arrangement is made between the HHA and another provider participating in the health insurance program (hospital, skilled nursing facility, or HHA, and, in the case of physical therapy, occupational therapy, or speech-language pathology services, clinics, rehabilitation agencies, and public health agencies), there must be a written statement regarding the services to be provided and the financial arrangements.
3. If the arrangements are with an agency or organization that is not a qualified provider of services, there must be a written contract that includes all of the following:
   1. A description of the services to be provided.
   2. The duration of the agreement and how frequently it is to be reviewed.
   3. A description of how personnel will be supervised.
   4. A statement that the contracting organization will provide services in accordance with the plan of care established by the patient's physician in conjunction with the HHA's staff.
   5. A description of the contracting organization's standards for personnel, including qualifications, functions, supervision, and inservice training.

Page 13.1/Rev. 298

6. A description of the method of determining reasonable costs and reimbursement by the HHA for the specific services to be provided by the contracting organization.
7. An assurance that the contracting organization will comply with title VI of the Civil Rights Act.

4. If an HHA notifies a beneficiary of noncoverage of services that another party has been furnishing under arrangements entered into by the agency, the initial notice, in and of itself, does not negate the contract between the agency and the other party. Unless the evidence shows that the contract has been formally terminated, the beneficiary is still considered to be the agency's patient and the other party to be the representative of the agency. Consequently, if upon initial notice that a service is no longer covered the other party continues to provide services to the patient, the other party is considered to be furnishing the services under arrangements with the home health agency, absent evidence to the contrary. Thus, if a beneficiary appeals the noncoverage of any or all of the arranged for services furnished after the notice, and a ruling is made in favor of the beneficiary, those services ruled on favorably would be reimbursable since they would constitute services furnished under arrangements by a certified HHA. If the denial is sustained, however, the other party cannot bill the beneficiary for the denied services since the HHA, not the other party, is responsible for the care rendered.
   
   

200.3    Rehabilitation Centers.--When the services are of such a nature that they cannot be administered at the patient's residence and are administered at a rehabilitation center which is not participating in the program as a hospital, skilled nursing facility, or HHA, the rehabilitation center must meet certain standards. The physical plant and equipment of such a rehabilitation center must meet all applicable State and local legal requirements for construction, safety, health, and design, including safety, sanitation and fire regulations, building codes, and ordinances. Given the statutory definition, a community mental health center is not considered a rehabilitation center.

201.    HOME HEALTH PROSPECTIVE PAYMENT SYSTEM

The unit of payment under home health PPS is a national 60 day episode rate with applicable adjustments.

201.1    National 60 Day Episode Rate.--

1. Services Included.--The law requires the 60 day episode to include all covered home health services, including medical supplies, paid on a reasonable cost basis. That means the 60-day episode rate includes costs for the six home health disciplines and the costs for routine and non-routine medical supplies. The six home health disciplines included in the 60 day episode rate are: skilled nursing services, home health aide services, physical therapy, speech-language pathology services, occupational therapy services, and medical social services.

The 60 day episode rate also includes amounts for: non-routine medical supplies and therapies that could have been unbundled to part B prior to PPS, ongoing reporting costs associated with the outcome and assessment information set (OASIS), and a one time first year of PPS cost adjustment reflecting implementation costs associated with the revised OASIS assessment schedules needed to classify patients into appropriate case mix categories.

Rev. 298/Page 13.2

2. Excluded Services.--The law specifically excludes durable medical equipment from the 60 day episode rate and consolidated billing requirements. The DME continues to be paid on the fee schedule outside of the PPS rate. The osteoporosis drug is also excluded from the 60 day episode rate but must be billed by the home health agency while a patient is under a home health plan of care since the law requires consolidated billing of osteoporosis drugs. The osteoporosis drug continues to be paid on a reasonable cost basis.

201.2    Adjustments to the 60 Day Episode Rates.--

1. Case Mix Adjustment.--A case mix methodology adjusts payment rates based on characteristics of the patient and his/her corresponding resource needs (e.g., diagnosis, clinical factors, functional factors, service needs). The 60 day episode rates are adjusted by case mix methodology based on data elements from the OASIS. The data elements of the case mix adjustment methodology are organized into three dimensions to capture clinical severity factors, functional severity factors, and service utilization factors influencing case mix. In the clinical, functional and service utilization dimensions, each data element is assigned a score value. The scores are summed to determine the patient’s case mix group.
2. Labor Adjustments.--The labor portion of the 60 day episode rates are adjusted to reflect the wage index based on the site of service of the beneficiary. The beneficiary's location is the determining factor for the labor adjustment. The home health PPS rates are adjusted by the pre-floor and pre-reclassified hospital wage index. The hospital wage index is adjusted to account for the geographic reclassification of hospitals in accordance with §§1886(d)(8)(B) and 1886(d)(10) of the Act. According to the law, geographic reclassification only applies to hospitals. Additionally, the hospital wage index has specific floors that are required by law. Because these reclassifications and floors do not apply to HHAs, the home health rates are adjusted by the pre-floor and pre-reclassified hospital wage index.

201.3    Continuous 60 Day Episode Recertification.--Home health PPS permits continuous episode recertifications for patients who continue to be eligible for the home health benefit. Medicare does not limit the number of continuous episode recertifications for beneficiaries who continue to be eligible for the home health benefit.

201.4    Counting 60-Day Episodes.--

1. Initial Episodes.--The "From" date for the initial certification must match the start of care (SOC) date which is the first billable visit date for the 60 day episode. The "To" date is up to and including the last day of the episode which is not the first day of the subsequent episode. The "To" date can be up to, but never exceed a total of 60 days that includes the SOC date plus 59 days.
2. Subsequent Episodes.--If a patient continues to be eligible for the home health benefit, the home health PPS permits continuous episode recertifications. At the end of the 60 day episode, a decision must be made whether or not to recertify the patient for a subsequent 60 day episode. An eligible beneficiary who qualifies for a subsequent 60 day episode would start the subsequent 60 day episode on day 61. The "From" date for the first subsequent episode is day 61 up to including day 120. The "To" date for the subsequent episode in this example can be up to, but never exceed a total of 60 days that includes day 61 plus 59 days.

Page 13.3/Rev. 298

201.5    Split Percentage Payment Approach to the 60 Day Episode.--In order to ensure adequate cash flow to HHAs, the home health PPS has set forth a split percentage payment approach to the 60 day episode. The split percentage occurs through the request for anticipated payment (RAP) at the start of the episode and the final claim at the end of the episode. For initial episodes, there will be a 60/40 split percentage payment. An initial percentage payment of 60 percent of the episode will be paid at the beginning of the episode and a final percentage payment of 40 percent will be paid at the end of the episode, unless there is an applicable adjustment. For all subsequent episodes for beneficiaries who receive continuous home health care, the episodes will be paid at a 50/50-percentage payment split.

201.6    Physician Signature Requirements for the Split Percentage Payments.--

1. Initial Percentage Payment.--If a physician signed plan of care is not available at the beginning of the episode, the HHA may submit a RAP for the initial percentage payment based on physician verbal orders OR a referral prescribing detailed orders for the services to be rendered that is signed and dated by the physician. If the RAP submission is based on physician verbal orders, the verbal order must be recorded in the plan of care, include a description of the patient's condition and the services to be provided by the home health agency, include an attestation (relating to the physician's orders and the date received per 42 CFR 409.43), and the plan of care is copied and immediately submitted to the physician. A billable visit must be rendered prior to the submission of a RAP.

CMS has the authority to reduce or disapprove requests for anticipated payments in situations when protecting Medicare program integrity warrants this action. Since the request for anticipated payment is based on verbal orders and is not a Medicare claim for purposes of the Act (although it is a claim for purposes of Federal, civil, criminal, and administrative law enforcement authorities, including but not limited to the Civil Monetary Penalties Law, Civil False Claims Act and the Criminal False Claims Act), the request for anticipated payment will be canceled and recovered unless the claim is submitted within the greater of 60 days from the end of the episode or 60 days from the issuance of the request for anticipated payment.

2. Final Percentage Payment.--The plan of care must be signed and dated by a physician who meets the certification and recertification requirements of §424.22 before the claim for each episode for services is submitted for the final percentage payment. Any changes in the plan of care must be signed and dated by a physician.

201.7    Low Utilization Payment Adjustment.--An episode with four or fewer visits is paid the national per visit amount by discipline adjusted by the appropriate wage index based on the site of service of the beneficiary. Such episodes of four or fewer visits are paid the wage adjusted per visit amount for each of the visits rendered instead of the full episode amount. The national per visit amounts by discipline (skilled nursing, home health aide, physical therapy, speech-language pathology, occupational therapy, and medical social services) are updated annually by the applicable market basket for each visit type and published annually.

Rev. 298/Page 13.4

201.8    Partial Episode Payment Adjustment.--

1. Partial Episode Payment Adjustment Criteria.--The partial episode payment adjustment (PEP) accounts for key intervening events in a patient's care defined as:
   • A beneficiary elected transfer, or
   • A discharge resulting from the beneficiary reaching the treatment goals in the original plan of care and returning to the same HHA during the 60 day episode.

The intervening event defined as the beneficiary elected transfer or discharge and return to the same HHA during the 60 day episode warrants a new 60 day episode for purposes of payment. A start of care OASIS assessment and physician certification of the new plan of care are required. When a new 60 day episode begins due to the intervening event of the beneficiary elected transfer or discharge and return to the same HHA during the 60 day episode, the original 60 day episode is proportionally adjusted to reflect the length of time the beneficiary remained under the agency's care prior to the intervening event.

2. Methodology Used To Calculate PEP Adjustment.--The PEP adjustment for the original 60 day episode is calculated to reflect the length of time the beneficiary remained under the care of the original HHA based on the first billable visit date through and including the last billable visit date. The PEP adjustment is calculated by determining the actual days served by the original HHA (first billable visit date through and including last billable visit date as a proportion of 60 multiplied by the original 60 day episode payment).
3. Application of Therapy Threshold to PEP Adjusted Episode.--The therapy threshold item included in the case mix methodology used in home health PPS is not combined or prorated across episodes. Each episode whether full or proportionately adjusted is subject to the therapy threshold for purposes of case mix adjusting the payment for that individual patient's resource needs.
4. Common Ownership Exception to PEP Adjustment.--If an HHA has a significant ownership as defined in §424.22, then the PEP adjustment would not apply in those situations of beneficiary elected transfer. Those situations would be considered services provided under arrangement on behalf of the originating HHA by the receiving HHA with the ownership interest until the end of the episode. The common ownership exception to the transfer PEP adjustment does not apply if the beneficiary moved out of their MSA or non-MSA during the 60 day episode before the transfer to the receiving HHA.
5. Beneficiary Elected Transfer Verification.--In order for a receiving HHA to accept a beneficiary elected transfer, the receiving HHA must document that the beneficiary has been informed that the initial HHA will no longer receive Medicare payment on behalf of the patient and will no longer provide Medicare covered services to the patient after the date of the patient’s elected transfer in accordance with current patient rights requirements at 42 CFR 484.10(e). The receiving HHA must also document in the record that it accessed the regional home health intermediaries (RHHI) inquiry system to determine whether or not the patient was under an established home health plan of care and contacted the initial HHA on the effective date of transfer. In the rare circumstance of a dispute between HHAs, if the receiving HHA can provide documentation of its notice of patient rights on Medicare payment liability provided to the patient upon transfer and the contact of the initial HHA of the transfer date, then the initial HHA will be ineligible for payment in addition to the appropriate PEP adjustment. If the receiving HHA cannot provide the appropriate documentation, the receiving HHA’s RAP and/or final claim will be cancelled and full episode payment will be provided to the initial HHA.

Page 13.5/Rev. 298

201.9    Significant Change in Condition Payment Adjustment (SCIC).--If a patient experiences a significant change in condition during a 60 day episode that was not envisioned in the original plan of care, the 60 day episode rate may be changed with a SCIC adjustment to reflect the payment level to meet the resource needs of the patient during the 60 day episode.

1. Significant Change in Condition Adjustment Criteria.--In order to receive a new case mix assignment due to an unanticipated significant change in condition, the HHA must complete an OASIS assessment and obtain the necessary physician change orders reflecting the significant change in treatment approach in the patient's plan of care. The total significant change in condition payment adjustment is a proportional payment adjustment reflecting the time both before and after the patient experienced a significant change in condition during the 60 day episode.
2. Methodology Used to Calculate the SCIC Adjustment.--The SCIC payment adjustment is calculated in two parts. The first part of the SCIC payment adjustment reflects the adjustment to the payment level prior to the patient's significant change in condition during the 60 day episode. The first part of the SCIC adjustment is determined by taking the span of days of the first billable visit date through and including the last billable visit date prior to the patient's significant change in condition as a proportion of 60 multiplied by the original episode amount. The second part of the SCIC payment adjustment reflects the adjustment to the level of payment after the significant change in the patient's condition occurs during the 60 day episode. The second part of the SCIC adjustment is calculated using the span of days of the first billable visit date through and including the last billable visit date through the balance of the 60 day episode. The agency is not constrained to bill for a SCIC for a higher HHRG if the net effect is a lower payment for the episode than if the SCIC had not occurred. Because the intent of the SCIC was not to lower the total episode payment when patients actually required more intensive services, the HHA is not forced to bill for a SCIC in this circumstance. However, where the SCIC reflects a lower HHRG due to unanticipated improvement in patient condition, the SCIC must be billed.
3. Application of Therapy Threshold to the SCIC and Relationship of Therapy Need Changes to the SCIC Adjustment.--The therapy threshold item included in the case mix methodology used in home health PPS is not combined or prorated across episodes. Since the SCIC adjustment occurs within a given 60 day episode, all therapy provided within a SCIC adjusted episode is counted toward the therapy threshold for the episode. The intermediary system will not automatically upgrade a non-therapy HHRG to a therapy HHRG when the final claim indicates 10 or more therapy visits even when 10 or more therapy visits are furnished and recorded on the claim. If the therapy threshold is the only case mix item that requires adjustment, the HHA may cancel and resubmit a RAP with the corrected HHRG that reflects the upwardly revised therapy level. However, if the patient's actual therapy receipt as reflected on the final claim is lower than the threshold for the high therapy case mix group projected at the initiation of the episode, the intermediary system will automatically lower the reimbursement level to the lower therapy case mix group.
4. Relationship Between SCIC Adjustments and the Low Utilization Payment Adjustment.--The SCIC adjustment occurs within a given 60 day episode and does not restart the 60 day episode clock. The LUPA adjustment applies to a total 60 day episode period. As long as the total SCIC adjusted episode, comprised of both the pre-SCIC and post-SCIC parts, has more than four visits, the total episode would not be considered a LUPA situation. The LUPA applies to the total number of visits provided in a given 60 day episode.

Rev. 298/Page 13.6

5. Intervening Hospital or SNF Stay SCIC Adjustment.--HHAs have the option to discharge the patient within the scope of their own operating policies; however, an HHA discharging a patient as a result of hospital (SNF or rehab facility) admission with the patient returning to home health services at the same HHA during the 60 day episode will not be recognized by Medicare as a discharge for billing and payment purposes. An intervening hospital (SNF or rehab facility) stay will result in either an applicable SCIC adjustment or, if the resumption of care OASIS assessment upon return to home health does not indicate a change in case-mix level, a full 60 day episode will be provided spanning the start of care date prior to the hospital (SNF or rehab facility) admission, through and including the days of the hospital admission, and ending 59 days after the original start of care date.

201.10    Outlier Payments.--When cases experience an unusually high level of services in a 60 day period, Medicare systems will provide additional or "outlier" payments to the case-mix and wage adjusted episode payment. Outlier payments can result from medically necessary high utilization in any or all-home health service disciplines. CMS makes outlier payments when the cost of care exceeds a threshold dollar amount. The outlier threshold for each case-mix group is the episode payment amount for that group, the PEP adjustment amount for the episode or the total SCIC adjustment amount for the episode plus a fixed dollar loss amount is the same for all case-mix groups. The outlier payment is a proportion of the amount of imputed costs beyond the threshold. CMS calculates the imputed cost for each episode by multiplying the national per visit amount of each discipline by the number of visits in the discipline and computing the total imputed cost for all disciplines. If the imputed cost for the episode is greater than the sum of the case mix and wage adjusted episode payment plus the fixed dollar loss amount (the outlier threshold), a set percentage (the loss sharing ratio) of the difference between the imputed amount and outlier threshold will be paid to the HHA as a wage adjusted outlier payment in addition to the episode payment. The amount of the outlier payment is determined as follows:

• Calculate the case-mix and wage adjusted episode payment;
• Add the wage adjusted fixed dollar loss amount. The sum of steps 1 & 2 is the outlier threshold for the episode;
• Multiply the wage adjusted national per visit rate for each home health discipline by the total number of visits for each home health discipline to determine the imputed cost of all visits. The result yields the total imputed costs for the episode;
• Subtract the total imputed costs for the episode (total from Step 3) from the sum of the case-mix and wage adjusted episode payment and the wage adjusted fixed dollar loss amount (sum of Steps 1 & 2—outlier threshold);
• Multiply the difference by the loss sharing ratio; and
• The result of Step 5 is wage index adjusted. That total amount is the outlier payment for the episode.

201.11    Discharge Issues.--

1. Hospice Election Mid-Episode.--If a patient elects hospice before the end of the episode and there was no SCIC, PEP or LUPA adjustment, the HHA will receive a full episode payment. Home health PPS does not change the current rules that permit a hospice patient to receive home health services for a condition unrelated to his/her reason for hospice election. Consistent with all episodes in which a patient receives four or fewer visits, the episode with four or fewer visits in

Page 13.7/Rev. 298

which a patient elects hospice would be paid at the low utilization payment adjusted amount. In the event of a patient election of hospice during a SCIC adjusted episode, the total SCIC adjusted episode would constitute the full episode payment. However, the HHA is not constrained to bill for a SCIC for a higher case mix group if the net effect is a lower payment for the episode than if the SCIC had not occurred.

2. Patient Death's.--The documented event of a patient's death would result in a full episode payment, unless the death occurred in a low utilization payment adjusted episode. Consistent with all episodes in which a patient receives four or fewer visits, if the patient's death occurred during an episode with four or fewer visits, the episode would be paid at the low utilization payment adjusted amount. In the event of a patient's death during a SCIC adjusted episode, the total SCIC adjusted episode would constitute the full episode payment. However, the HHA is not constrained to bill for a SCIC for a higher case mix group if the net effect is a lower payment for the episode than if the SCIC had not occurred.
3. Patient is No Longer Eligible for Home Health (e.g., no longer homebound, no skilled need).--If the patient is discharged because he or she is no longer eligible for the Medicare home health benefit and has received more than four visits, then the HHA would receive full episode payment unless the patient becomes subsequently eligible for the Medicare home health benefit during the same 60 day episode and later transferred to another HHA or returned to the same HHA, then the latter situation would result in a PEP adjustment.
4. Discharge due to Patient Refusal of Services or is a Documented Safety Threat, Abuse Threat, or is Non-Compliant.--If the patient is discharged because he or she refuses services or becomes a documented safety, abuse or non-compliance discharge and has received more than four visits, then the HHA would receive full episode payment unless the patient becomes subsequently eligible for the Medicare home health benefit during the same 60 day episode and later transferred to another HHA or returned to the same HHA, then the latter situation would result in a PEP adjustment.
5. Patient Becomes Managed Care Eligible Mid Episode.--If a patient becomes HMO eligible mid episode, the 60 day episode payment will be proportionally adjusted with a PEP adjustment.
6. Intervening Hospital or SNF Stay SCIC Adjustment.--HHAs have the option to discharge the patient within the scope of their own operating policies; however, an HHA discharging a patient as a result of hospital (SNF or rehab facility) admission during the 60 day episode will not be recognized by Medicare as a discharge for billing and payment purposes. An intervening hospital (SNF or rehab facility) stay will result in either an applicable SCIC adjustment or, if the resumption of care OASIS assessment upon return to home health does not indicate a change in case-mix level, a full 60 day episode will be provided spanning the start of care date prior to the hospital (SNF or rehab facility) admission, through and including the days of the hospital admission, and ending 59 days after the original start of care date.
7. Submission of Final Claims Prior to the End of the 60 Day Episode.--The claim may be submitted upon discharge before the end of the 60 day episode. However, subsequent adjustments to any payments based on the claim may be made due to an intervening event resulting in a PEP adjustment or other adjustment.

Rev. 298/Page 13.8

8. Patient Discharge and Financial Responsibility for Part B Bundled Medical Supplies and Services.--As discussed in detail under §201.12, the law governing the Medicare home health PPS requires the HHA to provide all bundled home health services (except DME) either directly or under arrangement while a patient is under a home health plan of care during an open episode. The HHA is responsible for providing all covered home health services (except DME) and the bundled Part B medical supplies and therapy services that could have been previously unbundled prior to PPS either directly or under arrangement while a patient is under a home health plan of care during an open episode. Once the patient is discharged, the HHA is no longer responsible for providing home health services including the bundled Part B medical supplies and therapy services.
9. Discharge Issues Associated With Inpatient Admission Overlapping Into Subsequent Episodes.--If a patient is admitted to an inpatient facility and the inpatient stay overlaps into what would have been the subsequent episode and there is no reassessment or recertification of the patient, then the certification begins with the new start of care date after inpatient discharge.

201.12    Consolidated Billing.--The law governing the Medicare home health PPS effective October 1, 2000, requires that payment for home health services (including medical supplies described in §1861(m)(5) of the Social Security Act (the Act), but excluding DME to the extent provided for in such section) furnished to an individual who (at the time the item or service was furnished) is under a plan of care of a HHA, be made to the agency (without regard to whether or not the item or service was furnished by the agency, by others under arrangement with them made by the agency, or under any other contracting or consulting arrangement, or otherwise). Under the consolidated billing requirement governing home health PPS, we require that the HHA submit all Medicare claims for all home health services included in §1861(m) of the Act, but excluding DME provided while the eligible beneficiary is under a plan of care. The HHAs must provide the covered home health services (except DME) either directly or under arrangement. Payment for all services and supplies, with the exception of the osteoporosis drugs and DME, are included in the PPS episodic rate.

1. Home Health Services Subject to Consolidated Billing Requirements.--The home health services included in the consolidated billing governing home health PPS are:
   • Part-time or intermittent skilled nursing services;
   • Part-time or intermittent home health aide services;
   • Physical therapy;
   • Speech-language pathology services;
   • Occupational therapy;
   • Medical social services;
   • Routine and non-routine medical supplies;
   • Covered osteoporosis drug as defined in §1861(kk) of the Act, but excluding other drugs and biologicals;
   • Medical services provided by an intern or resident in-training of the program of the hospital in the case of an HHA that is affiliated or under common control with a hospital with an approved teaching program; and

Page 13.9/Rev. 298

• Home health services defined in §1861(m) provided under arrangement at hospitals, SNFs, or rehabilitation centers when they involve equipment too cumbersome to bring to the home or are furnished while the patient is at the facility to receive such services.

2. Medical Supplies.--The law requires all medical supplies (routine and non-routine) bundled to the agency while the patient is under a home health plan of care. The agency that establishes the episode is the only entity that can bill and receive payment for medical supplies during an episode for a patient under a home health plan of care. Both routine and non-routine medical supplies are included in the base rates for every Medicare home health patient regardless of whether or not the patient requires medical supplies during the episode. Due to the consolidated billing requirements, we provided additional amounts in the base rates for those non-routine medical supplies that have a duplicate Part B code that could have been unbundled to Part B prior to PPS. See §206.4 for detailed discussion of medical supplies.

Medical supplies used by the patient, provider, or other practitioners under arrangement on behalf of the agency (other than physicians) are subject to consolidated billing and bundled to the HHA episodic payment rate. Once a patient is discharged from home health and not under a home health plan of care, the HHA is not responsible for medial supplies.

DME, including supplies covered as DME, are paid separately from the PPS rates and are excluded from the consolidated billing requirements governing PPS. The determining factor is the medical classification of the supply, not the diagnosis of the patient. For example, infusion therapy will continue to be covered under the DME benefit separately paid from the PPS rate and excluded from the consolidated billing requirements governing PPS. The DME supplies that are currently covered and paid in accordance with the DME fee schedule as category SU are billed under the DME benefit and not included in the bundled HHA episodic payment rate. The HHAs are not required to do consolidated billing of SU supplies.

Osteoporosis drugs are included in consolidated billing under the home health benefit. However, payment is not bundled into the episodic payment rate. The HHAs must bill for osteoporosis drugs in accordance with billing instructions. Payment is in addition to the episodic payment rate.

3. Relationship Between Consolidated Billing Requirements and Part B Supplies and Part B Therapies Included in the Baseline Rates That Could Have Been Unbundled Prior to PPS That No Longer Can Be Unbundled.--The HHA is responsible for the services provided under arrangement on their behalf by other entities. Covered home health services at §1861(m) of the Act (except DME) are included in the baseline PPS rates and subject to the consolidated billing requirements while the patient is under a plan of care of the HHA. The time the services are bundled is while the patient is under a home health plan of care.

Physician services or nurse practitioner services that are bundled into the physician fee schedule payments are not recognized as a home health service included in the PPS rate. Supplies incident to a physician service or related to a physician service billed to the carrier are not subject to the consolidated billing requirements. The physician would not be acting as a supplier billing the DMERC in this situation.

Therapies (physical therapy, occupational therapy, and speech-language pathology services) are covered home health services that are included in the baseline rates and subject to the consolidated billing requirements. In addition to therapies that had been paid on a cost basis under home health, we have included in the final rates additional amounts for Part B therapies that could have been unbundled prior to PPS, these therapies are subject to the consolidated billing requirements. There are revenue center codes that reflect the ranges of outpatient physical therapy, occupational therapy, and speech-language pathology services and HCPCs codes that reflect physician supplier codes that

Rev. 298/Page 13.10

are physical therapy, occupational therapy, and speech-language pathology services by code definition and are subject to the consolidated billing requirements. Therefore, the above mentioned therapies must be provided directly or under arrangement on behalf of the HHA while a patient is under a home health plan of care cannot be separately billed to Part B during an open 60 day episode.

4. Freedom of Choice Issues.--A beneficiary exercises his or her freedom of choice for the services under the home health benefit listed in §1861(m) of the Act, including medical supplies, but excluding DME covered as a home health service by choosing the HHA. Once a home health patient chooses a particular HHA, he or she has clearly exercised freedom of choice with respect to all items and services included within the scope of the Medicare home health benefit (except DME). The HHA's consolidated billing role supersedes all other billing situations the beneficiary may wish to establish for home health services covered under the scope of the Medicare home health benefit during the certified episode.
5. Knowledge of Services Arranged for on Behalf of the HHA.--The consolidated billing requirements governing home health PPS requires that the HHA provide all covered home health services (except DME) either directly or under arrangement while a patient is under a home health plan of care. Providing services either directly or under arrangement requires knowledge of the services provided during the episode. In addition, in accordance with current Medicare conditions of participation and Medicare coverage guidelines governing home health, the patient's plan of care must reflect the physician ordered services that the HHA provides either directly or under arrangement. An HHA would not be responsible for payment in the situation in which they have no prior knowledge of the services provided by an entity during an episode to a patient who is under their home health plan of care. An HHA is responsible for payment in the situation in which services are provided to a patient by another entity, under arrangement with the HHA, during an episode in which the patient is under the HHA’s home health plan of care. However, it is in the best interest of future business relationships to discuss the situation with any entity that seeks payment from the HHA during an episode in an effort to resolve any misunderstanding and avoid such situations in the future.

201.13    Telehealth.--An HHA may adopt telehealth technologies that it believes promote efficiencies or improve quality of care. Telehomecare encounters do not meet the definition of a visit set forth in regulations at 42 CFR 409.48(c) and the telehealth services may not be counted as Medicare covered home health visits or used as qualifying services for home health eligibility. An HHA may not substitute telehealth services for Medicare-covered services ordered by a physician. However, if an HHA has telehealth services available to its clients, a doctor may take their availability into account when he or she prepares a plan of treatment (i.e., may write requirements for telehealth services into the POT). Medicare eligibility and payment would be determined based on the patient’s characteristics and the need for and receipt of the Medicare covered services ordered by the physician. If a physician intends that telehealth services be furnished while a patient is under a home health plan of care, the services should be recorded in the plan of care along with the Medicare covered home health services to be furnished.

201.14    Change of Ownership Relationship to Episodes Under PPS.--

1. Change of Ownership With Assignment.--When there is a change of ownership and the new owner accepts assignment of the existing provider agreement, the new owner is subject to all the terms and conditions under which the existing agreement was issued. The provider number remains the same if the new HHA owner accepts assignment of the existing provider agreement. As long as the new owner complies with the regulations governing home health PPS, billing and

Page 13.11/Rev. 298

payment for episodes with applicable adjustments for existing patients under an established plan of care will continue on schedule through the change in ownership with assignment of provider number. The episode would be uninterrupted spanning the date of sale. The former owner is required to file a terminating cost report. Episodes ending on or before the date of sale would be attributed to the former owner's cost report and the episode ending date after the date of sale would be attributed to the new owner's cost report.

2. Change of Ownership Without Assignment.--When there is a change of ownership and the new owner does not take the assignment of the existing provider agreement, the provider agreement and provider number of the former owner is terminated. The former owner will receive partial episode payment adjusted payments in accordance with the methodology set forth in §484.235 based on the last billable visit date for existing patients under a home health plan of care ending on or before the date of sale. The former owner is required to file a terminating cost report. The new owner cannot bill Medicare for payment until the effective date of the Medicare approval. The new HHA will not be able to participate in the Medicare program without going through the same process as any new provider, which includes an initial survey. Once the new owner is Medicare-approved, the HHA may start a new episode clock for purposes of payment, OASIS assessment, and certification of the home health plan of care for all new patients in accordance with the regulations governing home health PPS, effective with the date of the new provider certification.
   
   
3. Change of Ownership-Mergers.--The merger of a provider corporation into another corporation constitutes a change of ownership. In the case of a merger of Agency A into Agency B, Agency A's provider agreement and its provider number are terminated. Agency B retains its existing provider agreement and provider number. The former owner (Agency A) will receive partial episode payment adjusted payments in accordance with the methodology set forth in §484.235 based on the last billable visit date for existing patients under a home health plan of care ending on or before the date of sale. The former owner (Agency A) is required to file a terminating cost report. The surviving HHA (Agency B) must start a new episode for payment, OASIS assessment and certification of the home health plan of care for all patients admitted after the merger, including former patients of Agency A, at the next skilled visit after the official merger date.

Rev. 298/Page 13.12

203.    CONDITIONS TO BE MET FOR COVERAGE OF HOME HEALTH SERVICES

Home health agency (HHA) services are covered by Medicare when the following criteria are met:

• The person to whom the services are provided is an eligible Medicare beneficiary.
  
  
• The HHA that is providing the services to the beneficiary has in effect a valid agreement to participate in the Medicare program.
  
  
• The beneficiary qualifies for coverage of home health services as described in §204.
  
  
• The services for which payment is claimed are covered as described in §§205 and 206.
  
  
• Medicare is the appropriate payer.
  
  
• The services for which payment is claimed are not otherwise excluded from payment.
  
  

203.1    Reasonable and Necessary Services.--

1. Background.--In enacting the Medicare program, Congress recognized that the physician would play an important role in determining utilization of services. The law requires that payment may be made only if a physician certifies the need for services and establishes a plan of care. The Secretary is responsible for ensuring that the claimed services are covered by Medicare, including determining whether they are "reasonable and necessary."
   
   
2. Determination of Coverage.--The intermediary's decision on whether care is reasonable and necessary is based on information reflected in the home health plan of care (Form CMS-485) and supplementary forms (e.g., comprehensive assessment including the OASIS as required by 42 CFR 484.55 or an HHA's internal form), and the medical record concerning the unique medical condition of the individual patient. A coverage denial is not made solely on the basis of the reviewer's general inferences about patients with similar diagnoses or on data related to utilization generally, but is based upon objective clinical evidence regarding the patient's individual need for care. Additional information from the medical record must be requested when medical information needed to support a decision is not clearly present. The following examples illustrate this statement.
   
   

Examples of cases in which development of the case is needed:

Rev. 298/Page 13.16

Examples of cases that would be denied without further development:

Examples of cases in which payment may be made without further development:

Page 13.17/Rev. 298

203.2    Impact of Other Available Caregivers and Other Available Coverage on Medicare Coverage of Home Health Services.--Where the Medicare criteria for coverage of home health services are met, patients are entitled by law to coverage of reasonable and necessary home health services. Therefore, a patient is entitled to have the reasonable and necessary services reimbursed by Medicare without regard to whether there is someone available to furnish the services. However, where a family member or other person is or will be providing services that adequately meet the patient's needs, it would not be reasonable and necessary for HHA personnel to furnish such services. Ordinarily it can be presumed that there is no able and willing person to provide the services being rendered by the HHA unless the patient or family indicates otherwise and objects to the provision of the services by the HHA, or the HHA has first hand knowledge to the contrary.

Similarly, a patient is entitled to have the reasonable and necessary home health services reimbursed by Medicare even if the patient would qualify for institutional care (e.g., hospital care or skilled nursing facility care).

Medicare payment should be made for reasonable and necessary home health services where the patient is also receiving supplemental services that do not meet Medicare's definition of skilled nursing care or home health aide services.

203.3    Use of Utilization Screens and "Rules of Thumb".--Medicare recognizes that determinations of whether home health services are reasonable and necessary must be based on an assessment of each patient's individual care needs. Therefore, denial of services based on numerical utilization screens, diagnostic screens, diagnosis or specific treatment norms is not appropriate.

204.    CONDITIONS THE PATIENT MUST MEET TO QUALIFY FOR COVERAGE OF HOME HEALTH SERVICES

To qualify for Medicare coverage of any home health services, the patient must meet each of the criteria described in this section. Patients who meet each of these criteria are eligible to have payment made on their behalf for the services discussed in §§205 and 206.

204.1    Confined to the Home.--

1. Patient Confined to The Home.--In order for a patient to be eligible to receive covered home health services under both Part A and Part B, the law requires that a physician certify in all cases that the patient is confined to his/her home. (See §240.l.) An individual does not have to be bedridden to be considered as confined to the home. However, the condition of these patients should be such that there exists a normal inability to leave home and, consequently, leaving home would require a considerable and taxing effort. If the patient does in fact leave the home, the patient may nevertheless be considered homebound if the absences from the home are infrequent or for periods of relatively short duration, or are attributable to the need to receive health care treatment. Absences attributable to the need to receive health care treatment include, but are not limited to, attendance at adult day centers to receive medical care, ongoing receipt of outpatient kidney dialysis, and the receipt of outpatient chemotherapy or radiation therapy. Any absence of an individual from the home attributable to the need to receive health care treatment, including regular absences for the purpose of participating in therapeutic, psychosocial, or medical treatment in an adult day-care program that is licensed or certified by a State, or accredited, to furnish adult day-care services in a State shall not disqualify an individual from being considered to be confined to his home. Any other absence of an individual from the home shall not so disqualify an individual if the absence is of an infrequent or of relatively short duration. For purposes of the preceding sentence, any absence for the purpose of attending a religious service shall be deemed to be an absence of infrequent or short duration. It is expected that in most instances, absences from the home that occur will be for the purpose of receiving health care treatment. However, occasional absences from the home for nonmedical purposes, e.g., an occasional trip to the barber, a walk around the block, a drive, attendance at a family reunion, funeral, graduation, or other infrequent or unique event would not necessitate a finding that the patient is not homebound if the absences are undertaken on an infrequent basis or are of relatively short duration and do not indicate that the patient has the capacity to obtain the health care provided outside rather than in the home. The examples provided above are not all-inclusive and are meant to be illustrative of the kinds of infrequent or unique events a patient may attend.

Generally speaking, a patient will be considered to be homebound if he/she has a condition due to an illness or injury that restricts his/her ability to leave his/her place of residence except with the aid of supportive devices such as crutches, canes, wheelchairs, and walkers, the use of special transportation, or the assistance of another person or if leaving home is medically contraindicated. Some examples of homebound patients that illustrate the factors used to determine whether a homebound condition exists would be: (1) a patient paralyzed from a stroke who is confined to a wheelchair or requires the aid of crutches in order to walk; (2) a patient who is blind or senile and requires the assistance of another person to leave his/her residence; (3) a patient who has lost the use of his/her upper extremities and, therefore, is unable to open doors, u