Texas Health and Human Services Commission v. Linda Puglisi ( 2015 )

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- lnf527 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