Texas Health and Human Services Commission v. Linda Puglisi

ACCEPTED

03-15-00226-CV

6505541

THIRD COURT OF APPEALS

AUSTIN, TEXAS

8/14/2015 2:26:54 PM

JEFFREY D. KYLE

CLERK

CASE NO. 03-15-00226-CV

IN THE COURT OF APPEALS FILED IN

3rd COURT OF APPEALS

FOR THE THIRD JUDICIAL DISTRICT AUSTIN, TEXAS

AT AUSTIN, TEXAS 8/14/2015 2:26:54 PM

JEFFREY D. KYLE

Texas Health & Human Services Commission, Clerk

Appellant,

v.

Linda Puglisi,

Appellee.

On Appeal from Cause No. D-1-GN-14-000381

53rd Judicial District Court of Travis County, Texas

Honorable Judge Gisela D. Triana Presiding.

APPELLANT’S REPLY BRIEF

KEN PAXTON EUGENE A. CLAYBORN

Attorney General of Texas State Bar No.: 00785767

Assistant Attorney General

CHARLES E. ROY Deputy Chief, Administrative Law Division

First Assistant Attorney General OFFICE OF THE ATTORNEY GENERAL OF TEXAS

P.O. Box 12548, Capitol Station

JAMES E. DAVIS Austin, Texas 78711-2548

Deputy Attorney General for Telephone: (512) 475-3204

Civil Litigation Facsimile: (512) 320-0167

eugene.clayborn@texasattorneygeneral.gov

DAV ID A. TALBOT, JR.

Chief, Administrative Law Attorneys for Texas Health and

Division Human Services Commission

ORAL ARGUMENT REQUESTED August 14, 2015

Table of Contents

Table of Contents ...................................................................................................... ii

Table of Authorities ................................................................................................. iii

I. ARGUMENT AND AUTHORITIES ................................................................1

A. Puglisi’s definition for covered DME is misleading. .............................1

B. Puglisi requires maximum assistance from her caregivers for all

activities of daily living. .........................................................................3

C. Compliance with Tex. Hum. Res. Code §§ 32.04242, 32.050(b) ...........4

D. Puglisi subverts the substantial evidence review standard. ....................6

E. Detgen is controlling authority regarding HHSC’s categorical

exclusion of mobile standers based on the availability of a cost-

effective alternative. ...............................................................................7

F. Puglisi received adequate due process. ................................................11

II. CONCLUSION ................................................................................................11

PRAYER ..................................................................................................................12

CERTIFICATE OF COMPLIANCE .......................................................................13

CERTIFICATE OF SERVICE ..........................................................................14

APPENDICES .........................................................................................................15

ii

Table of Authorities

Cases

City of El Paso v. Pub. Util. Comm’n,

883 S.W.2d 179 (Tex. 1994) ..................................................................................6

DeSario v. Thomas,

139 F.3d 80 (2nd Cir. 1998) ...............................................................................3, 5

Detgen ex. rel. Detgen v. Janek,

752 F.3d 627 (5th Cir. 2014) ....................................................................... 8, 9, 10

Lavine v. Milne,

424 U.S. (1976) ......................................................................................................6

Slekis v. Thomas,

525 U.S. 1098 S.Ct. 864 L.Ed.2d 767 (1998) ........................................................6

Tex. Health Facilities Comm’n v. Charter Med.-Dall.,

665 S.W.2d 446 (Tex. 1984) ..................................................................................6

Tex. Rivers Prot. Ass’n v. Tex. Natural Res. Conservation Comm’n,

910 S.W.2d 147 (Tex. App.—Austin 1995, writ denied) ......................................6

Univ. of Tex. Med. Sch. at Houston v. Than,

901 S.W.2d 926 (Tex. 1995) ................................................................................11

Statutes

Texas Government Code

§ 2001.175 ............................................................................................................12

Rules

1 Tex. Admin. Code

§ 354.1039(a)(4)(D) ...............................................................................................8

§ 354.1041 ..................................................................................................... 4, 5, 6

iii

Tex. Hum. Res. Code

§§ 32.04242, .050(b) ..................................................................................... 4, 5, 6

Other Authorities

42 C.F.R.

Part 431 Subpart E ..................................................................................................9

TMPPM

§ 2.2.14.22 ..............................................................................................................8

§ 2.2.14.26 ..........................................................................................................8, 9

§ 2.3.1.2 ..................................................................................................................5

§ 2.3.1.3 ..................................................................................................................5

Fed. Reg.

Vol. 76, No. 133, Tuesday, July 12, 2011, Page 41032 .........................................3

iv

CASE NO. 03-15-00226-CV

IN THE COURT OF APPEALS

FOR THE THIRD JUDICIAL DISTRICT

AT AUSTIN, TEXAS

Texas Health & Human Services Commission,

Appellant,

v.

Linda Puglisi,

Appellee.

On Appeal from Cause No. D-1-GN-14-000381

53rd Judicial District Court of Travis County, Texas,

Honorable Judge Gisela D. Triana Presiding.

APPELLANT’S REPLY BRIEF

TO THE HONORABLE JUDGE OF THIS COURT:

COMES NOW the Texas Health and Human Services Commission (HHSC)

and submits Appellant’s Reply Brief.

I. ARGUMENT AND AUTHORITIES

A. Puglisi’s definition for covered DME is misleading.

Puglisi erroneously alleges that “[a]n item of medical equipment is covered if

it meet HHSC’s definition of DME.” Br. of Appellee, p. 3. Puglisi’s definition of

covered DME, however, is derived from her fundamental misreading of the May 21,

2013 CMS letter. Br. of Appellee; App. 1. The May 21, 2013 CMS letter states

that “[a]s such, items of DME meeting the state’s definition of such coverage is to

1

be provided to individuals (of any age) meeting the State’s medical necessity

criteria.” (emphasis added). Br. of Appellee; App. p. 1. This statement shows that

an item defined as DME may or may not meet the State’s definition of covered DME.

In fact, there is no dispute about whether any of Puglisi’s requested items are

defined as DME. The facts are that the power wheel chair, the integrated standing

feature, and the power seat system are all defined as DME. Similarly, there is no

dispute about which of Puglisi’ requested items are covered. The facts are that the

power wheelchair and the power seat system are covered DME. However, the

integrated standing feature is not covered. However, the parties dispute whether

the requested items are medically necessary since the items do not facilitate any

additional MRADLs activities.

Despite these immutable facts, Puglisi asserts that the integrated standing feature

should be covered DME solely because it satisfies the definition of DME. But the

definition of covered DME is determined by the process and procedures prescribed

in applicable statutes, rules, and policies. Appellant’s Br. App. 4, 5. In essence,

Puglisi’s improperly conflates the definition of DME and the definition of covered

DME in order to reach an erroneous conclusion. As a result, Puglisi cannot rely

solely on the definition of DME to determine whether certain DME is covered DME

or not. “There is no requirement that a state fund every medically necessary

procedure or item falling within a service it covers under its plan. To begin with,

2

medical necessity and coverage are distinct concepts; a patient’s medical necessity

does not determine whether a particular item or service is covered.” DeSario v.

Thomas, 139 F.3d 80 (2nd Cir. 1998).

In addition, the May 21, 2013 CMS letter also states that its “Notice of

Proposed Rulemaking issued July 12, 2011” include proposals that define “a medical

supply, equipment, and appliance” and also provide “that any item meeting any of

those definitions must be covered under the state plan.…”. Br. of Appellee;

App. 1. It is true that CMS published proposed policy changes and clarifications to

certain Home Health Services, however, CMS’s proposals have not been formally

adopted. Fed. Reg. Vol. 76, No. 133, Tuesday, July 12, 2011, Page 41032;

Appellant’s Reply Br.; App. p. 13. Regardless, nothing in the proposed changes

appears to restrict the HHSC’s authority to define the scope of coverage for Medicaid

DME.

B. Puglisi requires maximum assistance from her caregivers for all activities

of daily living.

Puglisi states that “[s]he requires a custom power wheelchair for all mobility.”

Br. of Appellee, p. 5. Based on statements of Molina Healthcare’s Rehab Review,

Nurse Review, and Medical Doctor Review, however, the Hearing Officer

determined the following:

3

On or about June 4, 2013, Molina Healthcare forwarded the DME

request to Rehab Review for a third party review for medical necessity

of the DME requested. Rehab Review is a Rehabilitation Engineering

and Assistive Technology Society (RESNA) certified entity contracted

to conduct independent reviews for medical necessity of DME.

....

Appellant requires maximum assistance with all activities of daily

living including transfers. Appellant requires caregiver assistance to

transfer in and out of her bed and wheelchair.

Molina healthcare recommended approval of a group 3 power

wheelchair with a stand-alone dynamic stander to meet the Appellant’s

needs; however Appellant is unable to transfer independently and

would require assistance from one or two caregivers to transfer to the

dynamic stander.

A.R. at 334. In short, Puglisi needs maximum assistance from her caregivers for all

MRADLs with or without a power wheelchair, integrated standing feature, or power

seat elevation system. Therefore, a group 4 custom power wheelchair with an

integrated mobile stander is not medically necessary to correct or ameliorate

Puglisi’s disability, condition, or illness, given that her caregivers must assist her

with transfers, feeding, and dressing.

C. Compliance with Tex. Hum. Res. Code §§ 32.04242, 32.050(b) and Tex.

Admin. Code § 354.1041 is important.

Puglisi states that “[i]t does not matter that ‘Texas law requires HHSC to

analyze claims submitted first under Medicare the extent allowed by law.’” Br. of

Appellee p. 12. Also, Puglisi states that this case is not about the payment of

claims.” Br. of Appellee, p. 12. Further, Puglisi states that “Medicare’s primary

4

payor status does not dictate any particular order for securing prior authorization of

the recommended wheelchair.” Br. of Appellee, p. 12. However, compliance with

Tex. Hum. Res. Code §§ 32.04242, .050(b) and 1 Tex. Admin. Code § 354.1041 is

important. To a state agency, compliance with the law cannot be so easily

disregarded.

On the one hand, absent a clear delegation of authority, it is nonsensical to

expect a state Medicaid program to provide prior authorizations of DME for a

Federal Medicare program and vice versa. On the other hand, TMPPM § 2.3.1.2

(Benefits for Medicare/Medicaid Clients) provides that “[f]or eligible

Medicare/Medicaid clients, Medicare is the primary coinsurance and providers must

contact Medicare first for prior authorization and reimbursement.” (emphasis

added). Appendix 14. Further, TMPPM § 2.3.1.3 (Medicare and Medicaid Prior

Authorization) provides that “[f]or MQMB clients, do not submit prior

authorization requests to TMHP if the Medicare denial reason states ‘not medically

necessary.’ Medicaid only will consider prior authorization requests if the

Medicare denial states ‘not a benefit of Medicare.’” Appellant’s Reply Br.;

Appendix 14. Hence, Puglisi’s MQMB status is a significant intervening event that

renders the underlying issues of this suit unfit for judicial review because applicable

law and policy requires her to present her prior authorization to Medicare before

presenting her request to HHSC. See DeSario v. Thomas, 139 F.3d 80, 96 (2nd Cir.

5

1998), cert. granted, judgment vacated, Slekis v. Thomas, 525 U.S. 1098, 119 S.Ct.

864, 142 L.Ed.2d 767 (1998) (“In general, the ‘normal assumption [is] that an

applicant is not entitled to benefits unless and until he proves his eligibility.’”

(Quoting Lavine v. Milne, 424 U.S. (1976)). Therefore, compliance with Tex.

Hum. Res. Code §§ 32.04242, .050(b) and 1 Tex. Admin. Code § 354.1041 is an

essential prerequisite to seeking prior authorization or reimbursement from

Medicaid.

D. Puglisi subverts the substantial evidence review standard.

The trial court erred by ignoring the substantial evidence review standard and

the proper burden of proof. In this suit for judicial review, Puglisi has the burden

of proof. “[F]indings, inferences, conclusions, and decisions of an administrative

agency are presumed to be supported by substantial evidence, and the burden is on

the contestant to prove otherwise.” City of El Paso v. Pub. Util. Comm’n, 883

S.W.2d 179, 185 (Tex. 1994) (citing Tex. Health Facilities Comm’n v. Charter

Med.-Dall., 665 S.W.2d 446, 452–53 (Tex. 1984)). As long as a properly supported

finding given in the order supports an agency’s action, the court will uphold the

action despite the existence of other findings that are irrelevant or unsupported by

the record. Tex. Rivers Prot. Ass’n v. Tex. Natural Res. Conservation Comm’n, 910

S.W.2d 147, 155 (Tex. App.—Austin 1995, writ denied).

6

Puglisi makes several statements throughout her brief that demonstrate her

failure to meet the burden of proof under the substantial evidence test. Br. of

Appellee, p. 24-34. In one example, Puglisi states that “[t]he bottom line is that the

administrative record contains no credible evidence refuting the professional

opinions of Linda’s medical providers.” Br. of Appellee, p. 31. This statement,

however, follows several pages of argument dedicated to discounting the evidence

in the record that supports the findings and conclusions contained in the orders

upholding Molina’s decision. The bottom line is that there is more than a mere

scintilla of evidence in the record to support the Hearing Officer’s and the Reviewing

Attorney’s findings and conclusions. Appellant’s Br. p. 16-44.

E. Detgen is controlling authority regarding HHSC’s categorical exclusion

of mobile standers based on the availability of a cost-effective alternative.

Puglisi asserts that “TMHP’s policy excluding wheelchair standing features

from Medicaid coverage …, is an invalid basis for HHSC’s decision” and that

“TMHP’s exclusion of wheelchair standing features meets all of the criteria of a

‘rule’ identified in the Texas Administrative Procedures Act (APA), but was not

promulgated in compliance with the Act.” Br. of Appellee, p. 40-41. These

assertions fail because HHSC is not prohibited from categorically excluding certain

types of DME and Puglisi cannot claim a private right to DME that has been

categorically excluded from Medicaid coverage.

7

In fact, Puglisi fails to assert a private right to a mobile stander in her legal

analysis alleging how TMPPM § 2.2.14.26 is a rule. The most that Puglisi could

possibly claim is a right to exceptional circumstances review because mobile

standers are categorically excluded from Medicaid coverage. Exceptional

circumstances review applies to unlisted DME. See 1 TAC § 354.1039(a)(4)(D).

However, Puglisi never requested exceptional circumstances review.

In this case, TMPPM § 2.2.14.22 provides a less costly, yet equally effective

alternative to the categorically excluded mobile power stander. Appellant’s Br.

App. 5, DM-78. As to the reasonableness of HHSC’s categorical exclusion of

certain DME (i.e. ceiling lifts), the Fifth Circuit recently stated the following:

It is hardly unreasonable for a state to exclude—even categorically—

any medical device whose purpose can be served by a more cost-

effective method. Not only has Texas not violated the plain language

of the statute, but also the reasonableness standard in the text likely

supports its imposition of reasonable categorical exclusions. The

plaintiffs’ notion that it would be unreasonable for a state not to provide

particular equipment within its definition of DME sounds plausible,

except that the state can choose by definition to exclude ceiling lifts.

FN6. Moreover, a categorical exclusion based on the availability of

cost-effective alternatives cannot mean that the state has denied a

medically necessary device, even if the statute did impose such a

standard.

Detgen ex. rel. Detgen v. Janek, 752 F.3d 627, 632 (5th Cir. 2014) (Medicaid

recipient brought suit against HHSC challenging the denial of their request for the

installation of ceiling lifts to transfer the recipient to and from bed, bath, etc.).

Appellant’s Br. App. 8.

8

Nevertheless, Puglisi asserts that Detgen is “wrong.” Br. of App. p. 36.

TMPPM § 2.2.14.26, however, does not violate federal and state Medicaid

requirements because “[a] State may develop a list of pre-approved items of ME

[Medical Equipment] as an administrative convenience because such a list

eliminates the need to administer an extensive application process for each ME

request submitted.” (emphasis added). CMS letter dated September 4, 1998;

Appellant’s Brief; Appendix 6. Moreover, CMS guidance provides that:

. . . [A] State will be in compliance with federal Medicaid requirements

only if, with respect to an individual applicant’s request for an item of

ME, the following conditions are met:

• The process is timely and employs reasonable and specific

criteria by which an individual item of ME will be judged for coverage

under the State’s home health services benefit. These criteria must be

sufficiently specific to permit a determination of whether an item of

ME that does not appear on a State’s pre-approved list has been

arbitrarily excluded from coverage based solely on a diagnosis, type of

illness, or condition.

• The State’s process and criteria, as well as the State’s pre-

approved list of items, are made available to beneficiaries and the

public.

• Beneficiaries are informed of their right under 42 C.F.R. Part 431

Subpart E, to a fair hearing to determine whether an adverse decision is

contrary to the law cited above.

CMS letter dated September 4, 1998; Appellant’s Br. App. 6. In addition to the

federal guidance described in the DeSario Letter, Detgen v. Janek provides that:

“[t]he rule the court employs is this: where a State has explicit guidance from CMS

9

that FFP will not be available for an item of DME, that State acts reasonably when

it categorically excludes such an item from coverage in its Medicaid policies.”

Detgen ex. rel. Detgen v. Janek, 945 F.Supp.2d 746, 759 (N. D. Tex. 2013) (“The

court finds that Texas Medicaid’s policy categorically excluding ceiling lifts from

coverage does not conflict with the Medicaid Act’s ‘reasonable standards’

requirement, the ‘amount, duration, and scope’ regulation, or the DeSario letter’s

guidance.”). Appellant’s Br. App. p. 12. Furthermore, recent CMS guidance

provides that “items of DME meeting the state’s definition of coverage is to be

provided to individuals (of any age) meeting the State’s medical necessity criteria.”

CMS letter dated May 21, 2013 (“This means that medically necessary ceiling lifts

will be reimbursed by CMS as part of the Texas home health benefit if these lifts

meet the state’s definition of DME [coverage].” (emphasis added). A.R. at 303.

Furthermore, Detgen states that”

It would be perfectly consistent with federal law and this letter to adopt

a list of pre-approved devices for convenience and a list of categorical

exclusions if based on reasonable grounds, such as the availability of

more cost-effective alternatives, and to permit a beneficiary to

demonstrate need for an item on neither list. In short nothing in the

DeSario letter prohibits categorical exclusions, which might even be

eminently reasonable and thus consistent with the statutory language.

Detgen ex. rel. Detgen v. Janek, 752 F.3d 627, 633 (5th Cir. 2014); Appellant’s Br.

App. p. 8. HHSC’s categorical exclusion of mobile standers, therefore, is consistent

with state and federal statutes, rules, and guidance.

10

F. Puglisi received adequate due process.

After Puglisi requested the DME, Molina reviewed, analyzed, and denied the

request. HHSC reviewed and affirmed Molina’s decision. The trial court

judicially reviewed HHSC’s decision. Now this Court is judicially reviewing the

trial court’s decision. Nevertheless, Puglisi is alleging a denial of due process even

though she has participated in hearings at multiple levels of administrative and

judicial review. Her experiences before the administrative and judicial tribunals

define adequate due process. If this Court concludes that Puglisi is entitled to more

due process, the clear solution is to remand this case back to Molina and begin due

process anew. See Univ. of Tex. Med. Sch. at Houston v. Than, 901 S.W.2d 926

(Tex. 1995) (“In general, the remedy for a denial of due process is due process.”).

II. CONCLUSION

This case should have been dismissed for lack of subject matter jurisdiction

or remanded to the agency to take and adjudicate additional evidence regarding

Puglisi’s dual eligibility status. Regardless, substantial evidence supports the

Hearing Officer and Reviewing Attorney findings and conclusions. Moreover,

Molina, the Hearing Officer, and the Reviewing Attorney properly interpreted and

applied agency rules, policies, and procedures. In the final analysis, Puglisi has

received all the process that she was due.

11

PRAYER

WHEREFORE, PREMISES CONSIDERED, Appellant respectfully asks that

this Court: a) reverse the trial court and dismiss this suit for lack of subject matter

jurisdiction; b) reverse the trial court and render judgment in favor of HHSC because

Molina Healthcare’s and HHSC’s decisions are supported by substantial evidence;

or c) reverse the trial court and remand the case to Molina Healthcare and HHSC to

take additional evidence pursuant to Texas Government Code § 2001.175, to allow

Puglisi the opportunity to seek prior authorization from Medicare, and to allow

Puglisi the opportunity to request exceptional circumstances review.

Respectfully Submitted,

KEN PAXTON

Attorney General of Texas

CHARLES E. ROY

First Assistant Attorney General

JAMES E. DAVIS

Deputy Attorney General for Litigation

DAV ID A. TALBOT, JR.

Chief, Administrative Law Division

12

/s/ Eugene A. Clayborn

EUGENE A. CLAYBORN

State Bar No.: 00785767

Assistant Attorney General

Deputy Chief, Administrative Law Division

O FFICE OF THE A TTORNEY G ENERAL OF T EXAS

P.O. Box 12548, Capitol Station

Austin, Texas 78711-2548

Telephone: (512) 475-3204

Facsimile: (512) 320-0167

eugene.clayborn@ texasattorneygeneral.gov

Attorneys for Texas Health & Human Services

Commission

CERTIFICATE OF COMPLIANCE

I certify that the reply brief submitted complies with Texas Rule of Appellate

Procedure 9 and the word count of this document is 2,621. The word processing

software used to prepare this filing and calculate the word count of the document

was Microsoft Word 97-2003.

Dated: August 14, 2015

/s/ Eugene A. Clayborn

EUGENE A. CLAYBORN

Assistant Attorney General

13

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing document has

been served on this the 14th day of August, 2015 on the following:

Maureen O’Connell Via: Electronic Service

State Bar No.: 00795949

S OUTHERN D ISABILITY L AW C ENTER

1307 Payne Avenue

Austin, Texas 78757

moconnell458@gmail.com

Attorneys for Appellee

/s/ Eugene A. Clayborn

EUGENE A. CLAYBORN

Assistant Attorney General

14

CASE NO. 03-15-00226-CV

___________________________________________________________

IN THE COURT OF APPEALS

FOR THE THIRD JUDICIAL DISTRICT

AT AUSTIN, TEXAS

____________________________________________________________

Texas Health & Human Services Commission,

Appellant,

v.

Linda Puglisi,

Appellee.

____________________________________________________________

On Appeal from Cause No. D-1-GN-14-000381

53rd Judicial District Court of Travis County, Texas

Honorable Judge Gisela D. Triana Presiding.

____________________________________________________________

APPELLANT’S REPLY BRIEF

_________________________________________________________________

APPENDICES

No. 13. Fed. Reg. Proposed Rules

No. 14. TMPPM 2.3

15

DEPARTMENT OF ÉIEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

7500 Security Boulevard, Mail Stop S2-26-12

Baltimore, MD 21244-1850 øAñfverÊaMDg|ø

Center for Medicaid, CHIP, and Survey & Certification

CMCS Informational Bulletin

DATE: July 13, 2011

FROM: Cindy Mann, Director

Center for Medicaid, CHIP and Survey and & Certification (CMCS)

SUBJECT: Updates on Medicaid/CHIP

This Informational Bulletin covers several important topics of interest to States:

o New Initiative for Medicare-Medicaid Enrollees;

o Proposed Regulations Regarding Affordable Insurance Exchanges

o Home Health Services NPRM;

o PRA Package for Medicaid and CHIP State Plan, Waiver, and Program Submissions;

o CMS Second National Background Check Program Conference;

o Inclusion of Training Costs in Rate Development:

o Pharmacy Pricing Survey

New Initiative for Medicare-Medicaid Enrollees

CMCS and the Office of Medicare-Medicaid Coordination is pleased to announce the release of

a State Medicaid Director's letter providing guidance on opportunities to test new financial

models designed to help States improve quality and share in the lower costs that result from

better coordinatingcare for individuals enrolled in both Medicare and Medicaid (Medicare-

Medicaid enrollees). A longstanding barrier to coordinating care for Medicare-Medicaid

enrollees has been the financial misalignment between Medicare and Medicaid. To address this,

and in response to State requests CMS is eager to collaborate with States to test two models to

better align the financing of these two programs and integrate primary, acute, behavioral health

and long term services and supports for their Medicare-Medicaid enrollees. We will be setting

up calls with States to review these opportunities.

For more information, please visit:

f

Proposed Regulations Regard in g Affo rdable Insurance Exchan ges

On July ll,20Il, CMS issued the a proposed rule setting forth a framework to assist States in

building Affordabte Insurance Exchanges, state-based competitive marketplaces where

individuals and small businesses will be able to purchase affordable private health insurance.

Starting in2014, Exchanges will make it easy for individuals and small businesses to compare

health plans, get answers to questions, find out if they are eligible for tax credits for private

Appendix - 13

2lPage- Inforrnational Bulletin

insurance or health programs like Medicaid and the Children's Health fnsurance Program

(CHIP), and enroll in a health plan that meets their needs.

The proposed rules offer States guidance and options on how to structure their Exchanges in two

key areas:

. Setting standards for establishing Exchanges, setting up a Small Business Health

Optioñs Program (SHOP), performing the basic functions of an Exchange, and certiffing

health plans for participation in the Exchange, and;

. Ensuring premium stability for plans and enrollees in the Exchange, especially in the

early yeàri as new people come in to Exchanges to shop for health insurance.

These proposed rules set minimum standards for Exchanges, give States the flexibility they need

to desiþ Èxchanges that best fit their unique insurance markets, and are consistent with steps

States ñave already taken to move forward with Exchanges. The proposed rules build on over a

year,s worth of wórk with States, small businesses, consumers and health insurance plans and

ãffer Søtes substantial flexibility. For example, it allows States to decide whether their

Exchanges should be local, regional, or operated by a non-profit organization, how to select

phns tJparticipate, and whethã to partner with the Department of Health and Human Services

GIIIS) to split up the work.

To reduce duplication of effort and the administrative burden on the states, HHS also announced

that the federãl government will partner with States to make Exchange development and

operations morJeflicient. States can choose to develop an Exchange in partnership with the

féderal government or develop these systems themselves. This provides States more flexibility to

focus their resources on designing the right Exchanges for their local insurance markets.

To review the proposed rule yisi¡; http://www.ofr.gov/OFRUoload/OFRData/2011-1761O-Pl.pdf .

The comment period closes on September 28,2011. HHS will also convene a series of regional

listening sessións and meetings tofacilitate pubic comments. Additional guidance-including

propo."ã rules related to eligibility and enrollment procedures for Exchanges and Medicaid-

will be issued in the future.

For more information on Exchanges, includingfact sheets, visit

http ://www.healthcare. gov/exchanges'

Home Health Services; Policy Changes and Clarifications Related to Home Health

On Tuesday, July 5, 2011, CMS released a Notice of Proposed Rule Making (NPRM)

providing

additional guidance to States on the implementation of section 6407 of the Affordable Care Act

which adds a requirement that in the course of authorizing home health services, physicians must

document the exlstence of a face-to-face encounter (including through the use of telehealth) with

the Medicaid eligible individual within specified timeframes. This proposed rule aligns Medicaid

implementation õf face-to-face encounteis with Medicare's regulatory guidance. This will

improve facilitation of services for individuals dually eligible for both programs, and make it

for providers participating in both programs to understand the rules. This provision was

"*i..

effective ón January 1,2010, but this is a proposed rule and comments are welcome.

Appendix - 13

3lPage- lnforrxational Bulletin

ln addition, this proposed rule clarifies that home health services, including medical supplies,

equipment and appliances may not be restricted to the home, and if medically necessary, should

be provided in any non-institutional setting in which normal life activities take place. It includes

in regulation the definition of medical supplies, equipment and appliances.

For more information and instructions on how to submit comments on this rule, please visit:

http://www.gpo.gov/fdsys/pkg/FR-201l-07-12/pdf/201l-16937.pdf. All comments are due by

September 12,2011.

PRA Package for Medicaid and CHIP State Plan, Waiver, and Program Submissions

On Friday, July 1, 2011, CMS published a generic Paperwork Reduction Act (PRA) package in

the Federal Register that includes forms necessary for CMCS to conduct ongoing business with

our State partners to continue the implementation of the Affordable Carc Act provisions related

to Medicaid and the CHIP. These forms include State plan amendments, waiver, demonstration

and reporting templates that will be developed over the 3-year approval period.

This PRA package provides support to both States and CMS by:

o Developing streamlined submissions for States to implement health reform initiatives in

Medicaid and CHIP;

o Enhancing collaboration and partnerships by documenting CMS policy for States to use

as they are developing program changes; and

o Improving the efficiency of administration by creating a common and user friendly

understanding of the information needed by CMS to process requests for State plan

amendments, waiver, demonstrations and reporting.

For more information and instructions on how to submit comments on this rule, please visit:

http://www.qÞo.sov/fdsys/pke/FR-201 1-07-01/pdf/201 I -16600.pdf. Comments and

recommendations must be submitted by August 30,2011.

Encouraging States to Attend the CMS Second National Bacþround Check Program

Conference

We are pleased to announce that the second CMS National Background Check Program (NBCP)

Conference is scheduled for2.5 days, September 13-15,2011attheCrownePlazaHotel, St.

Louis-Downtown located at200 N. Fourth Street, St. Louis, Missouri. This conference will

provide education to NBCP gtantee States as well as non-grantee States interested in establishing

or improving their background check programs for long term care providers and facilities.

Although grantee States are required to use grant funds to send at least three attendees to each of

the NBCP conferences, we also hope States who have not yet received a grantwill attend.

The NBCP conference is part of the technical assistance efforts CMS is providing to States in

support of section 6201 of the Affordable Care Act of 20l},which directs the Secretary ofthe

Department of Health and Huma¡r Services to establish a nationwide program to identiff efficient

Appendix - 13

4lPage- Inforlnational Bulletin

eflective, and economical procedures for long term care facilities and providers to conduct

background checks on a statewide basis on all prospective direct patient access employees. The

NBCP will enhance the safety of residents and clients of long term care providers by

disqualiffing certain offenders from positions that would bring them into contact with vulnerable

populations served in long term care settings.

Non-grantee States interested in attending the second CMS NBCP Conference at their own

expense, should contact Lisa Byrd, CMS Training Coordinator, via email at

lisa.byrd@cms.hhs.gov by Monday, August l,20ll for registration assistance. If you are a

non-grantee State with travel funding issues that may prohibit attendance at this conference,

please contact the Background Check Team at Background_Checks@cms.hhs.gov to discuss the

potential for CMS assistance. For all other questions related to conference registration, please

contact lisa.byrd@cms.hhs. gov.

Inclusion of Training Costs in Rate Development

In light of questions we have received, CMCS is providing this information regarding the

mechanism by whioh provider-related training costs may be considered in the development of

the rate of payment for medical services. Questions have come up particularly in the area of

home health services.

Medicaid statute and regulations (sectio n 1902 of the Social Security Act and 42 Code of Federal

Regulations 430 and 447) allow reimbursement for covered services delivered by a qualified

p.ovider to an eligible beneficiary. Costs associated with requirements that are prerequisite to

being a qualified Medicaid provider are not reimbursable by Medicaid. However, costs

associated with maintaining status as a qualified provider may be included in determining the

rate for services. Specifically, if as part of its provider qualification requirements, a State

requires a provider to acquire a certain minimum number of hours of specified types of

continuing education (CE) each period (annually or quarterly, for example), the State may

recognize such CE expenses as a cost to the provider of doing business and may consider such

costJ in developing the rate paid for the service. The cost of CE may only be included as part of

the rate paid for the service and may not be claimed separately by the Medicaid agency as an

administrative expense.

For example, a State's provider qualification standards could require the direct service provider

to: 1) have a high school diploma (or its equivalent) and be at least 18 years of age, and2)

complete a certain number of specified CE hours or credits during the calendar or fiscal year (or

quarter¡ in order to maintain eligible provider status. The State could not pay, or include in its

rates, costs for individuals to obtain a high school diploma or its equivalent. However, the State

may include the estimated costs of meeting ongoing CE requirements in determining the rate

paid for the service. If the provider fails to acquire the minimum required number of CE hours

òr credits, the provider would no longer be qualified, and no Medicaid payment could be made

either for services or for the CE that would be needed as a prerequisite to regaining status as a

qualified provider.

Appendix - 13

5lPage- lnf<lrrnational Bul letin

Similarly, should a State wish to promote advanced provider skills training to increase the

availability of providers qualifred to serve beneficiaries with more compliiated or difhcult

medical needs, costs associated with that advanced training could also be inqluded in the

development of rates paid for services requiring more complex levels of care. The State could

set provider qualification requirements at a separate and distinct level for those advanced level

providers, and pay rates commensurate with their higher skill levels. The qualifications and

rates could be higher than those for services furnished by less skilled individuals such as family

members.

please contact Dianne Heffron, Director, Tinancial

If you have additional questions,

Management Group, who may be reached at (410) 786-3247.

Pharmacy Pricing Survey

CMS is pleased to announce that Myers and Stauffer, LC has been awarded a contract to conduct

a Survey of Pharmacy Retail Prices. The survey, which was initially requested by States and

which Secretary Sebelius committed to in her February 3,201'l letter to GovernQrs, is part of

CMS' commitment to working with States to ensure that they have accurate information about

drug costs in order to make prudent purchasing decisions.

The contractor will develop a monthly survey of retail community pharmacy prescription drug

prices and generate of publicly available pricing files tq help States. We anticipate that these

files will afford State Medicaid agencies with a valid array of covered outpatient drug

information, regarding retail prices for the ingredient costs of prescription drugs and consumer

purchase prices for such drugs. We expect that St¿te Medicaid agencies will be able to use this

information to compare their own pricing methodologies and payments to those derived from

this survey.

Additionally, on an annual basis, CMS will obtain from State Medicaid agencies information on

their prescription drug payment and utilization rates and prepare a comparative report regarding

the performance of the States' reimbursement prices and the national retail price data collected in

the survey.

I hope that this information will be helpful to you.

Appendix - 13

"'-i!::;"'::4

41.O32 Federal Register/Vol. zo, No. 1.33/Tuesday, ]uly 12,201.1./Proposed Rules

DEPARTMENT OF HEALTH AND 2348-P, P.O. Box 8016, Baltimore, viewing by the public, including any

HUMAN SERVICES MD 21.244-8076. personally identifiable or confidential

Please alÌow sufficient time for mailed business information that is included in

Centers for Medicare & Medicaid comments to be received before the a comment. We post all comments

Services close of the comment period. received befo¡e the close of the

3. By express or overnight moil. You comment period on the following Web

42CFRPart44O may send written comments to the site as soon as possible after they have

following address ONLY: Centers for been received http://

lcMs 2348-Pl w'vvw.reguÌ oti ons,gov. Follow the search

Medicare & Medicaid Services,

RIN 0938-4Q36 Department of Health and Human instructions on that Web site to view

Services, Attention: CMS-234S-P, Mail public comments.

Medicaid Program; Face-to-Face Comnents received timely will also

Stop C4-26-05, 7500 Security

Requirements for Home Health be available for pubÌic inspection as

Bouleva¡d, Baltimore, MD 27244-1850.

Services; Policy Changes and they are received, generally beginning

Clarifications Related to Home Health 4. By hand or courier. If you prefer,

approximately 3 weeks after publication

you may deliver (by hand or courier)

AGENCY: Centers for Medicare & of a document, at the headquarters of

your written comments before the close

Medicaid Services (CMS), HHS. the Centers for Medicare & Medicaid

of the comment period to either of the

ACTION: Proposed rule.

Services, 75oo Security Boulevard,

following addresses:

Baltimore, Maryland 21244, Mor.òay

a. For delivery in Washington, DC- through Friday of each week from 8:30

SUMMARY: This proposed ¡ule would Centers for Medicare & Medicaid

revise the Medicaid home health service a.m. to 4 p.m. To schedule an

Services, Department of Health and

definition as required by section 64O7 of. appointment to view public comments,

Human Services, Room 445-G, Hubert

the Affordable Care Act to add a phone 1-800-7 43-3951..

H. Humphrey Building, 200

requirement that physicians document Independence Avenue, SW., I. Background

the existence of a face-to-face encounter Washington, DC 2O2O7.

(including through the use of telehealth) A. General Information

(Because access to the interior of the

witlr the Medicaid eÌigible individual Title XIX of the Social Security Act

within reasonable timeframes. This Hubert H. Humphrey BuiÌding is not

readily available to persons without (the Act) requires that, in order to

proposal would align the timeframes receive Federal Medicaid matching

with similar regulatory requirements for Federal Government identification,

commenters are encouraged to leave funds, a State must offer certain basic

Medicare home health services in services to the categorically needy

accordance with section 6407 of the their comments in the CMS drop slots

located in the main lobby of the populations specified in the Act. Home

Affordable Care Act and reflects CMS' health care for Medicaid-eligible

commitment to the general principles of building. A stamp-in clock is available

for persons wishing to retain a proof of individuals who are entitìed to nursing

the President's Executive Order 13563 facility services is one of these

released fanuary 1,8, 201,1,, entitled filing by stamping in and retaining an

extra copy of the comments being filed.) mandatory setvices. Individuals

"Improving Regulation and Regulatory "entitled to" nursing facility services

Review." In addition, this rule proposes b. For delivery in Baltimore, MD-

Centers for Medicare & Medicaid include the basic categorically needy

to amend home health services populations that receive the standard

regulations to clarify the definitions of Services, Department of Health and

Human Services, 7500 Security Medicaid benefit package, and can

included medical supplies, equipment include medically needy populations if

and appliances, and clarify that States Boulevard, Baltimore, MD 27244-7850.

nursing facility services are offered to

may not limit home health services to Ifyou intend to deliver your the medically needy within a State.

services delivered in the home, or to comments to the Baltimore address,

Home health services include skilled

services furnished to individuals who please call telephone number (410) 786-

nursing, home health aide services,

are homebound. 7195 in advance to schedule your

medical supplies, equipment, and

DATES: To be assured consideration, arrival with one of our staff members.

appliances, and may include

comments must be received at one of Comments mailed to the addresses

therapeutic services. Current Medicaid

the addresses provided below, no later indicated as appropriate for hand or

regulations require an individual's

than 5 p.m. September 12,2O't'l-.. courier delivery may be delayed and physician to order home health services

received after the bomment period,

ADDRESSES: In commenting, please refer as part of a written plan of care

Submissio¡ of comments on

to file code CMS-2348-P. Because of reviewed every 60 days.

paperwork requirements. You may

staff and resource limitations, we cannot

submit comments on this document's B. Summary of New Medicare Flone

accept comments by facsimile (FAX)

paperwork requirements by following Health Foce-to-Foce Stotutory

transmission.

You may submit comments in one of the instructions at the end of the Requirements

"Collection of Information Section 6407 of the Patient Protection

four ways (please choose only one of the

wavs listed): Requirements" section in this and Affordable Care Act of zoro (the

i. Electronically. You may submit document. Affordable Care Act), (Pub. L. 1.11.-748,

electronic comnents on this regulation For information on viewing public enacted on March 23,2o"1o), as

Lo http : / /ruww.re gu I ati on s. gorz. Follow comments, see the beginning of the amended by section 10605 of the

SUPPLEMENTARY INFORMATION sECtiON,

the "Submit a comment" instructions. Affordable Care Act, affects the home

2. By regttlar moil.Yott may maiì FOB FURTHER INFORMATION CONTACT: health benefit under both the Medicare

written comments to the following Melissa Harris, (41.o) 786-33s7. and Medicaid programs.

address ONLY: SUPPLEMENTARY INFORMATION: Section 6407(a) of the Affordable Care

Centers for Medicare & Medicaid Inspection of Public Comnents: All Act (as anended by section 10605 of the

Services, Department of Flealth and comments received before the close of Affordable Care Act) acìded new

Human Services, Attention: CMS- the comment period are availabìe for requirements to section rar+(a)(z)(C) of

Appendix - 13

Federal Register/Vol. Zo, No. 133/Tuesday, July 1'2,2o1'1'lProposed Rules 4L033

the Act under Part A of the Medicare of the Affordabìe Care Act, we take into D. Other Medicaid Home Health Policy

program, and section 1S35(a)(2)(A) of consideration the existing regulatory Chonges

the Act, under Part B of the Medicare requirements under S 440.70 that 1.CÌarification That Home Health

program, that the physician, or certain provide that a physician must order an Services Cannot Be Restricted to

allowed nonphysician practitioners individuaÌ's services under the Individuals Who Are Homebound or to

(NPPs), document a face-to-face Medicaid home health benefit. We read Services Furnished in the Home

encounter with the individual the term "order" to be synonymous with

(inctuding through the use of telehealth, the Medicare term "certify." For We are proposing to incorporate in

subject to the requirements in section purposes of this rule, we use the term regulation that home health services

1834(m) of the Act), prior to making a "order" in place of the Affordable Care may not be subject to a requirement that

certification that home health services the individual be "homebound." In

Act's use of "certify."

are required under the Medicare home addition, we are proposing to clarify

health benefit. Section 1814(a)(2)(C) of We do not view implementation of that home health services cannot

the Act indicates that in addition to a section 6407 of the ,tffordable Care Act otherwise be restricted to services

physician, a nurse practitioner or as supplanting the existing Medicaid furnished in the home itself.

clinical nurse specialist (as those terms regulatory requirements related to On luly 25,2ooo, we issued a letter

are defined in section raor(aa)(s) ofthe physician orders but as consistent with to State Medicaid Directors, Olmstead

Act) who is working in collaboration those requirements. The provisions of Update No: 3, in which we discussed

with the physician in accordance with section 6407 of the Affordable Care Act Federal policies relevant to State efforts

State law, or a certified nurse-midwife make clear that the physician's order to comply with the requirements of the

(as defined in section 1861(gg) ofthe must be based on a face-to-face Americans with Disabilities Act (ADA)

Act, as authorized by State law), or a encounter. In addition, section 64o7 of in light of the Supreme Court decision

physician assistant (as defined in the Affordable Care Act provides that in Olmstead v. L.C., 527 U.S. 581 (1ssg).

iection 1861(aa)(5) of the Act), under specific NPP may perform the face-to- In attachments to that letter, we set forth

the supervision of the physician, may face encounter with the individual in specific policy clarifications to allow

conduct the face-to-face encounters lieu of the physician, and inform the States more flexibility to serve

prior to the start of home health physiciar making the initial order for individuals with disabilities in various

services. ways and in different settings.

service under tìe Medicaid home health

Section 6407(b) of the Affordable Care Attachment 3-g of the letter:

Act amended section rs3a(a)(1L)(B) of benefit.

"Prohibition of Homebound

the Act to require documentation of a Consistent with that view, in the

Requirements in Home Health" clarified

similar face-to-face encounter with a proposed regulation, we would provide that the use of a "homebound"

physician or specific NPPs by a that the physician must document the requirement under the Medicaid home

physician ordering durable medical face-to-face encounter regardless of health benefit violates Federal

equipment (DlvIE). The NPPs autlorized whether the physician himself or herself regulatory requirements at S 440.230(c)

to conduct a face-to-face encounter on or one of tÏe permitted NPPs performed and S 440.240(b). These requirements

behalf of a physician are the same for tlre face-to-face encounter. The timing of provide that mandatory benefits must be

this provision as for the provision this face-to-face encounter is specified sufficient in amount, duration and

described above, with one exception. as being within the 6-month period scope to reasonabìy achieve their

We interpret sections 64o7(b) and preceding the written order for home purpose, may not be arbitrarily denied

6407(d) of the Affordable Care Act to health services, or other reasonable or reduced in scope based on diagnosis,

prohibit certified nurse-midwives from type ofilÌness, or condition, and that

timeframe specified by the Secretary.

conducting the face-to-face encounter

Similarly, in implementing the the same amount, duration and scope

prior to the physician ordering DME.

requirements under section 6407(b) of must be available to any individual

the Affordable Care Act, relating to

within the group of categoricalÌy needy

DME, we take into account existing

individuals and within any group of

medically needy individuals. In the

Medicaid regulatory requirements under

attachment, we stated that the

specified by the Secretary. This S 440.70 requiring physician orders.

restriction of home health services to

provision also maintains the role of the Because DME is not a term used in

physician in the ¿ictual ordering of DME. individuals who are homebound to the

Medicaid in the same manner as in exclusion of other individuals in need

C. Application of Home Health Face-to- Medicare, we use the Medicaid term of these services ignores the reality that

Face Requirements to Medicaid "medical supplies, equipment and individuals with disabilities can and do

appliances" or the shortened version live and function in the community. We

Section 6407(d) ofthe Affordable Care "medical equipment." The NPPs

Act provides that the requirements for further noted that developments in

authorized to conduct a face-to-face technology and service delivery made it

face-to-face encounters in the provisions

encounter on behalf of a physician are possible for individuals with even the

described above "shall apply in the case

the same for this provision as for the most severe disabilities to participate in

of physicians making certifications for

home health services under title XIX of

provision described above, with one a wide variety of activities in the

the Social Security Act in the same exception. Certified nurse-midwives are community with appropriate supports.

manner and to the same extent as such not permitted to conduct the face-to-face We also expressed the importance of

requirements apply in the case of encounter prior to the physician ensuring that Medicaid is available to

physicians making such certifications ordering medical equipment. Therefore, provide medically necessary home

under title XVIII of such Act." The we are proposing to amend the health services to inclividuals in need of

purpose of this regulation is to Medicaid regulations at $ 440.70 to those services who are not homebound

implement that statutory directive. incorporate both the general home and continue to be an important part of

In implementing the face-to-face health and the medical equipment face- efforts to offer individuals with

encounter requirements of section 6407 to-face requirements. disabilities services in the most

Appendix - 13

47034 Federal Register/Vol. ZO, No. 133/Tuesday, July 1'2, 2O1'1'lProposed Rules

integrated setting appropriate to their appliances under the home health tìat a State could use such lists or

needs, in accordance with the ADA. benefit, other than the language presumptions, but must provide

We are clarifying in this rule that discussed in the prior paragraph. States individuals the opportunity to rebut the

Medicaid home health services may not have adopted reasonable definitions of list or presumption with a process that

be limited to services furnished in the those terms, for exampìe, based on the employs reasonable and specific criteria

home. This policy reflects prior court Medicare definition. But in the absence to assess coverage for an item based on

cases on the subject. In Skubel v. of a generalìy applicable definition of individual medical needs, and

FuoroLi, 113 F.sd 330 (2d. Ctu. 1997) the the term, there has been confusion as to determine whether the list or

court found that the Medicaid statute the oroner scooe of the benefit. presumption is based on an arbitrary

did not address the site of care for the We bälieve that a consistent approach exclusion based on diagnosis, type of

mandatory home health benefit. The to categorizing home health medical illness, o¡ condition. We have not

court found that the State could not supplies, equipment, and appliances proposed any language to reflect this

limit coverage of home health sewices will ensure beneficiaries are receiving policy in part because the principles at

to those provided at the individual's needed items and provide clear and issue are not specific to home health

residence. In 1990, the same court ruled consistent guidance to States to ensure medical equipment. We invite comment

invalid an interpretation that limited the the use of the appropriate benefit on this issue.

provision ofprivate duty nursing king this In addition, in the May 5, 2010

services to an individual's residence' criteria defining Federal Register (75 FR 24437), we

The case, Detselv. Sullivon,895 F.2d 58 quiPment, and issued the "Medicare and Medicaid

(2d Cir.1990), involved children appìiances, to better align with the Programs: Changes in Provider and

suffering from severe medical Medicare program's definition of Supplier Enrollment, Ordering and

conditions. Following the Delse.l case, durable medical equipment found at Referring, and Documentation

CMS, then the Health Care Financing 541,4.202. We propose that supplies are

Administration, ultimately adopted the defined as "health care related items

court's standard and issued nationwide that are consumable or disposable, or

guidance eliminating the at-home cannot witÏstand repeated use by more we have not incorporated changes to the

restriction on private duty nursing, To than one individual." We propose that scope of providers that may order

date, we have not issued similar medical equipment and appliances are medical supplies, equipment and

guidance requiring nationwide adoption "items that are primarily and appliances in the Medicaid program, as

of the Skubel ruling. We are using our customarily used to serve a medical section 6405(a) ofthe Affordable Care

authority through tìis rulemaking purpose, generally not useful to an Act was not applicable to Title XIX, we

opportunity to do so. individual in the absence of an illness are specifically soliciting comments

or injury, can withstand repeated use, through this rule on the merits of doing

2. Clarification of the Definition of and can be reusabìe or removable."

Medical Supplies, Equipment and We believe these standard definitions

Appliances will ensure that such items will be IL Provisions ofthe Proposed

An important component of the available to all who are entitled to the Regulations

Medicaid home health benefit is home health benefit, and not restricted

Please note that although the

medical supplies, equipment and to individuaÌs eligible for targeted

Affordable Care Act uses the term

appliances, under S 447.70(b)(3). The benefits through home and community-

"individual" to refer to the Medicaid

cuirent wording of the regulation does based services (HCBS) waivers or the

benefi ciary, throughout this proposed

not further define these terms, except to section 1915(i) HCBS State Plan option,

rule we have used "recipient" to mirror

indicate that these items should be Items that meet the criteria for coverage

the regulation text in the current

"suitable for use in tle home." under the home health benefit must be

Although this phrase could be read to covered as such. States will not be

Medicaid home health regulations. At

refer only to the type of items included precluded from covering items meeting this time, we do not intend to modify

this term.

in the benefit, it has been susceptible to this definition through a section 1915(c)

reading as a prohibition on use of HCBS waiver service, such as a home For the reasons discussed above, we

covered items outside the home' We are modification, or through a section propose to modify $ 4a0.70(b)(3) to say

using this opportunity to revise that 1915(Ð State PIan option. However, the the following: "Medical supplies,

phrase to make clear that it is not a State must also offer those items as equipment and appliances suitable for

limitation on the location in which home health supplies, equipment and use in any non-institutional setting in

items are used, but rather refers to items appliances. which normal life activities take place,"

that are necessary for everyday activities In S aao.7o(b)(3)(i) and (ii), we

3. Other Issues propose revising the current text to

and not specialized for an institutional

setting. Thus we would indicate that We note that we are considering define what constitutes medical

these items must be "suitable for use in whether other clarifications to the home supplies, equipment, and appliances.

any non-institutional setting in which health regulations are warranted. In We propose to indicate that supplies are

normal life activities take place." This particular, we are considering whether defined as "health care related items

would clarify that although States may it would be useful to include language that are consumable or disposable, or

continue to establish medical necessity to reflect the policies set forth in a cannot withstand repeated use by more

criteria to determine the authorization September 4, 1998 letter to State than one individual." We propose to

of these items, States may not denY Medicaid Directors, responding in part indicate that medical equipment and

requests for these items based on the to a Second Circuit decision in Desario appliances are "items that are primarily

grounds that they are for use outside of v. Thomos, l3s F, 3d 80 (1998), about and customarily used to serve a medical

the home. the use of lists or other presumptions in purpose, generally not useful to an

Current Medicaid regulations do not determining coverage of items under the individual in the absence of an illness

contain any specific definition of home health benefit for medical or injury, can withstand repeated use,

medical supplies, equipment, and equipment. In that letter, we indicated and can be reusable or removable." We

Appendix - 13

Federal Register/Vol. zo, No. 133/Tuesday, Iuly 1'2, 2o1'1'lProposed Rules 41035

are specifically soliciting comment on achieve this goal, the encounter must working in collaboration with the

these nrooosed orovisions. occur close enough to the start of home physician in accordance with State law,

For ihe'reasoris discussed above, we health services to ensure that the or a certified nurse-midwife (as defined

propose to modify S 440.70(c), to add clinical conditions exhibited by the in section 186r(gg) of the Act, as

the folìowing text to the end of the recipient during the encounter are authorized by State law), or a physician

current provision: "Nothing in this related to the primary reason for the assistant (as defined in section

section should be read to prohibit a recipient's need for home health 1861(aa)(5) of the Act), under the

recipient from receiving home health services. As such, we believe that suoervision of the ohvsician.

setvices in any non-institutional setting encounters would need to occur closer îhe statutory prôviÉion allows the

in which normal life activities take to the start of home healtl services permitted NPPs to perform the face-to-

place." Although the Court indicated rather than the 6-month period initially face encounter and inform the

ihat individuals would be limited to the indicated, but not required by the physician, who documents the

same number of service hours they Affordable Care Act. encounter.

would have received if the home health Consistent with the Medicare Based on the same reasoning set out

se¡vices were provided only in their program's implementation of this in the Medicare proposed rule,

place ofresidence, in an effort to not provision, we propose to indicate in a Medicare Program; Home Health

limit the ability of States to offer a more new $ 440.70(f)(1) that for the initial Prospective Payment System Rate

robust home health benefit, we propose ordering of home health services, the Update for Calendar Year 2O72i

to allow States the option to authorize physician must document ürat a face-to- published elsewhere in this Federal

additional services or hours of services face encounter that is related to the Register, for individuals admitted to

to account for this new flexibility. We primary reason the individual requires home health upon discharge from a

also propose to add more text at the end home health services has occurred no hospital or post-acute setting, we

of this provision as follows: "Additional more than 90 days prior to the start of propose to also allow the physician who

services or service hours may, at the services under the Medicaid home attended to the individual in the

State's option, be authorized to account health benefit. We believe that in most hospital or post-acute setting to inform

for medical needs that arise in these cases, a face-to-face encounter with a the ordering physician regarding their

settings". This will incorporate both the recipient within the 90 days prior to the encounters with the individuaÌ to satisfy

Skubel and Olmstead decisions into the start of home health services will the face-to-face encountet requirement,

provision of home health services. This provide the physician and/or specified much like an NPP currently can.

State flexibility would be applied to the NPPs with a current clinical We propose to add a new

State's Medicaid program as a whole, presentation of the recipient's condition S 440.70(Ð(2) to list the practitioners

and would not be a person-specific such that the physician can accurately that may perform the face-to-face

fl exibiÌity. State medical necessity order home healtl services and encounters. These practitioners include

criteria would continue to be applied establish an effective care plan, based the physician aìready referenced in

uniformly to all Medicaid individuals. on the encounter conducted by either S aao.70(a)(z), and the following NPPs:

We note that any such additional hours the physician or allowed NPP. We also A nurse practitioner or clinical nurse

of service that are authorized by the believe that a face-to-face encounter specialist (as those terms are defined in

State would be matched at the State's which occurs within 90 days prior to section 186L(aa)(5) of the Act) who is

current Federal Medical Assistance the start of services would be generally working in collaboration with the

Percentage (FMAP). relevant to the reason for the recipient's physician in accordance with State law,

The remainder of this section pertains need for home health services, and or a certified nurse-midwife (as defined

to proposed changes to S 440.70 to therefore such a face-to-face encounter in section 1ao1(gg) ofthe Act, as

incorporate provisions of the Affordable would be sufficient to meet the goals of authorized by State law), or a physician

Care Act. this statutory requirement. We assistant (as defined in section

Section 6407 of the Affordable Care recognize, however, that there may be 1861(aa)(5) of the Act), under the

Act requires, as a condition for payment circumstances when it may not be supervision ofthe physician, and for

for home health services, possible to meet this general recipients admitted to home health

documentation of a face-to-face requirement, and the individual's access immediately after an acute or post-acute

encounter prior to an order for such to needed services must be protected. stay, the attending acute or post-acute

services. Section 6407 of the Affordable To account for these circumstances, we ohvsician.

' fre aìso propose to add a new

Care Act requires that the timing of the also propose in Saa0.70(f)(1) to allow an

face-to-face encounter for home health opportunity to meet the face-to-face S 440.70(Ð(3) to indicate that if an

services must occur within the 6-month encounter requirement through an attending acute or post-acute physician

period preceding certification, or other encounter with the recipient within 30 or allowed NPP conducts the face-to-

ieasonable timeframe determined by the days after the start of home health face visit, the attending acute or post-

Secretary. Based on the same reasoning servtces. acute physician or practitioner is

set out in the Medicare final rule, While we recognize the necessity of required to communicate the clinical

Medicare Program; Home Heaìth permitting face-to-face encounters to findings of the face-to-face encounter to

Prospective Payment System Rate occur after the start of services in the the physician, in order for the physician

Update for Calendar Year 2011; Changes instances described above, we to document the face-to-face encounter

in Certification Requirements for Home emphasize that the timing of the face-to- accordingly. This requirement is

Health Agencies and Hospices as face encounter in normal circumstances necessary to ensure that the physician

published in the November 1.7,2o1o, should occur within the 90 days prior has sufficient information to determine

Federal Register, we propose to to the start of home health services. the need for home health services, in the

determine a reasonable timeframe for The statute describes NPPs who may absence of conducting the face-to-face

the face-to-face encounter that is shorter perform this face-to-face encounter as a encounter himself or herself. We are

than 6 months. The statutory goal is to nurse practitioner or clinical nurse also proposing to specify that these

achieve greater physician accountability specialist, as those terms are defined in clinical findings must be reflectecl in a

in ordering home health services. To section 1861(aa)(5) of the Act, who is written or electronic document included

Appendix - 13

41036 Federal Register/Vol. zO, No. 1.33/Tuesday, Iuly 1'2, 2o11lProposed Rules

in the recipient's medical record does not permit certified nurse in a way that embraces a person-

(whether by the physician or by the midwives to conduct face-to-face centered philosophy. For clarification

NPP). We are not prescribing at the encounters required for these items. and consistency among programs, our

Federal level the specific elements This is reflected in our proposed expectation regarding the person-

necessary to document the face-to-face g ++0,70(g)(2). centered philosophy is that the plan of

encounter, as that is a matter of clinical The proposal to limit the face-to-face care reflects what is important to the

judgment that could vary according to requirements to items that would be recipient and for the recipient. The

the individual circumstance. However, subject to such requirements as durable person-centered approach is a process,

States may choose to implement a medical equipment under the Medicare directed by the recipient with long-term

minimum list of required information to progran is based on the aim of support needs, or by another person

adeouatelv document the encounter. maximizing consistency with the important in the life of the recipient

In'a nerú S 440.70(fX4)(i), we propose Medicare program's implementation of who the recipient has freely chosen to

to require that the physician's section 6407 of the Affordable Care Act direct this process, intended to identify

documentation of the face-to-face and reducing administrative burden on the strengths, capacities, preferences,

encounter must be either a separate and the provider community. Thus we needs, and desired outcomes of the

distinct area on the written order, an would only require that, for items of recipient. The person-centered process

addendum to the order that is easily durable medical equipment specified by includes the opportunity for the

identifiable and clearly titled, or a CMS under the Medicare plogram as recipient to choose others to serve as

separate document easily identifiable subject to a face-to-face encounter important contributors to the planning

and clearly titled in the recipient's requirement, the physician must Drocess.

medical record. The documentation document that a face-to-face encounter ' This process and the resulting service

must also describe how the health status that is related to the primary reason the plan will assist the recipient in

of the recipient at the time of the face- individual requires the item has achieving personally defined outcomes

to-face encounter is related to the occurred no more than 90 days before in the most integrated community

primary reason the recipient requires the order is written or within 30 days setting in a manner that reflects what is

home health services. In a new after the order is written. We intend to important to the recipient to ensure

S 440.7O(fl(4xii), we propose to require issue guidance to States indicating how delivery of services in a manner that

that the physician's documentation of they, and providers, can access the reflects personaì preferences and

tlre face-to-face encounter be clearly current Medicare list of specific durable choices, and what is important for the

titled, and state that either the physician medical equipment items subiect to the recipient to meet identified support

himself or herseìf, or the applicable face-to-face requirement. needs.

NPP, has conducted a face-to-face Medical supþlies, equipment and

encounter with the recipient and appÌiances for which a face-to-face III. Collection of Information

include the date of that encounter. encounter would not be required under Requirements

Finally, we propose to add a new the Medicare program as durable Under the Paperwork Reduction Act

S 440.70(Ð(5) to indicate that the face-to- medical equipment, would not require a of 1995, we are required to provide 60-

face encounters may be performed face-to-face encounter prior to the day notice in the Federal Register and

through the use of telehealth. We are ordering of items under the Medicaid solicit public comment before a

aware that many States currently make program. These items will be of a collection of information requirement is

use of telehealth or telemedicine in the imaller dollar value, and at a decreased submitted to the Office of Management

delivery of Medicaid services. Medicaid risk for fraud, waste and abuse. We and Budget (OMB) for review and

has issued informal guidance on the welcome public comment on this approval. In order to fairly evaluate

parameters of telehealth and anoroach. whether an information collection

telemedicine that is modeled after

^

foe recognize the difficulty that some should be approved by OMB, section

Medicare requirements. We are recipients with complex medical needs 3506(c)(zXA) of the Paperwork

proposing to allow States to continue may face in participating in a face-to- Reduction Act of 1995 requires that we

utilizing their current telehealth face encounter (such as issues with solicit comment on the following issues:

technologies as they apply to the accessing transportation, obtaining . The need for the information

implementation of this provision, caregiver support, etc.,) particularly in collection and its usefulness in carrying

however we are cognizant that State rural areas. Once this rule ìs finalized, out the proper functions of our agency.

Medicaid telehealth policies may not we expect States to implement this . The accuracy of our eistimate of the

align with Medicare's. We wish to provision in a way that does not result information collection burden.

minimize duplication and fragmentation in barriers to service delivery, as this is . The quality, utility, and clarity of

of services for beneficiaries who are not the intent of the legislation. The the information to be collected.

dually-eligible for Medicare and statute specifically references telehealth . Recommendations to minimize the

Medicaid, and therefore we are as an alternative for ensuring that this information collection burden on the

specificalìy soliciting comnent on new requirement is implemented in a affected public, including automated

approaches to telehealth policy that way that protects continuity of services. collection techniques.

would further this goal. We encourage States to work with the We are soliciting public comment on

In a new S e+0.70(d, we propose to home health provider community to each of these issues for the following

apply all of the requirements of incorporate these face-to-face visits jn sections of this document that contain

S 440.70(0 to the provision of supplies, creative and flexible ways to account for information collection requirements

equipment and appliances as described individual circumstances. We are (lCRs)r

in S aaO.70(b)(s) to the extent that a available to provide technical assistance Proposed S 440.70(fJ(3) and (g)(r)

face-to-face encounter would be to States in achieving this goal. require NPPs and attending acute or

required under the Medicare program In keeping with a movement across all post-acute physicians to communicate

for durable medical equipment, with Medicaid services, we expect the plans the clinical findings of the face{o-face

one exception from the requirements at of care deveÌoped to address a encounter to the ordering physician.

S 440,70(Ð. The Affordable Care Act recipient's home health needs be done The burden associated with these

Appendix - 13

Federal Register/Vol. Zo, No. L33/Tuesday, July 1,2,2o1'1'lProposed Rules 47037

d ADDRESSES section of this proposed rule; similar face-to-face encounter with a

or physician or specific NPPs by a

cians 2. Submit your comments to the physician ordering durable medicaÌ

his is Office of lnformation and Regulatory equipment (DME). The NPPs autlorized

Affairs, Office of Management and to conduct a face-to-face encounter on

encounter. We estimate that there would Budget, Attention: CMS Desk Officer, behalf of a physician are the same for

be 1,1.43,443 initial home health ICMS-2348-Pl Fax: (zoz) 395-6974; or this provision as for the provision

episodes in a year based on our 2008 E -m ail : OIRA _subnt i s si on@omb. e op. gov. described above, with one exception.

claims data. As such, the estimated Certified nurse-midwives are not

IV. Response to Comments permitted to conduct the face-to-face

burden for the NPP and attending acute

or post-acute physicians documenting, Because of the large number of public encounter prior to tlre physician

signing, and dating the recipient's face- comments we normally receive on ordering DME. The timing of tìis face-

to-face encounter would be 1'so,574 Federal Register docunents, we are not to-face encounter is specified as being

hours for CY 2071.. able to acknowledge or respond to them within the 6-month period preceding

Proposed S 440.70(f)(4) and (e)(r) individuaìly. We will consider all the written order for DME, or other

would require that physicians document comments we receive by the date and reasonable timeframe specified by the

the existence of a face-to-face encounter time specified in the DATES section of Secretary. This provision also maintains

with the Medicaid eligible recipient. this preamble, and, when we proceed the role ofthe physician in the actual

The burden associated with these with a subsequent document, we will ordering of DME.

requirements would be the time and respond to the comments in the B. Overall Impact

effort required for the physician to preamble to that document.

complete and maintain this We have examined tlre impacts of t}ris

V. Regulatory Impact Statement rule as required by Executive Order

documentation. The ordering

physician's burden for composing the A. Statement of Need 12866 on Regulatory Planning and

face-to-face documentation, which Review (September 30, 1993), Executive

This regulation is necessary to Order 13563 on Improving Regulation

would include determining how the implement Section 6407 of the Patient

clinical findings ofthe encounter and Regulatory Review (lanuary 18,

Protection and Affordable Care Act of 2011), the Regulatory Flexibility Act

support eligibility; writing, typing, or 2009 (the Affordable Care Act), (Pub. L.

dictating the face-to-face (RFA) (September 19, 1980, Pub. L. s6-

71.7-L48, enacted on March 23,2o1.o), as 354), section 1102(b) ofthe Social

documentation; signing, and dating the

amended by section 10605 of the Security Act, section 2O2 of ltre

recipient's face-to-face encounter is

Affordable Care Act which affects the Unfunded Mandates Reform Act of 1gg5

estimated at 10 minutes for each

home health benefit under both the (March 22,ls95, Pub. L. 104--4), and

encounter. We estimate that there would

Medicare and Medicaid programs. Executive Order 13132 on Federalism

be 1,143,443 initial home health

Section 6407(a) ofthe Affordable Care (August 4, 1999), and the Congressional

episodes in a year based on our 2008

claims data. As such, the estimated

Act (as amended by section 10605) Review Act (s U.S.C. s04(2)).

burden for the physician documenting, added new requirements to section Executive Orders 12866 and 13563

r81a(a)(2XC) of the Act under Part A of direct agencies to assess all costs and

signing, and dating the recipient's face-

to-face encounter would be 1,9O,574 the Medicare program, and section benefits of available regulatory

hours for Cy 20L1.. We acknowledge 1835(aX2)(A) of the Act, under Part B of aìternatives and, ifregulation is

the Medicare program, that the necessary, to select regulatorY

that this figure is inflated by the

instances in which the physician physician, or certain allowed approaches that maximize net benefits

himself or herself conducted the face-to- nonphysician practitioners (NPPs), (including potential economic,

face encounter with the individual, document a face-to-face encounter with environmental, public health and safety

making this second 1O-minute the individual (including through the effects, distributive impacts, and

documentation burden unnecessary. use of telehealth, subject to the equity). Executive Order 13563

This notice of proposed rulemaking requirements in section 1834(m) of the emphasizes the importance of

also serves as the required oo-day Act), prior to making a certification that quantifuing both costs and benefits, of

Federal Register notification for home health services are required under reducing costs, of harmonizing rules,

aforementioned information collection the Medicare home health benefit. and of promoting flexibility. A

requirements. To obtain copies of the Section 1814(aX2)(C) of the Act regulatory impact analysis (RIA) must

supporting statement and any related indicates that in addition to a physician, be prepared for major rules with

forms for the proposed paperwork a nurse practitioner or clinical nurse economicaÌly significant effects ($100

coìlections referenced above, access specialist (as those terms are defined in million or more in any 1 year). We

CMS' Web sile at http://vvww.ctns.gov/ section 1861(aa)(5) of the Act) who is tentativeìy estimate that this rulemaking

P op erworkÃe dtt cti on A ctof 1 I I 5 /PRAL/ working in collaboration with the may be "economically significant" as

list.osp#TopOfPoge or e-mail your physician in accordance with State law, measured by the $100 million threshold,

request, including your address, phone or a certified nurse-midwife (as defined and, therefore, may be a major rule

number, OMB number, and CMS in section r861(gg) of the Act, as under the Congiessionaì Review Act.

document identifier, to authorized by State law), or a physician Accordingly, we have prepared a

Po perwork@cm s.hh s.gov, or caìl the assistant (as defined in section Regulatory Impact Analysis which to

Reports Clearance Office at 41.0-786- 1861(aa)(5) of the Act), under the the best of our ability presents the costs

1326. supervision of the physician, may and benefits of the rulemaking.

If you comment on these information conduct the face-to-face encounters The CMS Office of the Actuary

collection and recordkeeping prior to the start of home health estimated Section 6407 as having no

requirements, please do either of the servi ces. potential impact on Federal Medicaid

following: Section 6407(b) of the Affordable Care costs and savings. According to the CMS

1. Submit your comments Act amended section lsaa(a)(11)(B) of Actuarial estimates, Section 6407 wouìd

eìectronically as specified in the the Act to require documentation of a bring an estimated $350 million in

Appendix - 13

41038 Federal Register/Vol. zo, No. 133/Tuesday, July 1,2,201,1/Proposed Rules

savings to the Me&icare program from beds. We are not preparing an analysis A. Redesignating paragraphs (bX3)(i)

2o7o-2o14 and $azo million in savings for section 1102(b) of the Act because and (ii) as (bX3Xiii) and (iv),

from 2010-2019. Although this the Secretary has determined that this respectively.

provision applies to Medicaid in the proposed rule would not have a B. Revising the introductory text of

same manner and to the same extent as aignificant impact on the operations of paragraph (b)(3).

the Medicare program, no estimates a substantial number of small rural C. Adding new paragraphs (b[e)(i)

(costs or savings) were noted for the hosnitals. and (ii).

Medicaid program. Säction 2o2 of Ihe Unfunded D. Adding paragraphs (cX1) and (2).

Aìthough tliere is no quantitative data Mandates Reform Act (UMRA) of 1995 E. Adding paragraphs (0 and (g).

to arrive at a specific dollar figure to also requires that agencies assess The revisions and additions read as

attribute to the additional medical anticipated costs and benefits before follows:

supplies, equipment, and appliances issuing any rule that may result in

that may now be authorized in expenditure in any one year of $100 S440,70 Home health services,

accordance with S 440.70(b)(3), we million in 1995 dollars, updated *****

acknowle annually for inflation. In 2011, that (b)* **

provision threshold level is approximately $136 (s) Medical supplies, equipment, and

economic te million. This proposed rule will not appliances suitable for use in any non-

however, lt result in an impact of $136 million or institutional setting in which normal

in offsetting benefits to both more on State, local or tribal life activities take place.

beneficiaries and State budgets, governments, in the aggregate, or on the (i) Supplies a¡e defined as health care

including the ability for individuals to nrivate sector. related items that are consumable or

return to or enter the workforce, thereby ' Executive Order 13132 establishes disposable, or cannot withstand

oftaxpaYers, and certain requirements that an agency repeated use by more than one

on other Medicaid must meet when it promulgates a individual.

institutional care. proposed rule (and subsequent final (ii) Equipment and appliances are

,A,lthough there is no specific estimate iule) that imposes substantial direct defined as items tlat are primarily and

regarding these benefits, they requirement costs on State and local customarily used to serve a medical

nonetheless should be taken into governments, preempts State law, or purpose, generally not useful to an

ac otherwise has Federalism implications. individual in the absence of an illness

co Since this regulation does not impose or injury, can witlstand repeated use,

co any costs on State or local govemments, be reusable or removable.

the various the requirements of Executive Order ïU "i"

the RIA. 13132 are not applicable, (c)* * *

agencies to analYze (1) Nothing in this section shouìd be

y relief for small C. Conclusion

read to prohibit a recipient from

a significant imPact We tentatively estimate that this rule receiving home health services in any

on a substantial number of small may be "economically significant" as non-institutional setting in which

entities. For purposes of the RFA, small meàsured by the $100 million threshold normal life activities take place.

entities include small businesses, as set forth by Executive Order 12866, (z) Additional services or service

nonprofit organizations, and small as well as the Congressional Review hours may, at the State's option, be

Act. The analysis above provides our authorized to account for medical needs

initial Regulatory Impact Analysis. We tlrat arise in*these settings.

have not prepared an analysis for the

RFA, section 1102(b) of the Act, section (fl No payment may be made for

2o2 of t]ne UMRA, and Executive Order

se¡vices referenced in paragraphs (b)(r),

1 year. For details, see the Small 13132 because tlre provisions are not (z), and (4) of this section, unless the

Business Administration's final rule that imoacted bv this rule.

set forth size standards for healtl care Ii accordänce with the provisions of physician referenced in paragraph (a)(2)

of this section documents that there was

industries, (65 FR 69432, November 17, Executive O¡der 12866, this regulation

a face-to-face encounter with the

2000). IndividuaÌs and States are not was reviewed by the Office of

included in the definition of a small Mãnagement and Budget. recipient that meets the following

entity. We are not preparing an iuralysis requirements:

List ofSubjects in 42 CFR Part 44o (1) For the initiation of services, the

for the RFA because the Secretary has

determined that this proposed rule Grant programs-health, Medicaid. face-to-face encounter must be related to

would not have a significant economic For the reasons set forth in the the primary reâson the recipient

impact on a substantial number of small preamble, the Centers for Medicare & requires home health services and must

entities, Medicaid Servíces proposes to amend occur within the 90 days prior to or

In addition, section 1102(b) ofthe 42 CFR chapter IV as set fortl below: within the 30 days after the start of the

Social Security Act requires us to servlces.

prepare a regulatory impact analysis if PART 440-5ERVICES: GENERAL (2) The face-to-face encounter may be

a rule may have a significant impact on PROVISIONS conducted by one of the following

the operations of a substantial number practitioners:

1. The authority citation for part 440 (i) The physician referenced in

of small rural hospitals. This analysis continues to read as follows:

must conform to the provisions of paragraph (a)(2) ofthis section;

section 603 of the RFA. For purposes of Authority: Sec.1102 ofthe Social Security (ii) A nurse practitioner or clinical

Act (42 u.s.c. 1302). nurse specialist, as those terms are

section "11o2(b) of the Act, we define a

small rural hospital as a hospital that is defined in section 1s61(aa)(5) ofthe

Subpart A-Definitions Act, working in collaboration with the

located outside of a Metropolitan

Statisticaì Area and has fewer than 100 2. Section 44O.7O is amended bY- physician described in paragraph (a) of

Appendix - 13

Federal Register/Vol. 76, No. 133/Tuesday, July 1,2, 2o1'1'lProposed Rules 41039

this section, in accordance with State the associated home health'services, the equipment under the Medicare program,

law; physician responsible for ordering the unless the physician referenced in

(iii) A certified nurse midwife, as services must: paragraph (a)(2) ofthis section

defined in section 1861(gg) of the Act, (i) Document the face-to-face documents a face-to-face encounter with

as authorized by State law; encounter as a separate and distinct area the recipient consistent with the

(iv) A physician assistant, as defined on the order itself, as an easily requirements of paragraph (Ð of this

in section 1861(aa)(5) of the Act, under identifiable and clearìy titled addendum section except as indicated below.

the supervision ofthe physician to the order, or a separate document (2) The face-to-face encounter may be

described in subparagraph (a) ofthis easily identifiable and clearly titled in performed by any of the practitioners

section; or the recipient's medical record, to

(v) For recipients admitted to home described in paragraph (Ð(2)of this

describe how the health status of the section, with the exception of certified

health immediately after an acute or recipient at the time of the face-to-face

post-acute stay, the attending acute or nurse-midwives, as described in

encounter is related to the primary paragraph (fX2Xiii)of this section.

oost-acute nhvsician. reason the recipient requires home

^ (s) The allo'*"d nonphysician (Catalog of Federal Domestic Assistance

healtl services.

practitioner, as described in paragraph (ii) Must indicate the practitioner who Program No. 93.778, Medicaì Assistance

(fl(3xiÐ through (iv) of this section, or Program).

conducted the encounter, and be clearly

the attending acute or post-acute

titled and dated on the documentation Dated: Ma¡ch 2,2oIl.

physician, as described in paragraph

(fJ(sX") of this section, performing the of the face-to-face encounter. Donald M. Berwick,

(5) The face-to-face encounter may Administroto¡, Centers for Medicare t

face-to-face encounter must

communicate the clinical findings of occur through telehealth, as Medicoid Seruices.

that face-to-face encounter to the implemented by the State.

Approved: June 3, 2011,

ordering physician. Those clinical (gXr) No payment maY be made for

Kathleen Sebelius,

findings must be incorporated into a medical equipment, supplies, or

appliances referenced in paragraph Secrelory, Department of Heolth antl Humon

written or electronic document included Senrices,

in the recioient's medical record. (bX3) of this section to the extent that

(4) To as'sure clinical correlation a face-to-face encounter requirement IFR Doc. 2011-16s37 Filed 7-s-11; 4:15 pm]

between the face-to-face encounter and would apply as durable medical BILLING CODE 412O-O1-P

Appendix - 13

TEXAS MEDICÂID PROVIDER PROCEDURES MANUAL: VOL.2

2.2.25 Procedure Codes That Do Not Require Prior Authorization

The procedure codes listed in the following table do not require prior authorization for clients who are

receiving services under Home Health Services. Although prior authorization is not required, providers

must retain a completed Home Health Services (Title XIX) Durable Medical Equipment

(DME)/Medical Supplies Physician Order Form for these clients. For medical supplies not requiring

prior authorization, a completed Home Health Services (Title XIX) Durable Medical Equipment

(DME)/Medical Supplies Physician Order Form may be valid for a maximum of six months unless the

physician indicates the duration ofneed is less. Ifthe physician indicates the duration ofneed is less than

six months, then a new Home Health Services (Title XIX) Durable Medical Equipment (DME)/Medical

Supplies Physician Order Form is required at the end ofthe duration ofneed. It is expected that

reasonable, medically necessary amounts will be provided.

The use of these services is subject to retrospective review. This is not an all inclusive list.

Procedure Codes

80570 F,0575 E0580 s8101

A.4310 4431 r 1'4312 44313 L43t4 1'43L5 /'43L6 44320 1'4327 44322

/'4326 44327 44328 44330 /'433s 44338 1.4340 ¡^4344 1'4346 /'435r

1'4352 1^4353 1'4354 /'4355 /'4356 1.4357 A'43s8 /^4402 1.4554 Asr02

A'510s L5L12 45113 45114 A5L2O Asr22 45131

^5r27

L4614 44627

' Prior authorizatio¡r is required for certlin diagnoses and ifliurit¡rtions ¡re exceeded. Refer to Subsection

2.2.l9,2, "Nebulizers" irl this handbook.

" Prior autlrorization is required for solne procedure codes if the lnlxiutur¡t limitation is excectled, Refer to

Subsectiolt 2.2.l2.9, "Irrcontirrencc Proce<lure Codes rvith Linlitations" il this handbool<.

2.3 Other/Special Provisions

2.3.1 Medicaid Relationship to Medicare

2.3.1.1 Possible Medicare Clients

It is the provider's responsibility to determine the type of coverage (Medicare, Medicaid, or private

insurance) that the client is entitled to receive. Home health providers must follow these guidelines:

. Clients who are 64years of age and younger without Medicare Part A or B:

. If the agency erroneously submits an SOC notice to Medicare and does not contact TMHP for

prior authorization, TMHP does not assume responsibility for any services provided before

contacting TMHP. The SOC date is no more than three business days before the date the agency

contacts TMHP, Visits made before this date are not considered a benefft of the Home Health

Services Program.

. Clients who are 65 years of age and older without Medicare Part A or Part B and clients with

Medicare Part A or B regardless of age:

. In filing home health claims, home health providers maybe required to obtain Medicare denials

before TMHP can approve coverage. When TMHP receives a Medicare denial, the SOC is deter-

mined by the date the agency requested coverage from Medicare. If necessary the 95-day claims

filing deadline is waived for these claims, provided TMHP receives notice of the Medicare denial

within 30 days of the date on the MRAN containing Medicare's final disposition.

DM-t24

CP'I'ONLY . COPYRfCHT 20I I AMERICAN MEDICAL ASSOCIATION ALL RIGHTS RESERVED

Appendix - 14

DURA,BLE MEDICAL EQUIPMENT, MEDICAL SUPPLIES, AND NUTRITIONAL PRODUCTS HANDBOOK

. the agency receives the MRAN and continues to visit the client without contacting TMHP by

If

telephone, mail, or fax within 30 days from the date on the MRAN, TMHP will provide coverage

only for services provided from the initial date of contact with TMHP. The SOC date is deter-

mined accordingly. TMHP must have the MRAN before considering the request for prior

authorization.

2.3.1.2 Benefits for Medicore/Medicaid ClÍents

For eligible Medicare/Medicaid clients, Medicare is the primary coinsurance and providers must contact

Medicare first for prior authorization and reimbursement. Medicaid pays the Medicare deductible on

Part B claims for qualified home health clients.

Home health service prior authorizations may be given for HHA services, certain medical supplies,

equipment, or appliances suitable for use in the home in one of the following instances:

. When an eligible Medicaid client (enrolled in Medicare) who does not qualiS' for home health

seryices under Medicare because SN care, PT, or OT are not a part of the client's care,

. When the medical supplies, equipment, or appliances are not a benefìt of Medicare Part B and are a

benefit of Home Health Services.

Federal and state laws require the use of Medicaid funds for the payment of most medical services only

after all reasonable measures have been made to use a client's third party resources or other insurance.

Note: If the client has Medicare Part B coverage, contact Medicarefor prior authorization require-

ments and reimbursement. If the service is q Part B benefit, do not contact TMHP for prior

authorization. Texas Medicaid will only pay the coinsurønce and deductible on the electronic

crossover cloirn,

TMHP will not prior authorize or reimburse the difference between the Medicare payment and the retail

price for Medicare Part B eligible clients.

Refer to: Subsection 4.13, "Third Party Liability (TPL)" in Section 4, "Client Eligibility' (Vol. 1,

General Informøtion).

2.3.1,3 Medicare and Medicoid Prior Authofizat¡on

Contact TMHP for prior authorization of Medicaid services (based on medical necessity and benefìts of

Home Health Services) within 30 days of the date on the MRAN.

Note: For MQMB clients, do not submit prior authorization requests to TMHP if the Medicare

denial reason states "not medically necessary." Medicaid only will consider prior øuthori-

zation requests if the Medicøre denial states "not ø benefit" of Medicare.

Qualified Medicare Benefìciaries (QMB) are not eligible for Medicaid benefìts. Texas Medicaid is only

responsible for premiums, coinsurance, or deductibles on these clients, Providers should not submit

prior authorization requests to the TMHP Home Health Services Prior AuthorizationDepartment these

clients.

To ensure Medicare benefits are used ffrst in accordance with Texas Medicaid regulations, the following

procedures apply when requesting Medicaid prior authorization and payment of home health services

for clients.

Contact TMHP for prior authorization of Medicaid services (based on medical necessity and benefits of

Home Health Services) within 30 days of the date on the MR {N. Fax a copy of the original Medicare

MRAN and the Medicare appeal reviewletter to the TMHP Home Health Services Prior Authorization

Department for prior authorization.

Note: Claimsfor STAR+PLUS MQMB clients (those with Medicare and Medicøid) must always be

submitted to TMHP as noted on these pøges. The STAR+PLUS health pløn is not responsible

for these services if Medicare denies the service as not a benefit.

DM-125

CPT ONLY . COPYRICHT 20I I A.MERICAN MEDÍCAL ASSOCIATION, ALL RIGHTS RESERVED.

Appendix - 14

TEXAS MEDICAID PROVIDER PROCEDURES MANUAL: VOL' 2

When the client is 65 years of age and older or appears otherwise eligible for Medicare such as blind and

disabled, but has no Part A or Part B Medicare, the TMHP Home Health Services Prior Authorization

Department uses regular prior authorization procedures. In this situation, the claim is held for a midyear

staius determined by HHSC. The maximum length of time a claim may be held in a "pending status" for

Medicare determination is 120 days. After the waiting period, the claim is paid or denied. If denied, the

EOB code on the R&S report indicates that Medicare is to be billed.

Refer to: Subsection 3.2.3,"Home Health Skilled Nursing Services" inNursing and Therapy Services

Høndbook (Vol. 2, Provider Høndbool<s).

2.4 Claims Filing and Reimbursement

2.4.1 Claimslnformation

Providers must use only type of bill (TOB) 331 in Form Locator (FL) 4 of the UB-04 CMS-1450. Other

TOBs are i¡valid and result in claim denial.

Home Health services must be submitted to TMHP in an approved electronic format or on a CMS-1500

or a UB-04 CMS-1450 paper claim form. Submit home health DME and medical supplies to TMHP in

an approved electronic format, or on a CMS-1500 or on a UB-04 CMS-1450 paper claim form' Providers

may purchase UB-04 CMS-1450 and CMS-1500 paper claim forms from the vendor of their choice.

TMHP does not supply them.

When completing a CMS-1500 or a UB-04 CMS 1450 paper claim form, providers must include all

required information on the claim, as TMHP does not key information from attachments, Superbills, or

itemized statements, are not accepted as claim supplements.

Refer to: Section 3: TMHP Electronic Data Interchange (EDI) (Vol. 1, General Informøtion) for

information on electronic claims submissions'

Section 6: Claims Filing (Vol. 1, General Information) for general information about claims

filing.

Subsection 6.6, "UB-04 CMS-1450 Paper Claim Filing Instructions" in Section 6, "Claims

Filing" (Vol. I, General Informøtion),

Subsection 6.5, "CMS-1500 Paper Claim Filing Instructions" in Section 6, "Claims Filing"

(Vol. 1, General Information) for instructions on comPleting paper claims.

Ouþatient claims must have the appropriate revenue code and, if appropriate, thè corresponding

HCPCS code or narrative description. The prior authorization number must appear on the UB-04 CMS-

1450 claim in Block 63 and in Block 23 of the CMS-1500 claim. The certifìcation dates or the revised

request date on the POC must coincide with the DOS on the claim. Prior authorization does not waive

the 95-day filing deadline requirement.

2.4.1.1 Benefìt Code

Home health DME providers must use benefìt code DM2 on all claims and authorization requests. All

other providers must use benefìt code CSN on all claims and authorization requests'

2.4.2 Reimbursement

DME and expendable medical supplies are reimbursed in accordance with I TAC 5355'8021. Providers

can refer to the Online Fee Lookup (OFL) or the applicable fee schedule on the TMHP website at

www.tmhp.com. Providers may also request a hard copy of the fee schedule by contacting the TMHP

Contact Center at L -800 -925 -9126'

DME and expendable supplies, other than nutritional products, that have no established fee, are subject

to manual pricing at the documented MSRP less 18 percent or the provider's documented invoice cost.

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CPT ONLY . COPYzuGHT 20I I AMERTCÂN MEDICÂL ASSOCIATION, ALL R¡CHTS RESERVED.

Appendix - 14

DURABLE MEDICAL EQUIPMENT, MEDICAL SUPPLIES, AND NUTRITIONAL PRODUCTS FI,ANDBOOK

Nutritional products that have no established fee are subject to manual pricing at the documented AWP

less 10.5 percent or at the provider's documented invoice cost.

For reimbursement, providers must note the following:

. Claims are approved or denied according to the eligibilily, prior authorization status, and medical

appropriateness.

. Claims must represent a numerical quantity of I month for supplies according to the billing

requirements.

. DME/supplies mustbe provided by either a Medicaid enrolled home health agency's

Medicaid/DME supply provider or an independently-enrolled Medicaid/DME supply provider,

Both must enroll and bill using the provider identifier enrolled as a DME supplier. File these services

on a CMS-I500 claim form,

Note: Medical social services and speech-language pathologl services are available to clients who

are 20 yeørs of age and younger ønd are not ø benefit of Home Health Services. These services

may be considered ø benefít for clients who quølify for CCP.

Texas Medicaid does not reimburse separately for associated DME charges, including but not limited to,

battery disposal fees or state taxes. Reimbursement for any associated charges is included in the

reimbursement for a specifìc piece of equipment.

Refer to: Subsection 2.2,"Fee-for-Service Reimbursement Methodology" in Section 2, "Texas

Medicaid Fee-for-Service Reimbursement" (Vol, 7, General lnformation) for more infor-

mation about reimbursement.

Texas Medicaid implemented mandated rate reductions for certain services. The Online Fee Lookup

(OFL) and static fee schedules include a column titled "Adjusted Fee" to display the individual fees with

all mandated percentage reductions applied. Additional information about rate changes is available on

the TMHP website at www.tmhp.com/pages/topics/rates.aspx.

2.4.3 Prohibition of Medicaid Payment to Home Health Agencies Based on

Ownership

Medicaid denies home health services claims when TMHP records indicate that the physician ordering

treatment has a significant ownership interest in, or a significant fìnancial or contractual relationship

with, the nongovernmental home health agency billing for the services. Federal regulation Title 42 CFR

5424.22 (d) states that "a physician who has a significant financial or contractual relationship with, or a

significant ownership in a nongovernmental home health agency may not certiff or recertifr the need

for home health services care seryices and may not establish or review a plan of treatment."

A physician is considered to have a significant ownership interest in a home health agency if either of

the following conditions appl¡

. The physician has a direct or indirect ownership of fìve percent or more in the capital, stock, or

profits of the home health agency.

. The physician has an ownership of five percent or more of any mortgage, deed of trust, or other

obligation that is secured by the agency, if that interest equals five percent or more of the agency's

assets,

A physician is considered to have a significant financial or contractual relationship with a home health

agency if any of the following conditions apply:

. The physician receives any compensation as an oftìcer or director of the home health agency.

. The physician has indirect business transactions, such as contracts, agreements, purchase orders, or

leases to obtain services, supplies, equipment, space, and salaried employment with the home health

agencY.

DM-t27

CPT ONLY . COPYRICHT 20II AMERICAN MEDICAL ASSOCIAT¡ON. ALL RICHTS RESERVED.

Appendix - 14