The Case for Aligning Medicare and Medicaid Home Health Benefits

Medicare rules limiting home health should be relaxed and brought more into line with Medicaid for the most costly patient population, according to the Bipartisan Policy Center (BPC).

In fact, the oversight of programs serving dual-eligible beneficiaries within the Centers for Medicare & Medicaid Services (CMS) should be aligned, according to the “Delivery System Reform: Improving Care for Individuals Dually Eligible for Medicare and Medicaid” report recently published by the Washington, D.C.-based think tank.

For ongoing demonstrations, CMS should align coverage standards for Medicaid and Medicare benefits that overlap, including home health services and durable medical equipment (DME), the report says.


Differences in benefits between Medicaid and Medicare are widespread in therapy and rehabilitation services, which are offered in both home health and ambulatory settings, BPC notes.

“While Medicaid benefits in these areas tend to be more comprehensive, Medicare benefits can be limited,” the report says.

For example, the duration of rehabilitation and physical therapy services coverage under Medicare fee-for-service (FFS) is frequently limited by several factors related to FFS payment system rules, including the “homebound requirement” for coverage under the Medicare home health benefit, the manual claims review of necessity of outpatient physical therapy services higher than the annual dollar value “cap,” and recertification for home health episodes at the end of a 60-day therapy-based home health episode of care, the report says.


“Whether or not full integration of Medicare and Medicaid services will improve quality and lower the total cost of care for dual eligible beneficiaries will likely vary based on the care delivery model and state implementation, but there is potential for improved quality and greater value,” the report says.

RTI International’s recent study of the Minnesota Senior Health Options program showed that from 2010 to 2012, the program achieved a 48% drop in inpatient hospitalizations and a 26% drop in the total number of hospital stays for patients who were hospitalized during the year, BPC notes. Additionally, the program was successful in increasing the use of home- and community-based long-term support services (LTSS) and reducing emergency department visits.

“While federal and state policymakers, health plans, and providers have much to learn about the delivery and integration of clinical health services, behavioral health services, and LTSS, evidence suggests that potential for improving quality, value, and patient satisfaction warrants continuing efforts to better integrate these services,” the report says.

In the report, BPC specifically recommends making changes to existing reimbursement structures, consolidating regulatory authority for duals programs within the Medicare-Medicaid Coordination Office at CMS, and building on lessons learned through implementation of existing demonstrations and programs to develop a consolidated framework for programs that serve dual-eligible beneficiaries. The ability to combine Medicaid and Medicare financing streams into an integrated benefit structure that enables flexibility in benefit design to address patient needs is critical to that framework, the report says.

“Ultimately, delivery system reform presents the opportunity to better integrate Medicare and Medicaid services in a way that improves quality and access to services, while also presenting opportunities to begin to address social determinants of health,” the report says.

Written by Mary Kate Nelson

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