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From Health Law Daily, April 06, 2018

Targeted enforcement discretion offered for face-to-face home health requirements

By Harold Bishop, J.D.

CMS announced that it intends to exercise targeted enforcement discretion in working with states to achieve compliance with provisions of the 2016 Medicaid Home Health (HH) Final rule (81 FR 5529). CMS recognizes that there may continue to be state-specific administrative challenges associated with implementing certain provisions of the final rule and that there is some confusion surrounding state compliance deadlines. The use of this targeted enforcement discretion will be applied by CMS on a case-by-case basis depending on state-specific facts and circumstances and focused on states’ specific needs (CMS Letter, April 5, 2018).

The 2016 Final rule. CMS finalized HH regulations requiring physicians to document the occurrence of a face-to-face encounters with Medicaid eligible beneficiaries within reasonable timeframes when ordering HH services (see CMS aligns Medicaid face-to-face home health encounter rules with Medicare, January 28, 2016). This Final rule:

  • aligned the timeframes for Medicaid HH face-to-face encounters with existing Medicare rules for HH services;
  • aligned Medicaid HH requirements with Medicare rules by allowing certain authorized non-physician providers (NPPs) to document the face-to-face encounter for HH services and for medical equipment;
  • clarified that Medicaid HH services and items are not limited to home settings; and
  • made additional changes to the requirements for coverage of medical supplies, equipment and appliances under the HH benefit.

The provisions of the Final rule were effective July 1, 2016. However, because CMS recognized that states may experience operational and budgetary implications as they implement certain provisions, CMS delayed compliance with the Final rule for up to two years from the effective date, based on state legislative cycles.

Statutory basis for the rule. Section 6407 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) amended the Social Security Act to create new Medicare requirements for face-to-face encounters to support claims for HH services, and for durable medical equipment (DME). These requirements were also made applicable to Medicaid.

Implementation of targeted enforcement discretion. To qualify for this targeted enforcement discretion, states will need to identify the provisions of the 2016 HH final rule that they are unable to implement by the required date based on their legislative timeframes. CMS will work with states on assessing compliance with specific 2016 Final rule provisions.

No flexibility for certain provisions. Despite this targeted enforcement discretion, CMS will not permit flexibility for the following provisions in the 2016 Final rule that codify longstanding Medicaid HH policy:

  1. The prohibition on requiring that the availability of all HH service is contingent upon the individual needing nursing or therapy services (42 C.F.R. sec. 440.70(b)).
  2. The requirements found at 42 C.F.R. sec. 440.70(b)(3)(v) implementing the ruling of the U.S. Court of Appeals for the Second Circuit in DeSario v. Thomas, 139 F. 3d 80 (1998). Specifically, a state may develop a list of pre-approved items of medical equipment as an administrative convenience, but must provide individuals with a reasonable and meaningful procedure for requesting items that do not appear on such a list.
  3. The homebound prohibition on Medicaid HH services and settings in which individuals can receive Medicaid home health services (42 C.F.R. sec. 440.70(c)(1).

States, however, will continue to have flexibility to establish a reasonable service definition as long as that definition is consistent with the federal regulatory framework.

States requiring assistance should contact CMS by May 31, 2018 so that compliance can be assessed and any necessary flexibility can be granted prior to July 1, 2018. Questions or requests for technical assistance should be emailed to

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