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In 1997 Congress specifically recognized that Medicare home care was not a short term, acute care benefit and addressed payment methodologies under Parts A and B to meet the costs of longer-term home care.

The Balanced Budget Act of 1997, signed into law on August 5, 1997, made some major changes to the Medicare Act.One of those changes was to shift costs from Part A to Part B for certain home health costs. The law explicitly recognized that Medicare can cover home care for individuals who do not have a prior hospital or nursing home stay and for people who need longer term home care. In order to reduce costs for the Medicare Part A Trust Fund, however, Congress shifted the payment for this care to Medicare Part B for beneficiaries who have both Parts A and B.

Importantly, by addressing this issue, Congress decided to arrange for longer term Medicare home care (over 100 visits) and care without a prior acute institutional stay. Thus, in 1997 Congress reviewed Medicare home health coverage and chose not to limit it to a short-term, acute care benefit.

  1. BBA ’97 Shifted Payment for Longer Term Home Health Care From Part A To Part B for Individuals Who Are Enrolled In Both Part A and Part B

The 1997 law fashioned a “post institutional home health service” benefit, which provides coverage under Part A for the first 100 visits per “spell of illness” and then shifts all other coverage during the same spell of illness to Part B.

  1. Home Health Benefit Under Medicare Part A

For individuals enrolled in both Parts A and B, Part A became the payment source for post-institutional home care, paying only following a Medicare-covered three day hospital stay or discharge from a skilled nursing facility (SNF), in which the beneficiary received extended care services.In either case, in order to be paid under Part A, the home health services must commence within 14 days of discharge.

Part A home health services also became subject to a “spell of illness” or benefit period requirement.Part A will pay for up to a maximum of 100 home health visits per spell of illness.Since the provision of each type of home health service counts as a visit, patients can receive more than one visit each day, for example, when both a nurse and a home health aide attend to the patient of the same day.A “spell of illness” begins on the first day on which a beneficiary receives a post-institutional home health visit.Thereafter, a new “spell of illness” cannot start (with another 100 covered visits) until the patient has gone 60 consecutive days without receiving inpatient hospital, skilled nursing facility, or home health services.

Home Health Benefits Under Medicare Part B

All Medicare home health services for which a beneficiary qualifies, but which are not covered under Part A due to the imposition of the new post institution “spell of illness” requirement, or the need for care after 100 visits, are covered under Medicare Part B.The monthly Medicare Part B premium was adjusted to account for the costs of shifting these home health services from Part A to Part B.

  1. Home Health Benefits For Beneficiaries Enrolled Only In Part A Or Only In Part B

For individuals who are only enrolled in either Part A or Part B, the law did not apply a prior institutional requirement or 100 visit limitation.This is because the BBA ’97 “post institutional benefit” under Part A was created in order to shift longer term home health payments from the Part A Trust Fund to the Part B payment structure, not to limit Medicare home care coverage to a short term, acute care benefit

  1. CONCLUSION

By taking the action it did in the Balanced Budget Act of 1997, Congress specifically recognized that Medicare home care was not a short term, acute care benefit and addressed payment methodologies under Parts A and B to meet the costs of longer-term home care.

  1. Resources: Medicare Home Health Coverage is Not a Short Term, Acute Care Benefit
  • 42 CFR §409.48(a) and (b) –  (If criteria met, “payment may be … made for an unlimited number of covered home health visits”)
  • Medicare Benefit Policy Manual, Chapter 7, §40.1.1 – (Coverage is available “so long as” skilled care is needed) and §70.1 (Coverage available for” unlimited number of covered home health visits”). See also, §60.1-3 regarding payment responsibilities under Parts A and/or B)
  • Omnibus Reconciliation Act of 1980 (OBRA 1980), P.L. 96-499 – (Repealed the 100 visit annual cap on Medicare home health coverage. See attached article about this Congressional action.)

ATTACHMENT
________________

Medicare Home Health Coverage is Not a Short-Term, Acute Care Benefit ─
Congress Acted in 1980 to Provide for Longer-Term Coverage

Medicare home health coverage is often erroneously described as a short-term, acute care benefit. Though often implemented in this way, this is not true.  Under the law, people who meet the threshold qualifying criteria (legally homebound and needing skilled care), are eligible for Medicare home health coverage so long as they need skilled care. [1] In fact, Congress actually acted affirmatively to authorize long-term Medicare home health coverage in 1980 – removing the annual cap on visits and rescinding the prior hospital stay requirement.

Congressional Action and Legislative History

The Omnibus Reconciliation Act of 1980 (OBRA 1980) [2], expanded the Medicare home health benefit. Prior to this, beneficiaries only enrolled in Part A were eligible for up to 100 home health visits annually, following a three day hospital stay. Coverage was also available under Part B, also limited to 100 visits per calendar year, but this coverage was not dependent on a prior hospitalization. OBRA 1980 eliminated the annual visit cap and the Part A prior hospitalization requirement, thus affirmatively expanding coverage for beneficiaries.

In the OBRA 1980 legislative history, Congress expressed a desire to further liberalize home care coverage, noting there were many “meritorious and deserving alternatives” proposed, and that agreement was reached on these particular improvements. [3] Thus, it is reasonable to infer that these changes – which made it clear that Medicare home care coverage is not short term or linked to acute care – were decisions Congress carefully considered and agreed upon.

Elimination of the Annual Cap on the Number of Covered Home Health Visits

Prior to 1980, coverage was capped under both Medicare Parts A and B at 100 home health visits per year. In the legislative history of OBRA 1980, Congress expressly stated that “unlimited visits would be available” [4] and that the “bill provides Medicare coverage for unlimited home health visits.”[5] The Congressional intent is clear: By removing the annual visit cap, Congress meant to authorize home health coverage for the long term – when appropriate and when other coverage criteria are met.

Elimination of the Three-Day Prior Hospital Stay

Previously, beneficiaries only enrolled in Medicare Part A could not access home health coverage without a prior three-day hospital stay. This requirement did not apply to beneficiaries who also had Part B, as coverage under Part B was not predicated on a prior hospital stay. OBRA 1980 repealed the Part A prior hospital requirement. The Subcommittee on Health of the Committee on Ways and Means stated “Part A was designed to encourage early discharge of hospital and skilled nursing facility (SNF) patients who continue to need skilled care but not at the intensive level provided for in a hospital or SNF. The Part B benefit – no prior hospitalization required – offers those who require skilled care as an alternative to or postponement of hospitalization.”[6] 

Congress eliminated the three day requirement under Part A, aligning it with Part B. (Thus allowing coverage under both Parts A and B “to postpone or avoid hospitalization.”) At the time, more than 1.1 million beneficiaries had Part A only and would benefit from the repeal of the prior hospital requirement.[7] Now, all beneficiaries can qualify for Medicare home health coverage whether they were recently hospitalized or not. Medicare home health coverage is available for homebound beneficiaries who need skilled nursing or therapy, whether they are recovering from an acute illness or injury and are expected to improve, or have a longer-term problem and need home care to maintain or slow decline of their condition. As Congress intended in 1980, Medicare-covered home care can often help beneficiaries forego avoidable hospitalizations.

Conclusion

Medicare can be a source of coverage for long-term home health care for people who qualify.

The relevant legislative history for OBRA 1980 makes it clear that Congress intended to “liberalize” the Medicare home health benefit, and that the changes were seen as “benefit increases” which would be “important to beneficiaries.”[8]

Congress’ 1980 action to reframe and expand Medicare home health coverage appears to be all but forgotten today. Home health care is often mistakenly referred to as a short-term, acute care benefit. This is in conflict with Congressional intent and long-standing Medicare law. The Center for Medicare Advocacy will continue to refute this fiction and advocate for beneficiaries who need and are eligible for long-term Medicare home health coverage and care.


[1] Medicare Benefit Policy Manual, Chapter 7, §§40.1.1; §70.1 (See also, §§60.1-3 regarding payment responsibilities under Part A and/or B)
[2] P.L. 96-499.
[3] Medicare Amendments of 1979, Report of the Committee on Ways and Means – 11/5/1979.
[4] Amendments to the Medicare Program, Subcommittee on Health of the Committee on Ways and Means – 6/15/1979.
[5] Conference Report, House Congressional Record, Pg. 31375 – 12/1/1980.
[6] Amendments to the Medicare Program, Subcommittee on Health of the Committee on Ways and Means – 6/15/1979.
[7] Medicare Amendments of 1980, House Report of the Committee on Interstate and Foreign, Pg. 47.
[8] Conference Report, House Congressional Record, Pg. 24206 – 9/4/1980


May 3, 2018 – J. Stein

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