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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules say to qualify for home health services, the patient must be: 
 
1. Confined to the home;  
2. Under the care of a physician or allowed practitioner;  
3. Receiving services under a plan of care established and reviewed by a physician;  
4. Be in need of (a) skilled nursing care on an intermittent basis, (b) physical therapy, (c) speech therapy or (d) 
continuing occupational therapy.  
You can find this rule at 42 CFR Section 409.42. 
 
The rules say that eligibility for the home health benefit will be determined based on the certifying physician or 
allowed practitioners records. If the enrollee was directly admitted to home health from an acute or post-acute 
care facility, the facility records may be used instead. The medical records for the enrollee must contain 
information that justifies the referral for home health services. 
  
The certifying physician or allowed practitioner must document that there was a face-to-face encounter with the 
enrollee within the required timeframe. The records must contain the actual clinical note for the face-to-face 
encounter visit. You can find these rules in the Centers for Medicare and Medicaid Services, Internet Only 
Manual, Medicare Benefit Policy Manual, Publication 100-02, Chapter 7, Section 30.5.1, 30.5.1.1, and 
30.5.1.2. 
 
The rules say that observation and assessment of the patients condition by a nurse are reasonable and 
necessary skilled services where there is a reasonable potential for change in a patients condition that requires 
skilled nursing personnel to identify and evaluate the patients need for possible modification of treatment or 5. 
JUSTIFICATION initiation of additional medical procedures until the patients clinical condition and/or 
treatment regimen has stabilized. Where a patient was admitted to home health care for skilled observation 
because there was a reasonable potential of a complication or further acute episode, but did not develop a 
further acute episode or complication, the skilled observation services are still covered for 3 weeks or so long as there remains a reasonable potential for such a complication or further acute episode. Information from the 
patients home health record must document the rationale that demonstrates that there is a reasonable potential 
for a future complication or acute episode and, therefore, may justify the need for continued skilled observation 
and assessment beyond the 3-week period. Such signs and symptoms as abnormal/fluctuating vital signs, 
weight changes, edema, symptoms of drug toxicity, abnormal/fluctuating lab values, and respiratory changes 
on auscultation may justify skilled observation and assessment. Where these signs and symptoms are such that 
there is a reasonable potential that skilled observation and assessment by a licensed nurse will result in changes 
to the treatment of the patient, then the services would be covered. However, observation and assessment by a 
nurse is not reasonable and necessary for the treatment of the illness or injury where fluctuating signs and 
symptoms are part of a longstanding pattern of the patients condition which has not previously required a 
change in the prescribed treatment. You can find this information in the Medicare Claims Processing Manual 
Chapter 7 40.1.2.1 Observation and Assessment of the Patients Condition When Only the Specialized Skills of 
a Medical Professional Can Determine Patients Status. 
 
The rules say that the following case-mix variables are obtained from home health claims: admission source, 
timing, clinical group, comorbidity adjustment, and functional impairment level. The clinical group is 
determined by the principal diagnosis reported on the home health claim; 30-day periods are assigned to one of 
12 clinical groups describing the primary reason for the home health encounter. Each 30-day period is assigned 
into one of 432 case-mix groups based on the variable described above. Each groups case-mix weight reflects 
the predicted mean cost of the group relative to the overall average across all group. You can find this 
information in the Medicare Benefit Policy Manual Chapter 7 10.2; Adjustment to the 30-Day Period Payment 
Rate. 
 
The rules say that case-mix weights are generated for each of the different PDGM payment groups per five 
categories timing, admission source, clinical grouping, functional impairment level, and comorbidity 
adjustment on which the payment is based. You can find this information in the Federal Register Final Rule 
Vol. 84, No. 217 dated November 8, 2019, implementation of the Patient Driven Grouping Model for calendar 
year 2020. 
 
The rules say that comprehensive assessment of patients each patient must receive, and an HHA (Home Health 
Agency) must provide, a patient-specific, comprehensive assessment. For Medicare beneficiaries, the HHA 
must verify the patients eligibility for the Medicare home health benefit including homebound status, both at 
the time of the initial assessment visit and at the time of the comprehensive assessment. (c) Standard: Content 
of the comprehensive assessment. The comprehensive assessment must accurately reflect the patients status, 
and must include, at a minimum, the following information: (3) the patients continuing need for home care. 
You can find this information in per Medicare's 42 Code of Federal Regulations (CFR) 484.55 Conditions of 
Participation. 
 
The rules say that if all other eligibility and coverage requirements under the home health benefit are met, 
skilled nursing services are covered when an individualized assessment of the patients clinical condition 
demonstrates that the specialized judgment, knowledge, and skills of a registered nurse, or when provided by 
regulation, a licensed practical (vocational) nurse (skilled care) are necessary. Skilled nursing services are 
covered where such skilled nursing services are necessary to maintain the patients current condition or prevent 
or slow further deterioration so long as the beneficiary requires skilled care for the services to be safely and 
effectively provided. When, however, the individualized assessment does not demonstrate such a necessity for 
skilled care, including when the services needed do not require skilled nursing care because they could safely 
and effectively be performed by the patient or unskilled caregivers, such services will not be covered under the 
home health benefit. A patients overall medical condition, without regard to whether the illness or injury is 
acute, chronic, terminal, or expected to extend over a long period of time, should be considered in deciding 
whether skilled services are needed. A Patients diagnosis should never be the sole factor in deciding that a 
service the patient needs is either skilled or not skilled. Skilled care may, depending on the unique condition of 
the patient, continue to be necessary for patients whose condition is stable. As is outlined in home health regulations, as part of the HHA Conditions of Participation, the clinical record of the patient must contain 
progress and clinical notes. You can find this information in the Medicare Claims Processing Manual Chapter 7 
40.1.1 General Principles Governing Reasonable and Necessary Skilled Nursing Care. 
 
The rules say that instructions specify that for each claim, HHAs are required to report all services provided to 
the beneficiary during each 30-day period, which includes reporting each visit in line-item detail. As such, it is 
expected that the home health records for every visit will reflect the need for the skilled medical care provided. 
These clinical notes are also expected to provide important communication among all member of the home care 
team regarding the development, course and outcomes of the skilled observations, assessments, treatment and 
training performed. Taken as a whole then, the clinical notes are expected to tell the story of the patients 
achievement towards his/her goals as outlined in the Plan of Care. In this way, the notes will serve to 
demonstrate why a skilled service is needed. You can find this information in Pub. 100-04 Medicare Claims 
Processing Manual, Chapter 10 Home Health Agency Billing. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.