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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 state that a case-mix methodology adjusts the 30-day payment rate based on characteristics of the 
patient and his/her corresponding resource needs. The 30-day period payment rate is adjusted by a case-mix 
methodology based on information from home health claims, other Medicare claims, and data elements from 
the Outcome and Assessment Information Set (OASIS). The claims information and OASIS data elements are 
used to group 30-day periods of care into their case mix groups. The following case-mix variables are obtained 
from home health or other Medicare claims: 
-Admission Source - Institutional admission source (i.e., acute hospital, inpatient rehabilitation facility, skilled 
nursing facility, long-term care hospital, inpatient psychiatric facility) or community. 
-Timing - Early episode timing (the first 30 day period of care) or Late (all subsequent 30 day periods of care, 
unless there is a gap of more than 60 days between the end of one period of care and the start of another). 
-Clinical Group  As determined by the principal diagnosis reported on home health claims: 30- day periods 
are assigned to one of 12 clinical groups describing the primary reason for the home health encounter. 
-Comorbidity Adjustment  As determined by certain secondary diagnoses reported on home health claims; a 
30-day period of care can receive no comorbidity adjustment, a low comorbidity adjustment, or a high 
comorbidity adjustment. 
 
The following case-mix variable is determined from responses to certain items on the OASIS assessment: 
-Functional Impairment Level  As determined by responses to certain OASIS items. A 30-day period of care 
can be assigned a low, medium, or high functional impairment level. Each 30-day period is assigned into one 
of 432 case-mix groups based on the variables described above. Each groups case-mix weight reflects the 
predicted mean cost of the group relative to the overall average across all groups. 
 
 
 HRGs and HIPPS Codes, Under the home health prospective payment system as refined by the Patient-Driven 
Grouping Model, a case-mix adjusted payment for a 30-day period of care is made using one of 432 HHRGs. 
On Medicare claims, these HHRGs are represented as Health Insurance Prospective Payment System (HIPPS) 
codes. 
 
You can find this rule in the Centers for Medicare & Medicaid Services, Internet-Only Manual, Publication 
100-02, Medicare Benefit Policy Manual, Chapter 7, Section 10.2. 
 
The rules say that the Home Health Resource Group (HHRG) used to pay home health services are determined 
by the HH Grouper program. HHRGs are represented on claims in the form of Health Insurance Prospective 
Payment System (HIPPS) codes. The home health agency sends a HIPPS code on the claim, using revenue 
code 0023. Medicare systems combine claim data and OASIS data and send the data to the HH Grouper to 
determine the HIPPS code used for payment. You can find this information in the Centers for Medicare & 
Medicaid Services, Publication 100-04, Medicare Claims Processing Manual, Chapter 10, Section 80. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.