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By Deborah J. Juneau

The Department of Health and Human Services, Centers for Medicare and Medicaid (“CMS”) issued a final rule on February 2, 2016 regarding the requirements for a face-to-face encounter for patients receiving home health services payable by Medicaid.  In order to ensure that states and providers appropriately implement the provisions in the final rule, CMS revised the effective date of the rule to be July 1, 2016 and stated it would delay compliance with the rule for up to one year if the state’s legislature met in 2016 or two years if not.

The rules pertaining to this requirement under the Medicaid program differ somewhat from the requirements under the Medicare program and incorporates revisions to address rulings in Supreme Court and federal appellate court cases.  CMS stated the face-to-face requirement does not apply to Medicaid managed care.  However, the benefits offered in the Medicaid managed care plans must be the same as those offered in the state plan.

CMS revised the regulations to ensure that individuals with an “illness, injury, or disability”, including congenital conditions and developmental disabilities, would be eligible for Medicaid home health services. Coverage of Medicaid home health services cannot be contingent upon the beneficiary needing nursing or therapy services. Home health services must be provided to the beneficiary based on his or her physician’s orders as part of a written plan of care that the physician reviews every 60 days; however, a beneficiary’s need for medical supplies, equipment or appliances need only be reviewed by the physician on an annual basis, with more frequent reviews as determined on a case-by-case basis based on the nature of the item prescribed (e.g., items needed only on a short term basis).   States are not required to cover medically unnecessary services and may set medical necessity criteria based on accepted medical practices and standards.  States have considerable flexibility in designing payment methodologies for covered services and could cover the physician certification for home health care as a physician service or as a component part of the home health services.  The face-to-face encounter could be identified through existing evaluation and management (“E&M”) CPT codes.

One important difference between home health services under the Medicare and Medicaid programs is whether the patient must be home bound to qualify for services.  Under Medicare, the patient must be homebound.  However, under Medicaid, the home health services cannot be restricted to patients who are home bound and cannot be restricted to services furnished in the home itself.  Home health services do not include services for individuals receiving inpatient services in a hospital, nursing facility, intermediate care facility for individuals with developmental disabilities, or other setting in which payment is or could be made under Medicaid for inpatient services that include room and board.  However, home health services would be covered for individuals residing in other types of facilities.  In addition, home health services apply to all beneficiaries, including those eligible for state plan services based on enrollment in a home and community based waiver program.

The term “normal life activities” refers to activities that could occur in or out of the individual’s home.  CMS’ revised language “suitable for use in a non-institutional setting in which normal life activities take place” demonstrates that states cannot deny requests for items on the basis that the items are for use outside the home.  However, states may establish medical necessity criteria and may continue to use activities of daily living as medical necessity criteria.  This expanded definition does not include environmental or structural housing modifications or equipment designed to have a general use and to serve more people than the Medicaid beneficiary. Additionally, vehicular modifications do not fall under the definition of medical equipment.  States may preclude coverage for duplicative items or could provide coverage for rental rather than purchase of the items, if cost effective.

A physician must order the individual’s services under the Medicaid home health benefit.  CMS interprets the term “order” to be synonymous with Medicare’s term “certify”.  Because the term “DME” is used differently under the Medicare and Medicaid programs, CMS uses the term “medical supplies, equipment, and appliances” or, alternatively, “medical equipment” in the final rule.

All beneficiaries needing home health services are subject to the face-to-face encounter without exception. The face-to-face encounter is required only for the initial ordering of home health services and for all episodes initiated with the Start-of-Care OASIS assessment.  There is no recertification face-to-face requirement. The physician must review the plan of care every 60 days.

The face-to-face encounter for Medicaid home health services must occur not more than 90 days before or 30 days after the start of services.  For medical equipment, the face-to-face encounter must occur not more than 6 months prior to the start of services.   These time frames are aligned with the time frames required under Medicare. The expectation is that the face-to-face encounter will occur within the 90 days before the start of services but the 30-day post start of care deadline is provided to accommodate extenuating circumstances where immediate commencement of home health services is required before a physician encounter can be scheduled.

The ordering physician must document at the time of the face-to-face encounter how the health status of the Medicaid beneficiary is related to the primary reason the beneficiary requires home health services, including medical equipment.  States may also require the face-to-face encounter to include instruction on how to properly use and care for the medical equipment at issue.  Although the proposed rule would have required the documentation to be in a separate and distinct area on the written order or an addendum to the order that is easily identifiable and clearly documented or a separate document easily identifiable and clearly titled in the beneficiary’s medical record, those requirements were eliminated in the final rule.  Instead, CMS will defer to the states as to the documentation requirements.

For the Medicaid home health services, the face-to-face encounter may be conducted by the physician or by a Non-Physician Practitioner (“NPP”), including a nurse practitioner or certified nurse specialist working in collaboration with the physician and in accord with state law, or a certified nurse midwife or a physician assistant under the supervision of the physician. If state law recognizes resident physicians as physicians, the resident physician may conduct the face-to-face encounter. Although the face-to-face encounter may be conducted by a NPP, the physician must document that the face-to-face encounter occurred and must issue the order for home health services.  Certified nurse midwives are not authorized to conduct face-to-face encounters required for medical supplies, equipment, and appliances; nor are they included in the list of NPPs for purposes of DME orders.

When a beneficiary is admitted to home health upon discharge from a hospital or post-acute care setting, the physician who attended the patient in the hospital or post-acute care setting can inform the ordering physician regarding his encounters with the beneficiary to satisfy the face-to-face encounter requirement, much as a NPP would do. Or, the attending physician may serve as the ordering physician for home health services, provided that the ordering physician also completes the written plan of care.  Similarly, the ordering physician who completes the plan of care can rely upon the in-person assessment of an emergency department physician or of a physician working on behalf of an inpatient rehab or skilled nursing facility prior to the beneficiary’s discharge.  An urgent care physician may be able to attest to the completion of the face-to-face encounter if he can develop the written plan of care and review the plan of care every 60 days.  Otherwise, an additional physician performing the functions must meet the requirements.  If a state has a reciprocity agreement with neighboring states to allow Medicaid beneficiaries in one state to receive services in another state, a physician in the neighboring state could conduct the face-to-face encounter.

If an attending acute or post-acute care physician or allowed NPP conducts the face-to face encounter, the attending acute or post-acute care physician or NPP must communicate the clinical findings of the face-to-face encounter to the ordering physician so that he can document the face-to-face encounter and so that he has sufficient information to determine the need for home health services, in the absence of conducting the face-to-face encounter himself. The clinical findings must be reflected in a written or electronic document included in the beneficiary’s medical record by the physician or the NPP and can be included in clinical and progress notes and discharge summaries.  For example, the ordering physician could attach the discharge summary by an attending physician who performed the face-to-face encounter in an acute or post-acute care facility to the order for home health services as an addendum and would simply need to sign and date the discharge order. The ordering physician must ensure that appropriate medical records are kept, and the home health agency should also maintain a copy of the face-to-face documentation.

Additionally, the face-to-face encounter may be conducted through the use of telehealth.  The Medicaid term “telemedicine” was modeled on the Medicare term “telehealth services” but allows states flexibility in keeping with their general authority to regulate medical professions.  The face-to-face encounter could be met by a telehealth delivery model that is recognized by the state as a physician or NPP encounter under its approved state plan.  CMS would not proscribe the locations and/or technologies the states may use to meet the face-to-face requirement through telehealth and left that to the states to regulate.  However, telephone calls or emails will not replace the face-to-face encounter.

CMS provided a framework for the term “medical supplies, equipment, and appliances” under which states could adopt a reasonable definition of the term.  Medical supplies, equipment, and appliances should be suitable for use in the home, but that does not prohibit use of covered items outside the home. States may not deny requests for items on the basis that they are for use outside the home.  The covered items must be necessary for everyday activities, and there is no limitation on the location in which the items may be used. The items must be suitable for use in a non-institutional setting in which normal life activities take place.  In order to better align the definitions of home health equipment and appliances under Medicaid and DME under Medicare, CMS defined home health supplies, equipment, and appliances to mean:  a) items that are primarily and customarily used to serve a medical purpose; b) generally not useful to the individual in the absence of an illness or injury; c) can withstand repeated use; and d) can be reusable or removable.  However, unlike the Medicare provisions, CMS did not define the expected life of the equipment and did not limit the use of the equipment to the individual’s home.  CMS also defined supplies as health care related items that are consumable or disposable or cannot withstand repeated use by more than one individual.  CMS did not require the supplies to be incidental to other covered services.

If Medicare does not require a face-to-face encounter for a DME item, neither would Medicaid require a face-to-face encounter for the same item of medical supplies, equipment and appliances.  States are not restricted to the items covered under DME in the Medicare program in determining those items that would be covered under the Medicaid program. States could expand the list of items under Medicare for which a face-to-face encounter is required under Medicaid but cannot eliminate items from the list.  A face-to-face encounter would not be required for refills, repairs, or service of equipment.

States may have a list of pre-approved medical equipment, supplies, and appliances but cannot use the list as an absolute limit.  States must provide and make available to individuals a reasonable and meaningful procedure to request items not on the pre-approved list, and individuals must be informed of their right to a fair hearing related to a denial by the State of a request and to whether the item is medically necessary under the circumstances. Additionally, states may implement a prior authorization process to review claims for medical equipment, subject to a beneficiary’s appeal rights.

As to dual eligible beneficiaries who receive both Medicare and Medicaid, those beneficiaries would benefit from the regulations, particularly those who are not homebound and would not, therefore, qualify for home health services under Medicare.  If a face-to-face encounter is performed in conjunction with the start of home health services or to support the order for medical equipment under Medicare, and the dual eligible individual subsequently transitions to a Medicaid benefit, the face-to-face encounter does not have to be repeated. However, the physician should review the plan of care for home health services every 60 days. Additionally, if a new face-to-face encounter is required for home health services under Medicaid, the physician must be Medicaid-enrolled.  For dual eligible beneficiaries, the Medicare program will likely reimburse for the face-to-face encounter, whether conducted by a physician or a NPP; therefore, the practitioners would need to adhere to Medicare provider qualifications.

In the event an individual receiving home health services has a change in medical condition that requires additional home health services, the expectation is that the home health agency would communicate that need to the ordering physician, who would then need to revise the plan of care and orders accordingly.  An additional face-to-face encounter would not be required.

To the extent there may be an overlap in coverage with another benefit, states must provide the coverage for the home health supplies, equipment and appliances under the mandatory home health benefit. Additionally, individuals who only require medical equipment and appliances, but no other components of the home health benefit, may receive services directly from DME providers authorized by the state, without the need to establish a relationship with a home health agency.  Supplies incident to another mandatory benefit, such as hospital or nursing facility or clinic benefits categories, may be covered under that benefit category.

CMS acknowledged the concerns expressed by many commenters about the increased costs to state Medicaid programs and a shifting of costs for dual eligible beneficiaries from Medicare to Medicaid for home health services but stated the costs arose from the inherent differences between the Medicare and Medicaid statutes.  CMS estimated the rule would impose an economically significantly financial impact of greater than $100 million.

Providers and suppliers enrolled in Medicaid should be familiar with the face-to-face requirements for home health services under Medicaid and be cognizant of the differences for home health services under Medicare.