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1. CMS Proposes Medicare Home Health Prior Authorization Demonstration

On February 5, 2016, the Centers for Medicare & Medicaid Services (CMS) published a two-page Paperwork Reduction Act notice in the Federal Register announcing their effort to seek approval from the Office of Management and Budget (OMB) to “collect information” relating to a demonstration project.  Pursuant to the project, CMS would identify, investigate and prosecute fraud among Medicare home health agencies by performing prior authorization before processing claims for home health services in several states.[1]  On the same day, CMS published a Supporting Statement on their website, further describing the demonstration.[2]

Targeting “high risk fraud states”, the three year demonstration would occur in two phases: Phase I in Florida, Texas and Illinois and Phase II in Michigan and Massachusetts.  CMS notes that it would establish a prior authorization procedure that is similar to the Prior Authorization of Power Mobility Device (PMD) Demonstration, which was implemented in 2012. The demonstration, according to CMS, would also follow and adopt prior authorization processes that currently exist in other health care programs such as TRICARE, certain state Medicaid programs, and in private insurance.

To initiate the prior approval process in the affected states, CMS explains that the home health agency “or the beneficiary submits a prior authorization request with all relevant documentation based on applicable Medicare rules and policy requirements, to a contractor.” After review, the contractor “will communicate a decision that provisionally affirms or non-affirms the request for prior approval.”  If the documentation is complete “but all relevant Medicare coverage requirements are not met” the contractor will advise that Medicare will not pay for the treatment, and any claim submitted will be denied (subject to appeal).  If a home health agency provides care without prior authorization, and the claim is determined to be payable, the agency will be penalized with a 25% payment reduction.

In an overreaching anti-fraud effort that appears anything but targeted, if implemented, this demonstration would undoubtedly negatively impact access to the home health benefit for many Medicare beneficiaries who live in the affected states.   Requiring prior approval for every prospective home health recipient in a state for the provision of critically important services that help keep people in their homes rather than institutions, often when they are at their most medically vulnerable, will effectively delay and deny home health coverage for countless Medicare beneficiaries. 

The Center intends to submit comments raising serious concerns about this proposal. We encourage those who can, to do the same.  Comments are due April 5, 2016. 

2. Short-Hand Definitions Give Short-Shrift to Home Health Benefit Eligibility Rules

Among a host of Medicare payment and delivery reforms relating to coverage of post-acute care, the Centers for Medicare and Medicaid Services (CMS) is implementing a five-year payment model called the Comprehensive Care for Joint Replacement Model (CJR).  The CJR model will test whether retrospective bundled payments given to acute care hospitals in 67 urban areas for lower joint replacement or reattachment of a lower extremity procedure episodes of care will reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries.[3] 

Among the type of services that can be covered in the CJR model are home health services. While the CJR model does, under certain conditions, allow a beneficiary who does not qualify for Medicare home health services to receive post-discharge visits in his or her home or place of residence, this Alert addresses the treatment of traditional home health services in Medicare.  Our purpose in this Alert is not to analyze the CJR policy, but rather to highlight how CMS publications aimed at provider and contractor education about the policy inadequately represents the definition of “homebound” for purposes of qualifying for Medicare home health services.

Similar to some instances in which CMS implements new policy, CMS has issued a final rule, a Change Request Transmittal updating the Medicare Demonstration Manual, and a Medicare Learning Network “MLN Matters” article intended for physicians, other providers and suppliers to educate them about the CJR model effective April 1, 2016.[4]

Language in both the MLN article and the Change Request incompletely describe the home health benefit, and specifically, the homebound eligibility requirement, as follows:

Post-Discharge Home Visits

In order for Medicare to pay for home health services, a beneficiary must be determined to be "homebound.” A beneficiary is considered to be confined to the home if the beneficiary has a condition, due to an illness or injury, that restricts his or her ability to leave home except with the assistance of another individual or the aid of a supportive device (that is, crutches, a cane, a wheelchair or a walker) or if the beneficiary has a condition such that leaving his or her home is medically contraindicated. Additional information regarding the homebound requirement is available in the “Medicare Benefit Policy Manual;” Chapter 7, Home Health Services, Section 30.1.1, Patient Confined to the Home.

Although reference is made to “additional information” about the home bound requirement, this incomplete definition of home bound demonstrates how CMS-generated materials meant to educate providers, contractors who process claims, and the general public, can be misleading and be misinterpreted concerning the scope of Medicare coverage rules.

The final rule implementing the CJR model adds additional, critical explanatory language: “While a beneficiary does not have to be bedridden to be considered confined to the home, the condition of the beneficiary must be such that there exists a normal inability to leave home and leaving home requires a considerable and taxing effort by the beneficiary.”[5]

Language in the Medicare statute itself demonstrates that in addition to the ability to leave home (albeit with difficulty), certain absences from the home shall not disqualify someone from home health coverage:

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 the 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 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.[6]

It is clear that the intent of the Medicare statute is to provide home health care to beneficiaries whose health conditions render it difficult to leave home, even though they may sometimes leave the home.  In our experience, though, permissible reasons to leave home are often misunderstood or not recognized by providers and contractors who process claims.


Our concern is that CMS’ abbreviated version of coverage rules in MLN Matters articles and Transmittals perpetuates misunderstanding of such rules – particularly when providers, contractors and the general public are far more likely to rely on these documents than the actual language of the statue and regulations.

History has shown that when descriptions of coverage rules in the statute, regulations and sub-regulatory guidance become more narrowly interpreted over time, misunderstandings and misinterpretation flourish, usually to the detriment of Medicare beneficiaries.  Short-cuts are taken and rules of thumb are established until the more restrictive criteria become the new, de facto, criteria in making coverage decisions.  It is just such a process that led to the widespread institutionalization of the “Improvement Standard” myth among Medicare providers and contractors.[7]  As also noted in today’s Alert, despite the settlement in the Jimmo v. Sebelius case, the Center and Vermont Legal Aid are taking the case back to court because providers and contractors continue to illegally deny Medicare coverage and care based on an “Improvement Standard,” resulting in beneficiaries nationwide failing to obtain needed skilled nursing and therapy coverage.

Once a constriction of actual coverage rules is accepted as true, it is very difficult to rectify. The Center urges CMS, providers, contractors and the general public to abide by the complete legal definition of “homebound” and to allow individuals who appropriately qualify for Medicare home care benefits to receive their needed care.

March 2, 2016 – D. Lipschutz

[1] 81 Fed Reg 6275 (February 5, 2016).
[2] “Supporting Statement Part A – Medicare Prior Authorization of Home Health Services Demonstration” CMS-10599 (February 5, 2016):
[3] See, generally, final rule implementing CJR at 80 Federal Register 73273 (November 24, 2015), available at:  Also see the Center’s Comments on Comprehensive Care for Joint Replacement Payment Model (September 8, 2015):  
[4]Final rule implementing CJR at 80 Federal Register 73273 (November 24, 2015), available at:; Change Request (CR 9533) to CMS Demonstration Manual (February 19, 2016):  (note: the Demonstration Manual, CMS Pub. 100-19, houses demonstrations that are not required to be “manualized:; MLN Matters article “Comprehensive Care for Joint Replacement Model (CJR) Provider Education” (MM9533) (February 19, 2016) available at:
[5] 80 Fed Reg 73440.
[6]42 U.S.C. §1395n(a)(2)(F).  Also see Medicare Benefit Policy Manual (CMS Pub. 100-02), Ch. 7, §30.1, available at:; also see Center for Medicare Advocacy’s website at:   
[7] See, generally, the Center’s website for information about the “improvement standard myth” and the Jimmo v. Sebelius settlement at:




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