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ALJ/MAC Decision Database



October 2000

(See )

(NOTE:  This material was written by HCFA.)

On October 1, 2000, a new prospective payment system went into effect for Medicare home health services. We do not anticipate that this change should significantly affect Medicare beneficiaries. Under the new payment system, beneficiaries maintain exactly the same notice and appeal rights as they have had in the past. However, in case beneficiaries do contact you with questions about their rights under the new system, the attached information should assist you in dealing with their concerns. We have taken steps to ensure that all Medicare-certified HHAs are aware that there has been no change in their responsibility to notify beneficiaries when they believe that care ordered by a physician may not be covered by Medicare, and to explain their appeal rights. More information is also available on the internet at


Q. I understand that a new payment system for HHAs will take effect on October 1, 2000. Is this change going to affect my home health services?

A. The new payment system for HHAs does not change in any way the home health services that are covered by Medicare.

Q. My HHA claims that it can no longer provide services because it won't be paid enough under the new payment system. Is this true and what can I do about it?

A. We have carefully designed the new payment system to make sure that HHAs are paid fairly for the services they provide. In some cases they will receive more money than in the past for providing services, in others they may receive less. An HHA has always had the right to decide whether or not to accept any individual patient.

However, an HHA must provide you with an Advance Beneficiary Notice (ABN) if it denies services to you, or reduces or terminates your services, because it believes that Medicare will not cover home health care services that a doctor has ordered for you. The ABN should tell why the HHA expects that Medicare will not cover the services, explain that you may have to pay for the services if Medicare does not cover them, and provide clear directions about how to obtain an official decision from Medicare and appeal that decision if payment is denied.

Q. So, has anything changed with respect to my notice and appeal rights under the new payment system?

A No, the same notice and appeal rules are still in effect. An HHA continues to be required to provide you written notice (the ABN)--including an explanation of how to obtain a Medicare decision and your subsequent appeal rights--before reducing or terminating your care, or refusing to initiate care, when it believes that services ordered by a doctor are not covered by Medicare.


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