Medicaid Program; Coverage of Personal Care Services

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 440

[MB-071-P]

RIN 0938-AG36

Medicaid Program; Coverage of Personal Care Services

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

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SUMMARY: In accordance with the provisions of section 13601(a)(5) of

the Omnibus Budget Reconciliation Act of 1993, which added section

1905(a)(24) to the Social Security Act, this proposed rule would

specify the revised requirements for Medicaid coverage of personal care

services furnished in a home or other location as an optional benefit,

effective for services furnished on or after October 1, 1994. In

particular, this proposed rule would specify that personal care

services may be furnished in a home or other location by any individual

who is qualified to do so. Additionally, we are proposing two minor

changes to the Medicaid regulations concerning home health services.

DATES: Comments will be considered if we receive them at the

appropriate address, as provided below, no later than 5 p.m. on May 7,

1996.

ADDRESSES: Mail written comments (one original and three copies) to the

following address: Health Care Financing Administration, Department of

Health and Human Services, Attention: MB-071-P, P.O. Box 7517-0517,

Baltimore, MD 21207.

If you prefer, you may deliver your written comments (one original

and three copies) to one of the following addresses: Room 309-G, Hubert

H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC

20201, or Room No. C5-11-17, 7500 Security Boulevard, Baltimore, MD

21244-1850.

Because of staffing and resource limitations, we cannot accept

comments by facsimile (FAX) transmission. In commenting, please refer

to file code MB-071-P. Comments received timely will be available for

public inspection as they are received, generally beginning

approximately 3 weeks after publication of a document, in Room 309-G of

the Department's offices at 200 Independence Avenue SW., Washington,

DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.

(phone: (202) 690-7890).

FOR FURTHER INFORMATION CONTACT: Terese Klitenic (410) 786-5942.

SUPPLEMENTARY INFORMATION:

I. Background

Title XIX of the Social Security Act (the Act) authorizes grants to

States for medical assistance (Medicaid) to certain individuals whose

income and resources are insufficient to meet the cost of necessary

medical care. The Medicaid program is jointly financed by the Federal

and State governments and administered by the States. Within Federal

rules, each State chooses eligible groups, types and ranges of

services, payment levels for most services, and administrative and

operating procedures. The nature and scope of a State's Medicaid

program is described in the State plan that the State submits to HCFA

for approval. The plan is amended whenever necessary to reflect changes

in Federal or State law, changes in policy, or court decisions.

Under section 1902(a)(10) of the Act, States must provide certain

basic services. Section 1905(a) of the Act defines the services States

may provide as medical assistance. Personal care services historically

have been permitted under the Secretary's discretionary authority under

current section 1905(a)(25) of the Act until the enactment of

legislation, described below. Currently, regulations concerning

personal care services are located at 42 CFR 440.170(f).

II. Legislation Concerning Personal Care Services

Before the enactment of the legislation discussed below, a State

had the option to elect to cover personal care services under its

Medicaid State plan. Although not specifically mentioned in section

1905(a) of the Act, personal care services could be covered under

section 1905(a)(22) of the Act (redesignated as section 1905(a)(25) of

the Act on November 5, 1990), under which a State may furnish any

additional services specified by the Secretary and recognized under

State law. In Sec. 440.170(f), the Secretary specified that personal

care services may be covered.

Section 4721 of the Omnibus Budget Reconciliation Act of 1990 (OBRA

'90) (Pub. L. 101-508, enacted on November 5, 1990) amended section

1905(a)(7) of the Act to include personal care services as part of the

home health services benefit and to impose certain conditions on the

provision of personal care services, effective for services furnished

on or after October 1, 1994. This amendment would have had a

significant effect since, under section 1902(a)(10)(D) of the Act, home

health services are a mandatory benefit for all Medicaid recipients

eligible for nursing facility services under the State plan. Thus, had

section 1905(a)(7) of the Act not been further amended (as discussed

below) before the effective date of section 4721 of OBRA '90, personal

care services would have become a mandatory benefit for all recipients

eligible for nursing facility services, effective October 1, 1994.

Before the provisions of OBRA '90 became effective, the Omnibus

Budget Reconciliation Act of 1993 (OBRA '93) (Pub. L. 103-66) was

enacted on August 10, 1993. Section 13601(a)(1) of OBRA '93 amended

section 1905(a)(7) of the Act to remove personal care services from the

definition of home health services. Additionally, section 13601(a)(5)

of OBRA '93 added a new paragraph (24) to section 1905(a) of the Act,

to include payment for personal care services under the definition of

medical assistance. Under section 1905(a)(24) of the Act, personal care

services furnished to an individual who is not an inpatient or resident

of a hospital, nursing facility, intermediate care facility for the

mentally retarded, or institution for mental disease is an optional

benefit for which States may provide medical assistance payments.

[[Page 9406]]

The statute specifies that personal care services must be: (1)

Authorized for an individual by a physician in accordance with a plan

of treatment or (at the option of the State) otherwise authorized for

the individual in accordance with a service plan approved by the State;

(2) provided by an individual who is qualified to provide such services

and who is not a member of the individual's family; and (3) furnished

in a home or other location. This amendment is effective October 1,

1994. Therefore, as a result of the legislative changes made by OBRA

'93, personal care services continue to be an optional State plan

benefit, and are now authorized under section 1905(a)(24) of the Act,

effective for services furnished on or after October 1, 1994.

III. Provisions of the Proposed Regulations

A. Personal Care Services in a Home or Other Location (Sec. 440.167)

As historically used in the Medicaid program, personal care

services means services related to a patient's physical requirements,

such as assistance with eating, bathing, dressing, personal hygiene,

activities of daily living, bladder and bowel requirements, and taking

medications. These services primarily involve ``hands on'' assistance

by a personal care attendant with a recipient's physical dependency

needs (as opposed to purely housekeeping services). These tasks are

similar to those that would normally be performed by a nurse's aide if

the recipient were in a hospital or nursing facility. Although personal

care services may be similar to or overlap some services furnished by

home health aides, skilled services that may be performed only by a

health professional are not considered personal care services.

Alternatively, services that require a lower level of skill such as

personal care services may also be provided by home health aides in the

home under the home health benefit.

The above description of personal care services is based on the

definition of personal care services originally set forth in Part 5,

Section 140, of the Medical Assistance Manual (the precursor of the

State Medicaid Manual) and reflects States' experiences in providing

these services. We plan to publish a definition of personal care

services in the State Medicaid Manual in the near future. Until that

time, States should use the above description of personal care services

as a guide in setting parameters for this optional benefit. To provide

States with maximum flexibility in providing personal care services, we

are providing guidelines for this benefit in a manual issuance, rather

than codifying it in the regulations.

Currently, provisions regarding personal care services in a

recipient's home are set forth at Sec. 440.170. This section of the

regulations defines the additional services that States may furnish as

any other medical care or remedial care recognized under State law and

specified by the Secretary. Under Sec. 440.170(f), personal care

services in a recipient's home means services prescribed by a physician

in accordance with the recipient's plan of treatment, and furnished by

an individual who is (1) qualified to provide the services, (2)

supervised by a registered nurse, and (3) not a member of the

recipient's family. The existing regulations do not provide for

personal care services furnished in settings other than the recipient's

home.

To conform the regulations to the provisions of section 1905(a)(24)

of the Act (as added by section 13601(a)(5) of OBRA '93), we propose to

add a new Sec. 440.167, ``Personal care services in a home or other

location.'' We would specify that personal care services are services

furnished to an individual who is not an inpatient or resident of a

hospital, nursing facility, intermediate care facility for the mentally

retarded, or institution for mental disease, that are: (1) authorized

for the individual by a physician in accordance with a plan of

treatment or (at the option of the State) otherwise authorized for the

individual in accordance with a service plan approved by the State; (2)

provided by an individual who is qualified to provide such services and

who is not a member of the individual's family; and (3) furnished in a

home, and if the State chooses, in another location.

Since section 1905(a)(24) of the Act does not require that the

services be supervised by a registered nurse, we would not require such

supervision in proposed Sec. 440.167. While section 13601(a)(1) of OBRA

'93 eliminated the statutory requirement for supervision by a

registered nurse, the versions of the bill passed by both the House and

Senate (H.R. 2264) contained this requirement. The nurse supervision

requirement was apparently dropped while the bill was in conference;

however, the conference report does not specifically refer to this

change (H. Conf. Rept. No. 2133, 103rd Cong., 1st sess., page 833,

(1993)). We believe our proposal reflects statutory intent to eliminate

the requirement for such supervision. Moreover, since extensive medical

knowledge or technical skill is not required to provide personal care

services, we believe that supervision by a registered nurse is not

necessary in most cases. However, we are soliciting public comments

concerning the need to retain the requirement that personal care

services be provided under the supervision of a registered nurse or

another supervisory individual, such as a medical social worker.

Under our proposal, States that elect to offer the personal care

services benefit must cover personal care services provided in the home

but may also choose to cover personal care services provided in other

locations. We believe that this proposal is consistent with the intent

of the statute to expand the possible settings where personal care

services may be covered under the Medicaid program. We note that

coverage of personal care services outside the home is not optional

with respect to those individuals who require personal care services

that are medically necessary to correct or ameliorate conditions

discovered as a result of a screen performed under the Early and

Periodic Screening, Diagnostic, and Treatment (EPSDT) program.

We also considered two other options for implementing the provision

of OBRA '93 that allows States to cover personal care services

furnished outside the home. One option was to require States that elect

to offer the personal care services benefit to cover such services in

both the home and other locations. However, section 1905(a)(24)(C) of

the Act refers to services ``furnished in a home or other location,''

and we believe that this option would unnecessarily limit States'

flexibility in implementing the personal care services benefit.

Moreover, it could work against the best interests of recipients if

States choose not to offer the personal care services benefit at all

because of the expense involved in covering the services both inside

and outside the home.

We also considered allowing States electing to offer this benefit

to cover the services either in the home or in other locations. Since

many States historically have covered these services when furnished in

the recipient's home, we do not believe that it would be consistent

with statutory intent to allow States to choose to cover personal care

services only in locations other than the home. That is, States that

have previously covered personal care services furnished in the home

should not be allowed to eliminate this location and opt to cover the

services only when provided outside of the home. Again, we believe that

the purpose of section 1905(a)(24) of the Act is to add to the possible

settings where

[[Page 9407]]

States may provide personal care services, not to decrease the amount

of services currently being offered. Thus, we believe that our proposed

policy is the most appropriate interpretation of the statute, is in the

best interest of recipients, and gives States the discretion necessary

to operate their programs in an efficient manner.

We propose to leave to the State's option the decision of whether

personal care services are to be authorized by a physician in

accordance with a plan of treatment, or otherwise authorized in

accordance with a service plan approved by the State. Similarly, we

would permit States to determine, through development of provider

qualifications, which individuals are qualified to provide personal

care services (other than family members). Again, we believe that these

proposed provisions would allow States to maintain a high level of

flexibility in providing and defining optional personal care services.

We note that home health aides employed by home health agencies may

sometimes provide personal care services. Home health aides that

provide only personal care services under Medicaid need only meet the

qualifications set forth at Sec. 484.36(e) (and not the other

qualifications for home health aide services).

Section 1905(a)(24)(B) of the Act specifies that, for Medicaid

purposes, personal care services may not be furnished by a member of

the individual's family. To date, we have not defined ``family member''

for purposes of the personal care services benefit. Thus, each State

that offers this benefit makes its own determination as to who is

considered a family member for purposes of personal care services. To

provide for more clarity and consistency in this regard, we propose to

define family members under new Sec. 440.167(b) as spouses of

recipients and parents (or step-parents) of minor recipients. This

definition is essentially identical to the one that applies to personal

care services provided under a home and community-based waiver (see

section 4442.3.B.1. of the State Medicaid Manual). We believe that

spouses and parents are inherently responsible for meeting the personal

care needs of their family members, and, therefore, it would not be

appropriate to allow Medicaid reimbursement for such services. States

would continue to have the flexibility to expand upon the definition of

family members at Sec. 440.167. That is, States could further restrict

which family members can qualify as providers by extending the

definition to apply to family members other than spouses and parents.

We note that our proposed definition of family member would only

apply for purposes of the personal care services benefit in

Sec. 440.167 and not for other Medicaid benefits that allow

reimbursement for family members. Because we recognize that States have

developed their own definitions of ``family members'' for purposes of

the personal care services benefit, we welcome comments on our proposed

definition.

Since personal care services are now an optional benefit under

section 1905(a)(24) of the Act, we would remove current

Sec. 440.170(f), which provides for coverage of personal care services

in a recipient's home as part of any other medical care or remedial

care recognized under State law and specified by the Secretary.

B. Proposed Changes Concerning Home Health Services (Sec. 440.70)

We are proposing several changes to the regulations concerning home

health services. Currently, Sec. 440.70(a)(2) provides that home health

services must be furnished to a recipient on his or her physician's

orders as part of a written plan of care that the physician reviews

every 60 days. Section 440.70(b) lists the services that constitute

home health services and thus are subject to the plan of care

requirements. Section 440.70(b)(3) specifies that these services

include medical supplies, equipment, and appliances suitable for use in

the home. We have found that in many cases, once a recipient's need for

medical supplies, equipment, and appliances is indicated by a

physician, that need is unlikely to change within 60 days. Thus, absent

changes in a recipient's condition, we do not believe that a

recipient's need for medical equipment necessitates routine inclusion

in a plan of care reviewed every 60 days by a physician.

Modification of the plan of care and physician review requirements

for medical equipment would decrease physicians' paperwork burden as

well as the time and costs involved with these requirements.

Accordingly, we would revise Sec. 440.70(b)(3) to provide that

physician review of a recipient's need for medical supplies, equipment,

and appliances suitable for use in the home under the home health

benefit would be required annually. We believe that the requirement for

annual review of medical supplies and equipment would allow States

flexibility in furnishing home health services while providing an

appropriate level of oversight. Frequency of further review of a

recipient's continuing need for the equipment on other than an annual

basis would be determined on a case-by-case basis depending on the

nature of the item prescribed. A recipient's need for supplies or

pieces of equipment that generally tend to be used on a long-term basis

would not be reviewed as frequently as equipment that is usually used

only temporarily. For example, review of the need for a wheelchair need

not be as frequent as review of the need for an oxygen concentrator. In

all cases, a physician's order for the equipment would be required

initially.

Additionally, Sec. 440.70(d) now defines a home health agency for

purposes of Medicaid reimbursement as a public or private agency or

organization, or part of an agency or organization, that meets

requirements for participation in Medicare. We propose to revise this

definition to indicate that in order to participate in Medicaid, the

agency must meet Medicare requirements for participation as well as any

additional standards the State may wish to apply that are not in

conflict with Federal requirements. This proposed change reflects the

long standing principle in the Medicaid program that affords States

flexibility in establishing Medicaid program requirements tailored to

their own specific needs. Under this proposal a State would have the

option of imposing additional standards on home health agencies for

participation in Medicaid beyond the Medicare conditions of

participation.

Finally, we are making a technical change to Sec. 440.70(c) to

remove an obsolete reference to subparts F and G of part 442.

IV. Impact Statement

A. Background

For proposed rules such as this, we generally prepare a regulatory

flexibility analysis that is consistent with the Regulatory Flexibility

Act (RFA) (5 U.S.C. 601 through 612), unless we certify that a proposed

rule will not have a significant economic impact on a substantial

number of small entities. For purposes of a RFA, States and individuals

are not considered small entities. However, providers are considered

small entities.

In addition, section 1102(b) of the Act requires us to prepare a

regulatory impact analysis for any proposed rule that may have a

significant impact on the operation of a substantial number of small

rural hospitals. Such an analysis must conform to the provisions of

section 604 of the RFA. For purposes of section 1102(b) of the Act, we

define a small rural hospital as a hospital that is located outside of

a Metropolitan

[[Page 9408]]

Statistical Area and has fewer than 50 beds.

We are not preparing a rural impact statement since we have

determined, and we certify, that this proposed rule would not have a

significant impact on the operations of a substantial number of small

rural hospitals.

In accordance with the provisions of section 1905(a)(24) of the

Act, this proposed regulation would revise the regulations to

incorporate the new statutory requirements concerning personal care

services. In accordance with the statute, we are proposing that the

services must be: (1) Authorized for the individual by a physician in

accordance with a plan of treatment or (at the option of the State)

otherwise authorized for the individual in accordance with a service

plan approved by the State; (2) provided by an individual who is

qualified to provide such services and who is not a member of the

individual's family; and (3) furnished in a home or other location.

In general, the provisions of this proposed rule are prescribed by

section 1905(a)(24) of the Act, as added by section 13601(a)(5) of OBRA

'93. The most significant change required under the statute is that, as

of October 1, 1994, the settings in which States may elect to cover

personal care services have been expanded to include locations outside

the home. We believe that this statutory provision will increase

Medicaid program expenditures independently of the promulgation of this

rule. The primary discretionary aspect of this rule is our proposal

that States electing to offer the personal care services benefit must

cover the services in the home and may choose to cover them in any

other location. As discussed in section III.A of this preamble, we

considered requiring States that elect to offer the personal care

services benefit to cover such services in both the home and other

locations. We also considered allowing States to cover the services

either in the home or in other locations. However, we believe that our

proposed policy is the most appropriate interpretation of the statute

and gives States the discretion necessary to operate their programs in

an efficient manner and in the best interest of their recipients.

As noted above, the major provisions of this proposed rule are

required by the statute. Thus, costs associated with these proposed

regulations are the result of legislation. However, to the extent that

a legislative provision being implemented through rulemaking may have a

significant effect on recipients or providers or may be viewed as

controversial, we believe that we should address any potential

concerns. In this instance, we believe it is desirable to inform the

public of our estimate of the substantial budgetary effect of these

statutory changes. The statutorily driven costs have been included in

the Medicaid budget baseline. In addition, we anticipate that a large

number of Medicaid recipients and providers, particularly home health

agencies, will be affected. Thus, the expansion of settings where

personal care services may be furnished represents an expansion of

Medicaid benefits that, if exercised by States, would likely have

significant effects, particularly on Medicaid recipients.

B. Impact of New Personal Care Services Provision

1. Overview

This analysis addresses a wide range of costs and benefits of this

rule. Whenever possible, we express impact quantitatively. In cases

where quantitative approaches are not feasible, we present our best

examination of determinable costs, benefits and associated issues.

It is difficult to predict the economic impact of expanding the

settings where personal care services may be covered under Medicaid to

locations outside the home. We do not know the exact number and type of

personal care services furnished by individual States or how much these

services currently cost. Currently, approximately 32 States offer

coverage for personal care services, and we do not have cost data from

all of those States. States also differ in their definitions of

personal care services and rules concerning who may furnish them. Since

we do not have a full picture of the scope or cost of the different

services, it is difficult for us to quantify the impact these changes

will have. Other unknown factors regarding the future provision of

personal care services include which States now offering the personal

care services benefit will choose to cover services furnished outside

the home, how many additional States will opt to offer coverage, how

many Medicaid recipients will elect to utilize these services in States

in which the services have not been covered, and the type and costs of

these specific services. We believe that the majority of those

individuals who qualify for these services will elect to utilize this

benefit. Thus, although costs to States will rise as they begin to pay

for the additional services, there would be substantial benefits to

some providers and to Medicaid recipients as described in detail below.

2. Effects Upon Medicaid Recipients

Permitting States that elect to offer the personal care services

benefit the option of covering these services in locations outside the

home will have a positive effect on recipients. In States where

coverage has been provided only for personal care services in the home,

this proposed rule may expand the types of personal care services

available and/or the settings where recipients may receive these

services. Expansion of personal care services or settings could help

improve the quality of life for these recipients as well as for

recipients who have not been receiving personal care services. It also

would save money for some Medicaid recipients or their families since

they would no longer have to pay for these services. No data are

available on the number of recipients or family members who are

currently paying for these services. However, since only 32 States

currently pay for personal care services, we believe that a substantial

number of recipients who receive these services are paying for them out

of pocket.

3. Effects on Providers

By expanding the range of settings in which Medicaid will cover

personal care services, we anticipate that this proposed rule will

increase the demand for such services. We believe this effect will be

viewed as beneficial to providers of personal care services. If the

increase in demand for such services is sufficient, the number of

providers of personal care services may increase.

4. Effects on Medicaid Program Expenditures

This proposed rule would implement the provisions of section

1905(a)(24) of the Act by specifying that personal care services are an

optional State plan benefit under the Medicaid program. The proposed

rule would allow States the option to cover personal care services

furnished in a home or other location, effective for services furnished

on or after October 1, 1994. Table 1 below provides an estimate of the

anticipated additional Medicaid program expenditures associated with

furnishing these services outside the home, beginning on October 1,

1994. This estimate was made using various assumptions about increases

in utilization by current recipients, adjusted for age, as well as

assumptions about the induced utilization that would result from the

availability of these services. We have assumed a utilization increase

of 5 percent for the aged and 10 percent for the non-aged, and an

overall induction factor of 10 percent. We have

[[Page 9409]]

also assumed that the option of providing personal care services

outside the home would affect only those States that represent 33

percent of Medicaid personal care spending. Given these assumptions,

our estimate based on Federal budget projections is shown in Table 1,

which also provides a breakdown of these costs. The first row of

figures shows the costs of providing this optional State plan benefit.

The second row shows the administrative costs associated with

furnishing these services. We estimate the following costs to the

Medicaid program:

Table 1.--Personal Care Services Outside the Home

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Federal medicaid cost estimate (in millions)*

---------------------------------------------------

FY 1996 FY 1997 FY 1998 FY 1999

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Services.................................................... $230 $280 $350 $430

Administration costs........................................ 10 10 15 15

Total................................................. $240 $290 $365 $445

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*Figures are rounded to the nearest $5 million. We note that the costs associated with these proposed

regulations are the result of legislation and due to the interpretation of statutory changes already in

effect. Therefore, these costs have been included in the Medicaid budget estimates.

5. Effects on States

As stated above, the coverage of personal care services is optional

except when such services are medically necessary to correct or

ameliorate medical problems found as a result of a screen under the

EPSDT program. Many States currently do not cover optional personal

care services. In those States that do offer the personal care services

benefit, services furnished outside the home previously could not be

covered. Therefore, there may be a substantial economic impact on

States that decide to provide coverage for personal care services

furnished outside the home. The varying State definitions of personal

care services, and rules concerning who may furnish them, make it

difficult to estimate accurately the potential increases in

expenditures for those States that choose to expand coverage of

personal care services to include services furnished outside the home.

However, Table 2, which is based upon the same data and assumptions

used to formulate the Federal expenditures shown in Table 1, estimates

the cost to States.

Table 2.--Personal Care Services Outside the Home

----------------------------------------------------------------------------------------------------------------

State cost estimate (in millions)*

---------------------------------------------------

FY 1996 FY 1997 FY 1998 FY 1999

----------------------------------------------------------------------------------------------------------------

Services.................................................... $175 $210 $265 $325

Administration costs........................................ 5 10 10 10

---------------------------------------------------

Total................................................. 180 220 275 335

----------------------------------------------------------------------------------------------------------------

*Figures are rounded to the nearest $5 million.

C. Conclusion

The provisions of this proposed rule are required by section

1905(a)(24) of the Act. We believe that the provisions of this rule

adding personal care services as an optional State plan benefit and

expanding the possible settings for covering personal care services to

locations outside the home will benefit providers, recipients and their

families.

As shown above in Tables 1 and 2, the costs to the Federal

government and States associated with paying for personal care services

furnished outside the home are substantial. There may be some minor off

setting of costs if the number of admissions to nursing facilities

decreases as a result of these provisions, but we have no data to

determine the potential savings, if any. Regardless of any possible

savings, the economic impact of these provisions is attributable to the

statutory changes mandated by OBRA '93.

In accordance with the provisions of Executive Order 12866, this

proposed rule was reviewed by the Office of Management and Budget.

V. Collection of Information Requirements

This document does not impose information collection and

recordkeeping requirements. Consequently, it need not be reviewed by

the Office of Management and Budget under the authority of the

Paperwork Reduction Act of 1995.

VI. Response to Comments

Because of the large number of items of correspondence we normally

receive on a proposed rule, we are not able to acknowledge or respond

to them individually. We will consider all comments we receive by the

date and time specified in the DATES section of this preamble, and, if

we proceed with a final rule, we will respond to the comments in the

preamble to that document.

List of Subjects in 42 CFR Part 440

Grant programs-health, Medicaid.

42 CFR part 440 is proposed to be amended as set forth below:

PART 440--SERVICES: GENERAL PROVISIONS

1. The authority citation for part 440 continues to read as

follows:

Authority: Sec. 1102 of the Social Security Act (42 U.S.C.

1302).

Subpart A--Definitions

2. In Sec. 440.70, the introductory text of paragraph (a) and the

first sentence of the introductory text of paragraph (b) are

republished and paragraphs (a)(2), (b)(3), (c) and (d) are revised to

read as follows:

Sec. 440.70 Home health services.

(a) ``Home health services'' means the services in paragraph (b) of

this section that are provided to a recipient--

* * * * *

(2) On his or her physician's orders as part of a written plan of

care that the physician reviews every 60 days, except

[[Page 9410]]

as specified in paragraphs (b)(3) (i) and (ii) of this section.

(b) Home health services include the following services and items.

* * *

* * * * *

(3) Medical supplies, equipment, and appliances suitable for use in

the home.

(i) A recipient's need for medical supplies, equipment, and

appliances must be reviewed by a physician annually.

(ii) Frequency of further physician review of a recipient's

continuing need for the items is determined on a case-by-case basis,

based on the nature of the item prescribed;

* * * * *

(c) A recipient's place of residence, for home health services,

does not include a hospital, nursing facility, or intermediate care

facility for persons with mental retardation.

(d) ``Home health agency'' means a public or private agency or

organization, or part of an agency or organization that meets

requirements for participation in Medicare and any additional standards

legally promulgated by the State that are not in conflict with Federal

requirements.

* * * * *

3. A new Sec. 440.167 is added to read as follows:

Sec. 440.167 Personal care services

(a) Personal care services means services that are furnished to an

individual who is not an inpatient or resident of a hospital, nursing

facility, intermediate care facility for persons with mental

retardation, or institution for mental disease that are--

(1) Authorized for the individual by a physician in accordance with

a plan of treatment or (at the option of the State) otherwise

authorized for the individual in accordance with a service plan

approved by the State;

(2) Provided by an individual who is qualified to provide such

services and who is not a member of the individual's family; and

(3) Furnished in a home, and at the State's option, in another

location.

(b) For purposes of this section, family member means a parent (or

step parent) of a minor recipient or a recipient's spouse.

4. In Sec. 440.170, paragraph (f) is removed and reserved.

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical

Assistance Program)

Dated: October 6, 1995.

Bruce C. Vladeck,

Administrator, Health Care Financing Administration.

[FR Doc. 96-5511 Filed 3-7-96; 8:45 am]

BILLING CODE 4120-01-P