Department of Health & Human Services 
OFFICE OF 
   
INSPECTOR GENERAL 
 
 
 
 
 
 
 
M S P
EDICAID  ERVICES  ROVIDED 
 
IN AN   ADULT DAY HEALTH 
 
S  
ETTING
 
 
 
 
 
 
 
 
Daniel R. Levinson  
Inspector General 
 
July 2011 
OEI-09-07-00500    
  
   
I N TE RX OE DC UU CT TI IVOEN    S U M M A R Y  
OBJECTIVES
 
1.  To describe the types of services reimbursed by Medicaid adult day 
health programs in the 12 States that provide nursing- and  
therapy-focused adult day health services through a State plan 
benefit. 
2.  To determine whether nursing and therapy services are provided by 
staff who are qualified and/or supervised in accordance with State 
licensing requirements. 
3.  To determine whether beneficiary records contain required 
documentation. 
BACKGROUND 
Adult day health centers are organized outpatient programs that 
provide health, therapeutic, and social services and activities to 
program participants.  Federal and State reviews of Medicaid adult day 
health services have identified vulnerabilities with reimbursement 
systems and questionable billings.  The Centers for Medicare & 
Medicaid Services (CMS) and State Medicaid programs do not receive 
information about the individual services provided to beneficiaries in 
the 12 States included in our review because reimbursement is based on 
bundled payment rates.   
Within broad Federal Medicaid requirements, individual States 
establish the specific requirements that must be met for Medicaid 
reimbursement of adult day health services.  In general, adult day 
health services need to be (1) ordered or requested by a physician or 
other medical practitioner; (2) provided to eligible beneficiaries, as 
determined by a patient assessment; (3) included in or consistent with a 
plan of care; (4) rendered by staff whose qualifications and/or 
supervision meet State licensing requirements; and (5) supported by 
appropriate documentation.   
Using medical reviewers, we reviewed beneficiary and other facility 
records associated with a random sample of 300 adult day health service 
days from the last 6 months of 2007.  We focused on the 12 States that, 
as of December 31, 2007, provided nursing- and  therapy-focused adult 
day health services through a State plan benefit to primarily elderly or 
disabled individuals.     
 
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FINDINGS 
Beneficiaries received at least one health service on 60 percent of 
service days.  Nursing services, documented on 59 percent of service 
days, were the most commonly documented services.  Beneficiaries 
received therapy, primarily maintenance care, on approximately  
32 percent of service days.  On 40 percent of service days, beneficiaries 
received no documented health services, including 34 percent of service 
days on which meals and/or snacks were the only documented services.  
Most States do not require that beneficiaries receive a health service 
each day in an adult day health setting.  Section 1905(a) of the Social 
Security Act does not include adult day health services as a specific 
coverable State plan service and, therefore, no specific Federal 
requirement for health services exists. 
Approximately 43 percent of therapy services were provided by staff 
who lacked required supervision.  Of the documented physical 
therapy services, 54 percent did not have any documentation indicating 
that the appropriately qualified staff were available to supervise the 
service where required under State law and regulation.  Approximately 
32 percent of the documented occupational therapy services had no 
documentation that appropriately qualified staff were available to 
supervise the service in accordance with State law and regulation.   
Documentation included timely assessments, but in some cases it 
lacked appropriate physician orders or was inconsistent with plans 
of care.  Records for approximately 90 percent of service days included 
timely assessments.  Records for approximately 21 percent of service 
days did not include a physician order or request signed before the start 
of treatment.  Approximately 22 percent of nursing and therapy services 
received on service days were not included in the beneficiaries most 
recent plans of care and, therefore, may be inconsistent with their 
treatment goals. 
RECOMMENDATIONS 
On many service days, beneficiaries only documented services were 
meals and/or snacks.  Many also received therapy services from staff 
who were not supervised in accordance with State requirements.  Our 
findings indicate the need for (1) explicit requirements regarding the 
provision of health services in Medicaid adult day health centers and  
(2) enforcement of current therapy supervision requirements.  
Therefore, we recommend that CMS: 
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E X E C U T I V E   S U M M A R Y  
Specify what services are required for Medicaid reimbursement of 
adult day health services.     
Direct States to enforce supervision requirements for staff who 
provide therapy services in Medicaid adult day health centers. 
Take appropriate action to address the centers that did not respond 
to repeated data requests.  
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
In its written comments on our draft report, CMS concurred with all of 
our recommendations.  In response to our first recommendation, CMS 
stated that it will educate States on the proper authorities by which 
services in an adult day health setting may be covered under Medicaid.  
In response to our second recommendation, CMS stated that it will 
ensure that each State plan includes assurances that services are 
provided in accordance with Federal regulations.  In response to our 
third recommendation, CMS stated that it will follow up with the 
appropriate States to discuss whether they have policies and procedures 
in place that require Medicaid providers to allow State Medicaid 
agencies access to data and records that can be used to support 
appropriate reimbursement for services.   
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 T A B L E   O F   C O N T E N T S  
 
EX ECUT I VE  SUM M ARY  .....................................i 
 
 
   
I NT RO DU CT I O N  ............................................ 1 
 
 
   
F I NDI NG S  ................................................. 15 
 
Beneficiaries received at least one health service on  
60 percent of service days ................................ 15 
 
Approximately 43 percent of therapy services were provided  
 
by staff who lacked required supervision ....................  19 
 
Documentation included timely assessments, but in some  
cases it lacked appropriate physician orders or was inconsistent  
 
with plans of care .......................................  20 
   
 
  RECO M M END AT I O N S  ..................................... 22 
Agency Comments and Office of Inspector General Response .... 23 
 
 
 
APP EN DI X ES  ............................................. 24 
    A:  Confidence Intervals ................................. 24 
    B:  Agency Comments ...................................  30 
 
 
    
  ACKNO WL E DG M E N T S ..................................... 33 
 
 
 
 
 
 
 
    
  
   
 I N T R O D U C T I O N  
OBJECTIVES 
1.  To describe the types of services reimbursed by Medicaid adult day 
health programs in the 12 States that provide nursing- and  
therapy-focused adult day health services through a State plan 
benefit. 
2.  To determine whether nursing and therapy services are provided by 
staff who are qualified and/or supervised in accordance with State 
licensing requirements. 
3.  To determine whether beneficiary records contain required 
documentation. 
BACKGROUND 
Federal and State reviews of Medicaid adult day health services 
identified problems with reimbursement systems and questionable 
billings.1  Because reimbursement is based on bundled payment rates, 
the Centers for Medicare & Medicaid Services (CMS) and State 
Medicaid programs do not receive information about the individual 
services actually provided to beneficiaries in the12 States that provide 
nursing- and therapy-focused adult day health services through a State 
plan benefit.  Furthermore, some adult day health centers billed 
Medicaid for deceased or ineligible beneficiaries or used questionable 
referrals for care.2      
Medicaid Adult Day Health Services 
Adult day health centers are organized outpatient programs that 
provide health, therapeutic, and social services and activities to 
program participants.  The services and eligibility requirements vary 
 
1 See California Department of Health Services, Medi-Cal Payment Error Study, Fee for 
Service and Dental Programs, 2005, p. 15.  Accessed at  
http://www.dhcs.ca.gov/formsandpubs/publications/Documents/ANI_MPES%202005%20Rep
ort.pdf on March 16, 2010.  New Jersey State Legislature, Office of Legislative Services, 
Office of the State Auditor, Department of Health and Senior Services, Division of  
Consumer Support, Medical Assistance to the Aged, Medical Day Care Program                
(A-02-02-01026), March 24, 2003.  Office of Inspector General (OIG), Ryan White Title I 
Funds Claimed by an Adult Day Health Care Contractor of the San Francisco Eligible 
Metropolitan Area for the Fiscal Year Ended February 28, 2002 (A-09-03-01018),     
February 9, 2005. 
2 Sixteen adult day centers accused of rampant fraud, New Jersey Star-Ledger,    
August 25, 2003.  Reporting on a 2002 investigation by the New Jersey Department of 
Health Services Program Integrity Unit and the State Attorney Generals Office.   
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across States, but most States cover a variety of skilled nursing; health 
monitoring; rehabilitation services, such as physical and occupational 
therapy and speech-language pathology; and/or mental health 
counseling and support.  Adult day health centers also generally provide 
meals, assistance with activities of daily living, social and recreational 
activities, and transportation to and from the center.   
Eligibility for adult day health services generally is determined by an 
individuals assessed need for one or more offered services.  A program 
participant may be eligible to receive adult day health services for a 
limited period to address a specific rehabilitative goal or for many years 
to address a chronic health issue, depending on the participants 
assessed needs and the goals established in his or her plan of care.3  The 
average age of adult day health service participants is 75; most are 
disabled.4  
State Options for Medicaid Coverage of Adult Day Health Services 
State Medicaid programs have options for covering adult day health 
services, including section 1915(c) home- and community-based services 
waivers, optional State plan benefits, and home- and community-based 
State plan benefits.    
Most States provide adult day health services through one or more 
section 1915(c) home- and community-based services waiver(s).  Section 
1915(c) waivers allow States to target services to the population thought 
most likely to benefit.  To be eligible for 1915(c) waiver services, 
beneficiaries must require an institutional level of care.5   
States, including the 12 in our review, also may cover adult day health 
services under an optional benefit through their Medicaid State plan.6  
Section 1905(a) of the Social Security Act does not include adult day 
 
3 Plans of care, typically developed by a nurse, therapist, or interdisciplinary team of 
health care providers, identify problem areas for beneficiaries, list measurable goals, and 
describe treatments to be provided by center staff to enable beneficiaries to achieve these 
goals.  
4 J.A Lucas, N.S Rosato, J.A. Lee, and S. Howell-White, Adult Day Health Services:  A 
Review of the Literature, Rutgers Center for State Health Policy, August 2002.  Accessed at 
http://www.cshp.rutgers.edu/PDF/AdultDaycareLitRev.pdf on June 15 2010. 
5 Under this requirement, a beneficiary must, in the absence of the specified home- and 
community-based service, require the level of care provided in a hospital, nursing facility, or 
intermediate care facility for the mentally retarded.  Social Security Act,  1915(c)(1). 
6 States outline their Medicaid programs in their State plans.  The State plan, once 
approved by CMS, specifies eligibility requirements, the level and type of benefits, payment 
rates and methodology, and the administrative structure for the States Medicaid program. 
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health services as a specific coverable State plan service, but State 
Medicaid programs may pay for these services under an appropriate 
State plan benefit, such as personal care services, physical therapy, or 
nursing services.  Generally, a benefit provided through the Medicaid 
State plan is available to all categorically eligible Medicaid beneficiaries 
who meet the conditions of coverage for the benefit.7   
Provisions in the Deficit Reduction Act of 2005 expanded State options 
for covering adult day health benefits in State plans.  Pursuant to 
section 1915(i) of the Social Security Act,8 States can elect to provide 
home- and community-based State plan services (including adult day 
health services) to elderly and disabled beneficiaries.  To cover services 
under this authority, States must meet conditions not required for other 
State plan benefits.9  As with other State plan benefits, beneficiaries are 
not required to meet the established institutional level of care to be 
eligible for section 1915(i) services although, unlike with other State 
plan benefits, beneficiaries income must not exceed 150 percent of the 
Federal poverty level.  
As of December 31, 2007, the last date of the 6-month period covered by 
our review, 47 State Medicaid programs provided some form of adult 
day health services to eligible beneficiaries, in most cases through a 
1915(c) home- and community-based services waiver or through an 
optional State plan benefit.10 
Adult Day Health Requirements 
Within broad Federal Medicaid requirements, individual States 
establish the specific requirements that must be met for Medicaid 
reimbursement of adult day health State plan benefits.  Each State plan 
 
7 42 CFR  440.240. 
8 42 U.S.C.  1396n(i). 
9 States must meet the following conditions:  (1) establish needs-based criteria for 
determining an individuals eligibility under the State plan for medical assistance for such 
home- and community-based services and, if the individual is eligible for such services, the 
specific home- and community-based services that the individual will receive; (2) establish 
needs-based criteria for institutionalized care that are more stringent than needs-based 
criteria for section 1915(i) home- and community-based services; (3) project the number of 
individuals to be provided home- and community-based services; and (4) use independent 
assessments to determine the individuals eligibility for the services. 
10 Department of Health & Human Services, Assistant Secretary for Planning and 
Evaluation; K. Siebenaler, J. OKeeffe, C. OKeeffe, D. Brown, and B. Koetse, Regulatory 
Review of Adult Day Services:  Final Report, August 2005, pp. 224.  Accessed at 
http://aspe.hhs.gov/daltcp/reports/adultday.pdf on March 16, 2010; OIG review of State 
plans and Medicaid waivers.   
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must specify the amount, duration, and scope for each service that it 
provides for and ensure that each service [is] sufficient in amount, 
duration, and scope to reasonably achieve its purpose.11  Of the  
50 States and the District of Columbia, 12 States provided nursing- and 
therapy-focused adult day health services through a State plan benefit 
as of December 31, 2007.12, 13     
Most State regulations include requirements related to patient 
eligibility, coverage of services, physician orders, plans of care, 
documentation of services, and provider qualifications.  All States 
included in our review required that Medicaid adult day health services 
be: 
(1) ordered or requested by a physician or other medical practitioner;  
(2) provided to eligible beneficiaries, as determined by a patient  
     assessment; 
(3) included in or consistent with a plan of care; 
(4) rendered by staff whose qualifications and/or supervision meet State  
     licensing requirements; and 
(5) supported by appropriate documentation, such as progress notes,  
     flowcharts, and treatment logs.   
State requirements also outline the authorized services and attendance 
requirements for adult day health service participants.  Requirements 
in the 12 States included in our review outline which services are 
authorized within adult day health programs, but generally do not 
specify, with the exception of transportation services and meals, the 
frequency and duration of particular services that must be provided to 
participants.  States also determine the minimum amount of time a 
beneficiary must be present for the center to bill for Medicaid 
reimbursement for full or half days.  Depending on the State,  
 
11 42 CFR  440.230. 
12 These States were California, Maine, Maryland, Massachusetts, Missouri, New 
Hampshire, New Jersey, New York, Nevada, Texas, Washington, and Vermont.  Maryland 
eliminated its State plan adult day health benefit after December 31, 2007, and began 
covering adult day health services through a 1915(c) waiver.   
13 The remaining 39 States and the District of Columbia (1) provided an adult day health 
service benefit through at least one 1915(c) or 1115 waiver, but not through their State 
plan; (2) provided a State plan adult day health service benefit that was not nursing and 
therapy focused; or (3) did not provide a Medicaid adult day health benefit. 
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beneficiaries typically must be present for 4 to 8 hours for the center to 
receive Medicaid reimbursement for a full day of service.      
Proposed Requirements 
In August 2007, CMS promulgated a Notice of Proposed Rulemaking 
concerning coverage for Medicaid rehabilitative services.14  The 
proposed rule specified the types of services that would be eligible for 
Medicaid reimbursement under the rehabilitative benefit.  In particular, 
it indicated that: 
     rehabilitative services would not include recreational and  
     social activities that are not specifically focused on the  
     improvement of a physical or mental health impairment  
     and achievement of a specific rehabilitative goal specified in  
     the rehabilitation plan, and provided by a Medicaid qualified      
     provider recognized under State law.15   
The proposed rule would have required States that include adult day 
health (among other services) as a rehabilitative service benefit in their 
State plan, including nine States in our review, to alter the scope and/or 
documentation requirements of these services.   
Concerned that beneficiaries would lose access to rehabilitative services, 
Congress enacted section 5003(d) of the American Recovery and 
Reinvestment Act of 2009, which states that it is the sense of Congress 
that the Secretary of Health & Human Services should not promulgate 
as final any of the following proposed Medicaid regulations ..., 
including the proposed rehabilitative services regulation published on  
August 13, 2007.16  CMS withdrew the proposed rehabilitative services 
rule in November 2009.  As a result, although States have established 
requirements for services (such as adult day health) that are covered 
under the rehabilitative benefit, there are no explicit Federal 
requirements concerning the types of services that are eligible for 
Medicaid reimbursement under the rehabilitative benefit.  
  
Reimbursement Methodologies for Adult Day Health Services 
Although specific reimbursement methodologies for adult day health 
services vary, the 12 States that provided a nursing- and  
therapy-focused adult day health benefit through their State plans 
reimbursed providers based on bundled payment rates.  A bundled 
 
14 72 Fed. Reg. 45201 (Aug. 13, 2007). 
15 72 Fed. Reg. 45201, 45206 (Aug. 13, 2007). 
16 P.L. 111-5 (Feb. 17, 2009). 
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I N T R O D U C T I O N  
payment covers all services provided to a beneficiary within a specified 
period.  The actual bundled rates and means of calculating the rates 
varied across the States.  For example, in 2007, daily adult day health 
rates were $63.16 for a full day in Missouri and $76.88 in California and 
ranged from approximately $70 to more than $200 in New York.17  In 
Texas, the bundled reimbursement rate varied based on the 
beneficiaries level of need and the number of hours spent at the center.  
During our period of review, Medicaid claims for adult day health 
services, even when based on daily rates, often were submitted for 
reimbursement on a weekly, monthly, or other less frequent basis.   
Related Reviews 
Previous reviews in two States included in this latest review have 
indicated that adult day health services may be vulnerable to improper 
billing.  The California Department of Health Services found that 
among all Medicaid providers, adult day health service providers had 
the highest percentage of claims completely in error and the greatest 
number of errors related to the provision of medically unnecessary care 
in 2005.18   
In addition, in 2003, the New Jersey Office of the State Auditor, in 
partnership with the Department of Health & Human Services OIG, 
released a report on the administration of New Jerseys Medical Day 
Care program.19  The report indicated that reviewers could not 
determine the reasonableness of the payments because the program 
regulations did not define adequately the population to be served.  The 
study also identified a large number of ineligible clients in some 
facilities and incomplete attendance records.  The report concluded that 
the Medical Day Care program had evolved from an alternative to 
nursing home care to a program that provided services to any 
beneficiary enrolled in Medicaid because the State requirements did not 
 
17 In New York, maximum daily adult day health rates are based on the sponsoring 
skilled nursing facilities established facility rate. 
18 California Department of Health Services, Medi-Cal Payment Error Study, Fee for 
Service and Dental Programs, 2005, p. 15.  Accessed at  
http://www.dhcs.ca.gov/formsandpubs/publications/Documents/ANI_MPES%202005%20Rep
ort.pdf on March 16, 2010. 
19 New Jersey State Legislature, Office of Legislative Services, Office of the State 
Auditor, Department of Health and Senior Services, Division of  Consumer Support, 
Medical Assistance to the Aged, Medical Day Care Program (A-02-02-01026), March 24, 
2003.  
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explicitly define the types of medical conditions that warranted Medical 
Day Care services.   
A 2002 investigation by the New Jersey Department of Health Services 
Program Integrity Unit and the Division of Criminal Justice in the 
State Attorney Generals Office identified at least $600,000 in 
questionable billings by adult day health service centers.20  These 
centers billed Medicaid for deceased patients, patients who did not 
require services, and patients who attended centers for only a fraction of 
the minimum time required by the State.  Some of these centers did not 
have a nurse on duty, as required, or encouraged patients to attend with 
promises of toaster ovens, fruit, or trips to Atlantic City.      
METHODOLOGY 
Scope 
We reviewed beneficiary and facility records associated with a random 
sample of adult day health service days from the last 6 months of 2007.  
We focused on the 12 States that, as of December 31, 2007, provided 
nursing- and therapy-focused adult day health services through a State 
plan benefit to primarily elderly or disabled individuals.21   
We selected the 12 States to ensure consistency in the types of services 
and populations included in our review.  We focused on States that 
structured their adult day health benefit to provide rehabilitative and 
other health services to a primarily elderly or disabled population.  
Including States that offer different types of adult day health benefits, 
such as through 1915(c) waivers, would have made a multi-State review 
impractical.  States have a great deal of flexibility in designing 1915(c) 
waiver benefits, and as a result, waiver services and requirements 
generally vary across States.  Similarly, the services provided and 
populations served through adult day health benefits focused on mental 
health rehabilitation differ significantly from nursing- and therapy-
focused adult day health services provided through either State plans or 
waivers.     
 
20  Sixteen adult day centers accused of rampant fraud, New Jersey Star-Ledger, 
August 25, 2003.   
21 These States were California, Maine, Maryland, Massachusetts, Missouri, New 
Hampshire, New Jersey, New York, Nevada, Texas, Washington, and Vermont.  Maryland 
eliminated its State plan adult day health benefit after December 31, 2007, and began 
covering adult day health services through a 1915(c) waiver.   
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Sample Selection 
We requested that the 12 States provide all adult day health service 
claims with dates of service in the last 6 months of 2007 maintained in 
their Medicaid Management Information Systems (MMIS).  We 
requested the following information about adult day health claims: 22 
 the associated service date(s); 
 the beneficiarys name, date of birth, and Medicaid identification 
number; and 
 the Medicaid provider name, provider number, and mailing address. 
Using this information, we created a database of 8,522,935 service days, 
each of which represented a unique combination of a service day and a 
beneficiary Medicaid identification number.  From this database, we 
selected a simple random sample of 400 service days.  Because the 
MMIS data in some States did not contain a separate claim for each 
service day, in some cases we estimated likely service days based on the 
MMIS claim dates and reimbursement information.  As a result, in 
these cases, sampled service days may not reflect days on which a 
beneficiary actually was present in an adult day health center.  For 
example, an adult day health claim could have a claim date from 
September 3 to September 7, 2007.  We would have sampled 1 day 
within this time period, for example, September 4.  It is possible that 
the beneficiary was not present in the center on September 4, but 
attended only on September 3, 5, and 7.  
Record Collection  
We requested beneficiary and facility records associated with sampled 
service days from each center that provided the adult day health 
services.  We forwarded the information for the service days to our 
medical review contractor (contractor), which sent letters to each of 
the centers that provided the adult day health services.  The letter 
requested (1) all physician orders, plans of care, and assessments 
maintained for the beneficiary; (2) beneficiary records documenting 
the beneficiarys first month of attendance at the facility following 
initial enrollment; (3) beneficiary records documenting services, 
 
22 We chose the last 6 months of 2007 because we wanted all dates of service to be 
relatively close in time to our data.  We did not expect that there would be differences in 
documentation at the adult day health centers in the last 6 months of 2007 when compared 
with the first 6 months.     
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progress notes, and flowcharts for the 6 months before the sampled 
service date;23 and (4) facility records, such as treatment, equipment, 
and transportation logs; beneficiary and staff sign-in sheets; and staff 
schedules for the sampled service date.  
We limited our review to service days for which patient or other 
facility records included some documentation that the beneficiary was 
at the facility.  Because our review was based solely on information 
available in patient and other facility records, we wanted to ensure 
that documentation would be available to complete an accurate 
review of service days.   
Of the 400 service days, we removed 57 because we deemed them 
ineligible (not part of our intended target population) for the following 
reasons: 
 the provider was under OIG investigation (1 service day), 
 available information indicated that the beneficiary was not in the 
center on the sampled service day (53 service days),24 and 
 the center did not provide primarily nursing and therapy services to 
an elderly and/or disabled population (3 service days). 
The remaining 343 service days constituted our eligible sample size 
(sample units deemed part of the intended study population).  We 
received responses for 300 of these 343, a response rate of 88 percent, 
and the contractor reviewed records associated with all 300 service 
days.   The contractor did not complete reviews for the other  
43 service days for the following reasons: 
 the center did not respond to repeated requests for records  
(37 service days),25 
 
23 If the beneficiary attended the center for fewer than 6 months, we asked that the 
center provide all records documenting services, progress notes, and flowcharts before the 
sampled service date for that beneficiary. 
24 In these cases, our service day did not reflect a day on which the beneficiary actually 
received an adult day health service, whether because the beneficiary was absent or the 
sampled service day fell on a Saturday or Sunday and the center was closed. 
25 With no contact from the center, we could not confirm that the beneficiary was present 
on the sampled service day.  As a result, we assumed these service days were part of our 
intended study population and treated them as nonrespondents missing completely at 
random in our analysis.  This means our results are based only on the 300 responding 
service days. 
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 incomplete records did not allow medical reviewers to conduct their 
reviews (5 service days), or 
 the center reported that the beneficiary listed on the claim never 
attended the facility (1 service day). 
Medical Record Review 
The medical record review was completed in two parts.  For the first 
part, a nurse-screener reviewed records associated with each service day 
to determine whether the following was included:  (1) physician orders 
or requests, (2) initial assessments, and (3) plans of care.   
The nurse-screener also identified all individual services received on 
each service day, categorized the individual services into one of  
13 service types or into an other category,26 and indicated whether 
each individual service was included in the beneficiarys plan of care.  
The 13 service types were: 
 nursing,  
 physical therapy,  
 occupational therapy, 
 speech-language pathology, 
 therapeutic activity, 
 recreational/social activity, 
 assistance with activities of daily living (ADL), 
 dietician/nutritionist education, 
 meal, 
 snack, 
 mental health/psychiatric service, 
 pharmacy service, and 
 social work service. 
 
26 We instructed the nurse-screener to categorize services as other if they did not fall 
into one of the established service types.  The nurse-screener included four          
psychiatric-related services in the other category.  For analysis to determine the 
percentage of health and nonhealth services received on sampled service days, we included 
these services in the mental health/psychiatric service type.  The nurse-screener also 
included four nonspecific services in the other service type, which we categorized as 
nonhealth for the analyses on health and nonhealth services. 
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We instructed the nurse-screener to be as inclusive as possible in 
categorizing each service as a therapy service or therapeutic activity.  
The nurse-screener was instructed that, if there was any possibility, 
as determined by the nurse-screener, that an activity, such as group 
exercise or gardening, targeted a beneficiarys functional goals, that 
service should be categorized as therapy or therapeutic activity, even 
if the record did not explicitly indicate that the activity targeted the 
beneficiarys goals.  After completing the first part of the review, the 
nurse-screener forwarded records to one or more subject matter 
experts if they contained at least one of the following services:  
nursing, physical therapy, occupational therapy, or a therapeutic 
activity.27, 28 
For the second part of the review, subject matter experts completed a 
focused review of nursing and therapy services.  Two registered nurses, 
two physical therapists, and two occupational therapists completed our 
focused nursing and therapy reviews.  The registered nurses determined 
(1) whether documented nursing services were skilled or nonskilled 
nursing services29 and (2) whether the qualifications and/or delegation 
of staff met State licensing requirements.  Physical and occupational 
therapy reviewers determined whether (1) documented therapy services 
were rehabilitative/restorative or maintenance services, (2) services 
were provided one-on-one or in a group, and (3) the qualifications and/or 
supervision of staff met State licensing requirements. 
Medical reviewers referred to the State-specific requirements we 
identified when assessing the appropriateness of staff qualifications.  
We reviewed State requirements for adult day health services and 
providers of nursing, physical and occupational therapy, and        
speech-language pathology services for the 12 States included in our 
review.  In particular, in consultation with the medical review 
 
27 Therapeutic activities received further review by a subject matter expert if they were 
mentioned in the beneficiarys plan of care or were provided by a physical therapist, 
occupational therapist, or a therapy assistant or aide. 
28 Patient records contained no documented speech-language pathology services on 
sampled service days.  Records with these services on service days also would have been 
forwarded to subject matter experts for further review.    
29 Based on CMSs definition of skilled nursing service in the Medicare Benefit Policy 
Manual, ch. 7, Home Health Services, section 40.1, Skilled Nursing Care, we defined skilled 
nursing services as those that must, given the nature of the service or the condition of the 
patient, be provided by a registered nurse or a licensed practical/vocational nurse.  State 
definitions of skilled nursing care may vary.    
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contractor, we identified State adult day health requirements for 
physician orders, initial assessments, plans of care, and staff 
qualifications, including the appropriate supervision and delegation of 
services.   
Analysis 
The results presented in the findings are based on analysis of the 
medical review results.  The results are projected to all service days 
during the last 6 months of 2007 in the 12 States that provided 
nursing- and therapy-focused adult day health services through a 
State plan benefit to primarily elderly or disabled individuals.   
Some of the estimates are based on service-level data.  Our  
nurse-screener recorded all services that were documented on the  
300 service days, accounting for 2,829 services.  The service-level 
results are projected to all documented services on service days in the 
last 6 months of 2007 in the 12 States. 
Appendix A lists the confidence intervals for all estimates in this report.  
We determined the following for sampled service days:  
 what services were documented; 
 the extent to which documented therapy services were 
rehabilitative and documented nursing services were skilled; 
 the extent to which services were provided in one-on-one or group 
settings; 
 the extent to which the qualifications and/or supervision of staff 
providing services met State licensing requirements; and  
 the extent to which physician orders, initial assessments, plans of 
care, and other documentation were maintained in the patient and 
other facility records associated with sampled service days.  
To determine the percentage of service days on which beneficiaries 
received a health or nonhealth service, we categorized all services 
documented on sampled service days as either health or nonhealth.    
Health services were defined as those that must be provided directly 
by, or under supervision or delegation of, a licensed practitioner.  We 
indentified nursing, physical and occupational therapy, speech-
language pathology, therapeutic activities, pharmacy, 
dietician/nutritionist education, and certain other services (e.g., 
  OEI-09-07-00500  MEDICAID SERVICES PROVIDED IN AN ADULT DAY HEALTH SETTING  12      
  
   
I N T R O D U C T I O N  
psychiatric services) as health services.30  Nonhealth services were 
defined as recreational and social activities, assistance with ADLs,31 
meals, snacks, and social work.  We categorized the services in this 
way to distinguish between services serving primarily a health or 
medical function and those serving primarily a support function.  
With the exception of meals and snacks, all of these health and 
nonhealth services could meet the definition of a Medicaid-covered 
service.    
Limitations 
We limited our review to service days for which available 
documentation indicated that beneficiaries were present in centers.  
Beyond reviewing available facility documentation, we did not attempt 
to verify provider statements that a beneficiary was not in a center on 
the sampled service day.  In addition, we were not able to determine the 
extent to which adult day health centers may have been reimbursed for 
service days on which beneficiaries were not at centers because State 
MMIS data included claims that covered more than 1 day of service. 
CMS has no standard definition or guidance regarding what constitutes 
either a health or nonhealth service.  Therefore, we categorized each of 
the 13 service types as either a health or a nonhealth service.  The 
results in the first finding reflect this categorization and could vary if 
the service types were categorized differently.     
Our results may underestimate the number of nonhealth services and 
overestimate the number of health services received on service days.  
We reviewed only those services documented in beneficiaries records.  
Documentation requirements for recreational, social, and other  
nonhealth services, when they exist, generally are less clear than those 
for health services.  In some cases, particularly for nonhealth services, 
such as recreational and social activities, beneficiaries may have 
received services that were not documented in records maintained by 
adult day health centers.  In addition, because we instructed the nurse-
 
30 In some cases, beneficiaries received services related to ADLs, such as ADL training, 
education, and monitoring, that medical reviewers categorized as a nursing or therapy 
service.  We classified these ADL-related services as health services because they are 
intended to provide beneficiaries the information and training needed to achieve 
rehabilitative goals.    
31 We classified assistance with ADLs as a nonhealth service because such assistance is 
intended to enable beneficiaries to perform everyday self-care activities, such as eating, 
bathing, and dressing. 
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I N T R O D U C T I O N  
screener to be inclusive when classifying a service as either a therapy 
service or a therapeutic activity, we may have classified some services 
with an exclusively social or recreational function as health services. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors 
General on Integrity and Efficiency. 
   
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 F I N D I N G S  
Beneficiaries received at least one health service  On approximately 60 percent 
on 60 percent of service days  of service days, beneficiaries 
received at least one 
documented health service.  Table 1 highlights the percentage of service 
days on which beneficiaries received the most common types of services.  
The total number of documented services on service days ranged from  
0 to 55.  On average, nine health and nonhealth services were 
documented in beneficiaries records each service day.  On service days 
with at least 1 documented health service, the number of health services 
ranged from 1 to 47, with an average of 11. 
 
T able 1:  Service Types Documented on at Least 10 Percent of  
Service Days 
 
Service Type32  Health/Nonhealth  Percentage of Service Days (n=300) 
 
 Nursing    Health  59% 
 
Meal   Nonhealth  45% 
 
Snack  Nonhealth  35% 
 
 Occupational therapy  Health  29% 
 
Physical therapy  Health  29% 
 
Assistance with ADLs  Nonhealth33  27% 
 
 Social work service  Nonhealth  19% 
 
Recreational/social activities  Nonhealth  18% 
 
 Source:  OIG analysis of adult day health medical review results, 2010. 
 
 
 
 
32 No speech-language pathology services were documented on service days. 
33 Excludes services related to ADLs that medical reviewers categorized as nursing or 
therapy services. 
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F I N D I N G S  
Nursing services were the most commonly documented services 
Nursing services were documented on approximately 59 percent of 
service days.  Beneficiaries received nursing services on almost all 
service days with at least one documented health service.  The most 
frequently documented nursing services included vital signs checks  
(28 percent of service days), pain assessments (22 percent), blood sugar 
checks (13 percent), medication administration (12 percent), and 
monitoring of food intake (11 percent).  
Beneficiaries typically received nursing services in combination with 
other services.  On approximately 49 percent of service days, 
beneficiaries received nursing care along with at least one other service, 
such as a meal or assistance with ADLs.  On a small number of service 
days (1 percent), beneficiaries received physical and/or occupational 
therapy without a nursing service.  Beneficiaries received only nursing 
services on approximately 10 percent of service days.     
Beneficiaries received both skilled and nonskilled nursing care.   
Among all nursing services received on service days, approximately  
48 percent were skilled nursing services (e.g., monitoring the signs and 
symptoms of an allergy, assessing a beneficiarys mental status, or 
assessing medication side effects), whereas 52 percent were nonskilled 
services (e.g., conducting a pain assessment, checking a beneficiarys 
blood sugar level, or monitoring a beneficiarys food intake).   
Beneficiaries received therapy, primarily maintenance care, on 
approximately 32 percent of service days 
Beneficiaries received physical and/or occupational therapy on 
approximately one-third of all service days.  Physical and occupational 
therapy each were documented on 29 percent of service days; 
beneficiaries received both physical and occupational therapy services 
on 25 percent of service days.34  Typically, beneficiaries received therapy 
in addition to one or more nursing service(s).    
Maintenance care was the most frequently documented type of physical 
and occupational therapy service.  Maintenance care was documented in  
88 percent of the physical therapy services and 79 percent of the 
 
34 Beneficiaries received physical therapy with no occupational therapy on approximately  
4 percent of service days and, similarly, occupational therapy with no physical therapy on 
approximately 4 percent of service days.  Because of rounding, the percentage of service 
days with only physical therapy, only occupational therapy, and both physical and 
occupational therapy does not total 32 percent. 
  OEI-09-07-00500  MEDICAID SERVICES PROVIDED IN AN ADULT DAY HEALTH SETTING  16      
  
   
F I N D I N G S  
occupational therapy services.  Maintenance care generally refers to 
treatments and activities, often repetitive, that are planned by a 
licensed therapist to maintain a beneficiarys level of function when no 
additional improvement is expected.35  Commonly documented physical 
therapy maintenance services included general conditioning exercises, 
strengthening exercises, ambulation, and endurance exercises.  
Commonly documented occupational therapy maintenance services 
included general conditioning, Thera-Band36  exercises/activities, 
cognitive skills development, and seated active range-of-motion 
exercises.  Both physical and occupational therapy maintenance services 
were provided primarily in a group setting. 
A smaller proportion of the documented physical and occupational 
therapy services were for rehabilitative or restorative care.  
Documented rehabilitative or restorative care, such as balance 
exercises, physical therapy evaluations or reevaluations, and gait 
training, represented 10 percent of the physical therapy services.  
Seventeen percent of the occupational therapy services were for 
rehabilitative or restorative care, such as ADL training, occupational 
therapy reevaluations, endurance training, and breathing exercises.   
On 40 percent of service days, beneficiaries received no documented health 
services, including 34 percent of days on which meals and/or snacks were 
the only documented services  
On 40 percent of adult day health service days, beneficiaries received no 
documented health services.  On approximately 1 in 3 service days  
(34 percent), meals and/or snacks were the only services documented in 
beneficiaries records.  The 12 States included in our review do not all 
require that beneficiaries receive a health service each day of 
attendance at an adult day health facility.  Furthermore, there is no 
standard CMS definition or guidance regarding what constitutes a 
health service.  Therefore, findings about the health and nonhealth 
services that beneficiaries received could vary if the service types were 
categorized differently.  In addition, with the exception of meals and/or 
 
35 CMS describes a maintenance therapy program as one intended to maintain functional 
status and prevent decline in function in its Medicare Benefit Policy Manual, ch. 15,  
 220.2, Reasonable and Necessary Outpatient Rehabilitation Therapy Services.  State 
Medicaid definitions of maintenance therapy may vary.  Accessed at 
http://www.cms.gov/manuals/downloads/bp102c15.pdf on December 14, 2010.    
36 Thera-Band brand products are used for resistance exercises intended to restore 
muscle and joint function, improve balance and coordination, and build strength. 
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F I N D I N G S  
snacks, the identified nonhealth services could meet the definition of a 
Medicaid-covered service.  As illustrated in Table 2, a meal and/or snack 
was the only documented service on 86 percent of service days without a 
health service.  On 4 service days (1 percent), beneficiaries received no 
documented services, although facility records indicated that they were 
at the adult day health center.   
 
 Table 2:  Service Types Documented on Days With No Documented  
Health Services 
 
Percentage of Service 
Service Type 
Days (n=191) 
 
 Meals and/or snacks only  86% 
 Recreational/social activities only   6% 
 
No documented services  3% 
 
Meals and/or snacks and recreational/social activities  1% 
 
 Meals and/or snacks and assistance with ADLs37  1% 
 
Recreational/social activities and assistance with ADLs  1% 
 
Social work services only  1% 
 
 Meals and/or snacks and undetermined services38  1% 
 
Other, nonspecific services  1% 
 
     Total*  100% 
 
 Source:  OIG analysis of adult day health medical review results, 2010. 
 * Total does not equal 100 percent because of rounding. 
 
 
 
 
37 Excludes services related to ADLs that medical reviewers categorized as nursing or 
therapy services. 
38 The record did not contain enough information for the medical reviewer to classify this 
service. 
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Approximately 43 percent of therapy services were 
Based on available 
provided by staff who lacked required supervision  documentation, approximately  
  43 percent of physical and 
occupational therapy services were provided by staff who lacked 
supervision, where required under State law or regulation, from 
appropriately qualified staff.  These therapy services were provided by 
staff such as physical and occupational therapist assistants or aides 
who, under State law or regulation, required the supervision of a 
licensed physical or occupational therapist.  Medical reviewers indicated 
that the records did not include the required supervisory signature to 
indicate that appropriately qualified staff performed or supervised the 
therapy in accordance with State law or requirements.  In addition, the 
facility records contained no documentation that the appropriately 
qualified staff were at the center on the sampled service day, where 
required.  Of the documented physical therapy services, 54 percent did 
not have any documentation39 indicating that the appropriately 
qualified staff were available to supervise the services.  Approximately 
32 percent of the documented occupational therapy services contained 
no documentation that appropriately qualified staff were available to 
supervise the services.   
Other therapy services were provided directly by qualified staff or staff 
who were appropriately supervised.  Approximately 29 percent of 
physical therapy services and 33 percent of occupational therapy 
services were directly provided by appropriately qualified staff.  An 
additional 16 percent of occupational therapy services were performed 
by staff requiring supervision, and records included documentation that 
supervision was available. 
In addition, therapy services on sampled service dates sometimes lacked 
documentation about who actually provided the service.  Staff 
qualifications were not adequately documented in beneficiaries records 
for approximately 12 percent of physical therapy services and  
13 percent of occupational therapy services on service days.  For an 
additional 6 percent of physical and occupational therapy services, staff 
qualifications were illegible.  Table 3 outlines the qualifications and 
supervision of staff providing therapy services.  
 
39 Documentation included staff schedules, staff sign-in sheets, and staff signatures or 
initials in beneficiaries records. 
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F I N D I N G S  
  Table 3:  Documentation of Qualifications and Supervision of  
Therapy Staff 
 
Physical  Occupational 
  Therapy Documentation 
Therapy  Therapy 
  Staff provided service requiring supervision; records 
54%    32% 
contain no documentation that supervision was available  
 
Service directly provided by qualified staff  29%    33% 
 
Staff provided service requiring supervision; records 
0%   16% 
  contain documentation that supervision was available 
Staff qualifications not documented/description of 
  12%  13% 
qualifications inadequate 
 
Staff qualifications illegible  6%  6% 
 
Service provided by staff performing beyond the scope 
of State license (i.e., staff prohibited from providing  0%  1% 
 
service) 
 
    Total*  100%  100% 
 
Source:  OIG analysis of adult day health medical review results, 2010. 
 *Totals do not equal 100 percent because of rounding. 
 
Records associated with 
Documentation included timely assessments, but in 
approximately 90 percent 
some cases it lacked appropriate physician orders or 
of service days included 
was inconsistent with plans of care 
assessments conducted 
before services began.  
These assessments evaluated each beneficiarys need for adult day 
health care and provided information about what services would be 
included in the beneficiarys plan of care.  Documentation for 
approximately 8 percent of service days contained an assessment that 
was completed after adult day health treatment started.  No assessment 
was included in records for 1 percent of service days.40   
Records for approximately 21 percent of service days did not include a 
physician order or request signed before the start of treatment.  
Although adult day health requirements in the 12 States included in 
our review specify that a physician order or request must be completed 
before the start of treatment, these orders and requests were 
 
40 For the remaining 1 percent of service days, assessments did not appear to be 
completed by the appropriate staff or for the correct admission date. 
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inappropriate or missing for approximately 21 percent of service days.  
Specifically,  
 11 percent were signed late, but within 2 months of the start date; 
 approximately 6 percent were signed between 2 months and 1 year 
after services began; 
 1 percent were signed more than 1 year after treatment began; 
 1 percent included an unsigned order;   
 approximately 1 percent included undated physician orders; and 
 1 percent did not include any physician order or request. 
Records for approximately 79 percent of service days included a 
physician order or request signed before treatment began.   
Approximately 22 percent of documented nursing and therapy services 
were not included in plans of care  
Services documented in beneficiaries treatment records were not 
always included in their plans of care.  Approximately 22 percent of 
nursing and therapy services received on service days were not included 
in beneficiaries most recent plans of care (before the service date) and, 
therefore, may not have been consistent with their treatment goals.   
Table 4 shows the extent to which different types of services were not 
included in beneficiaries plans of care on service days.   
 
Table 4:  Documented Services Not Included in Plans of Care 
 
 Service Type  Percentage  
 All nursing and therapy services  22% 
 
Nursing services  27%  
 
Physical therapy  14% 
 
Occupational therapy  11% 
S ource:  OIG analysis of adult day health medical review results, 2010. 
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 R E C O M M E N D A T I O N S  
In 2007, Medicaid beneficiaries who attended adult day health 
programs received a variety of nursing, rehabilitation, therapeutic, and 
nonhealth services and activities.  Meals and/or snacks were the only 
documented services on 34 percent of service days.  In addition, 
documentation in beneficiary records often included no indication that 
physical and occupational therapy services were rendered by staff who 
received supervision required under State law or regulation.  In some 
cases, physician orders or requests were signed after the start of 
treatment or beneficiaries received services that were not included in 
their plans of care.  Our findings indicate the need for (1) explicit 
requirements regarding the provision of health services in Medicaid 
adult day health centers and (2) enforcement of current therapy 
supervision requirements.  
Therefore, we recommend that CMS:  
Specify what services are required for Medicaid reimbursement of adult day 
health services 
CMS should clearly delineate what services must be provided in adult 
day health centers for providers to receive Medicaid reimbursement.  
State requirements do not always explicitly require that a health 
service be provided on each service day reimbursed by Medicaid.  
Additionally, CMS does not have any standard definition or guidance as 
to what constitutes a health service.  Clear delineation as to what 
services are required for Medicaid reimbursement of adult day health 
services will ensure that CMS pays for the services necessary to deliver 
quality care to beneficiaries who attend adult day health programs.       
Direct States to enforce supervision requirements for staff who provide 
therapy services in Medicaid adult day health centers  
CMS should encourage States to ensure that staff who provide therapy 
services in adult day health centers are operating within the scope of 
practice under State law and regulation.  State physical and 
occupational therapy licensing requirements specify qualifications and 
supervision arrangements for therapy services.  CMS should work with 
States to ensure that adult day health centers are aware of, and are in 
compliance with, these requirements.  CMS could require States to 
conduct program reviews to assess adult day health providers 
compliance with supervision requirements.   
 
 
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  R E C O M M E N D A T I O N S  
Take appropriate action to address adult day health centers that did not 
respond to repeated data requests  
Thirty-one adult day health centers did not respond to requests for 
records representing 37 service days.41  In addition, one center indicated 
that the beneficiary listed on the Medicaid claim never attended the 
facility.  We forwarded information regarding these centers to CMS 
under separate cover. 
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
CMS concurred with all of our recommendations in its written 
comments on our draft report.  In response to our first recommendation, 
CMS stated that it will continue to work with States, either through the 
State Plan Amendment review process or by providing technical 
assistance, to educate States on the proper authorities by which services 
in an adult day health setting may be covered under Medicaid.   
In response to our second recommendation, CMS stated that it will work 
with States, through the State Plan Amendment review process, to 
ensure that each State plan includes assurances that services are 
provided in accordance with Federal regulations.  CMS also stated that 
the findings of this report will be shared with CMS staff responsible for 
conducting financial management reviews.  These reviews verify that 
States claimed Federal financial participation only for services provided 
in accordance with the State plan and Federal regulations.   
In response to our third recommendation, CMS stated that it will follow 
up with the appropriate States to discuss  whether they have policies 
and procedures in place that require Medicaid providers to allow State 
Medicaid agencies access to data and records that can be used to 
support appropriate reimbursement for services rendered.   
We made changes, as appropriate, to the report based on CMSs 
technical comments.  For the full text of CMSs comments, see  
Appendix B. 
 
 
 
41 We requested records from 303 health centers for the 400 sampled service days. 
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Table 1:  Confidence Intervals 
Estimate Description  Sample Size  Point  95-Percent   
Estimate  Confidence Interval 
 
Percentage of service days on which beneficiaries received a documented 
300 service days  60.3%  54.7%65.7% 
health service  
Average number of services documented each service day  300 service days  9.4  8.210.7 
Average number of health services documented each service day with at 
181 service days  11.5  9.913.0 
least one health service 
Percentage of service days on which nursing services were documented   300 service days  59.0%  53.3%64.5%    
Percentage of service days on which a meal was documented   300 service days  45.3%  39.8%51.0% 
Percentage of service days on which a snack was documented  300 service days  35.0%  29.8%40.6% 
Percentage of service days on which occupational therapy was  
300 service days  28.7%  23.8%34.1% 
documented   
Percentage of service days on which physical therapy was documented    300 service days  28.7%  23.8%34.1%  
Percentage of service days on which assistance with activities of daily  
300 service days  26.7%  21.9%32.0%  
living (ADL) were documented   
Percentage of service days on which social work services were  
300 service days  19.3%  15.2%24.2%  
documented 
Percentage of service days on which recreational and/or social activities 
300 service days  17.7%  13.7%22.4% 
were documented   
Percentage of service days on which vital signs checks were documented    300 service days  28.3%  23.5%33.7% 
continued on next page 
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 A  P P E N D I X   ~   A  
            
 
T  able 1:  Confidence Interv  als (C  ontin  ued) 
        Point  95-Percent   
Estimate description  Sample Size 
Estimate  Confidence Interval 
  
Percentage of service days on which pain assessments were documented    300 service days  22.0%  17.7%27.1% 
  
Percentage of service days on which blood sugar checks were  
 
300 service days  13.3%  9.9%17.7% 
documented   
 
Percentage of service days on which medication administration was 
300 service days  11.7%  8.5%15.8% 
documented  
Percentage of service days on which monitoring of food intake was 
300 service days  10.7%  7.6%14.7% 
documented 
Percentage of service days on which nursing care was documented with  
300 service days  49.3%  43.7%55.0%  
at least one other service 
Percentage of service days on which beneficiaries received physical  
300 service days  1.0%  0.3%3.1%  
and/or occupational therapy services, but no nursing services 
Percentage of service days on which only nursing services were 
300 service days  9.7%  6.8%13.6% 
documented  
Percentage of nursing services that were skilled  1,364 services  47.5%  44.6%50.4% 
Percentage of nursing services that were nonskilled  1,364 services  51.8%  48.9%54.6% 
Percentage of service days on which therapy was documented   300 service days  32.3%  27.3%37.9% 
Percentage of service days on which occupational therapy was  
300 service days  28.7%  23.8%34.1% 
documented  
continued on next page 
 
   
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Table 1:  Confidence Intervals (Continued) 
Point  95-Percent   
Estimate description  Sample Size 
Estimate  Confidence Interval 
 
Percentage of service days on which physical therapy was documented   300 service days  28.7%  23.8%34.1%  
Percentage of service days on which beneficiaries received both physical 
300 service days  25.0%  20.4%30.2% 
and occupational therapy  
Percentage of documented physical therapy services that were 
360 services  88.1%  80.5%92.9% 
maintenance services 
Percentage of documented occupational therapy services that were  
341 services  79.2%  69.0%86.7% 
maintenance services 
Percentage of documented physical therapy services that were 
360 services  10.0%  5.6%17.3% 
restorative/rehabilitative services 
Percentage of documented occupational therapy services that were 
341 services  17.0%  10.2%27.0% 
restorative/rehabilitative services 
Percentage of service days on which beneficiaries received no 
300 service days  39.7%  34.3%45.3% 
documented health services 
Percentage of service days on which meals and/or snacks were the only 
300 service days  34.0%  28.8%39.6% 
documented services   
Of service days with no documented health service, percentage on which 
119 service days  85.7%  78.2%90.9% 
only meals and/or snacks were documented  
Of service days with no documented health service, percentage on which 
119 service days  5.9%  2.8%11.9% 
only recreational/social activities were documented  
continued on next page 
 
 
 
 
 
 
 
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Table 1:  Confidence Intervals (Continued) 
 
Point  95-Percent  
Estimate description  Sample Size  Estimate  Confidence Interval 
 
Of service days with no documented health service, percentage on which  
119 service days  3.4%  1.3%8.6% 
no services were documented  
Of service days with no documented health service, percentage on which 
only meals and/or snacks and recreational activities were   119 service days  0.8%  0.1%5.8% 
documented 
Of service days with no documented health service, percentage on which 
only meals and/or snacks and assistance with ADLs were   119 service days  0.8%  0.1%5.8% 
documented   
Of service days with no documented health service, percentage on which 
only recreational/social activities and assistance with ADLs were  119 service days  0.8%  0.1%5.8% 
documented  
Of service days with no documented health service, percentage on which 
119 service days  0.8%  0.1%5.8% 
only social work services were documented  
Of service days with no documented health service, percentage on which 
119 service days  0.8%  0.1%5.8% 
only meals and/or snacks and undetermined services were documented  
Of service days with no documented health service, percentage on which 
119 service days  0.8%  0.1%5.8% 
only other, nonspecific, services were documented  
Percentage of service days on which beneficiaries received no  
300 service days  1.3%  0.5%3.5% 
documented services  
Of documented physical therapy services, percentage that were provided  
360 services  43.2%  33.9%53.0% 
by staff who lacked required supervision 
Of documented physical therapy services, percentage that did not include 
341 services  53.6%  41.5%65.3% 
documentation of necessary supervision 
Of documented occupational therapy services, percentage that did not 
341 services  32.3%  22.5%43.8% 
include documentation of necessary supervision 
continued on next page 
 
 
 
 
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Table 1:  Confidence Intervals (Continued) 
Point  95-Percent   
Estimate description  Sample Size  Estimate  Confidence Interval 
 
Of documented physical therapy services, percentage that were directly 
360 services  28.6%  19.3%40.2% 
performed by qualified staff 
Of documented occupational therapy services, percentage that were  
341 services  32.6%  23.1%43.7% 
directly performed by qualified staff 
Of documented occupational therapy services, percentage that were 
performed by staff who required supervision and for which appropriate 
341 services  15.8%  10.0%24.2% 
documentation of supervision is available in beneficiary and/or facility 
records 
Of physical therapy services, percentage that have missing/inadequate 
360 services  11.9%  5.6%23.8% 
description of provider qualifications 
Of occupational therapy services, percentage that have  
341 services  12.9%  6.9%22.9% 
missing/inadequate description of provider qualifications 
Of physical therapy services, percentage that list illegible provider 
360 services  5.8%  1.9%16.6% 
qualifications 
Of occupational therapy services, percentage that list illegible provider 
341 services  5.6%  2.1%14.2% 
qualifications 
Of documented occupational therapy services, percentage that were 
341 services  0.9%  0.2%3.8% 
provided by staff performing beyond the scope of their State licenses 
Of service days, percentage that included timely assessments  300 service days  89.7%  85.7%92.7% 
Of service days, percentage that included assessments completed after 
300 service days  8.3%  5.7%12.1% 
treatment began 
Of service days, percentage for which no assessment was included in 
300 service days  1.3%  0.5%3.5% 
records  
Of service days, percentage for which assessment did not appear to be 
300 service days  0.7%  0.2%2.6% 
completed by the appropriate staff or for the correct admission date 
continued on next page 
 
 
 
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A P P E N D I X   ~   A  
Table 1:  Confidence Intervals (Continued) 
Point  95-Percent   
Statistic  Sample Size 
Estimate  Confidence Interval 
 
Of service days, percentage that did not include a dated or timely  
300 service days  21.3%  17.0%26.4% 
physician order 
Of service days, percentage with a physician order signed after treatment 
300 service days  11.0%  7.9%15.1%   
began, but within 2 months 
Of service days, percentage with a physician order signed after 2 months 
300 service days  5.7%  3.5%8.9% 
but within 1 year 
Of service days, percentage with a physician order signed more than  
300 service days  1.0%  0.3%3.1% 
1 year after treatment began 
Of service days, percentage with an unsigned order   300 service days  1.0%  0.3%3.1% 
Of service days, percentage with no physician order  300 service days  1.3%  0.5%3.5% 
Of service days, percentage with a timely physician order  300 service days  78.7%  73.6%83.0% 
Of nursing and therapy services, percentage that were not included in the 
2,065 services  21.9%  18.2%26.0% 
most recent plan of care 
Of nursing services, percentage that were not included in the most recent 
1,364 services  26.8%  22.2%32.1% 
plan of care 
Of physical therapy services, percentage that were not included in  
360 services  13.6%  8.7%20.6% 
the most recent plan of care 
Of occupational therapy services, percentage that were not included  
341 services  10.8%  5.7%19.8% 
in the most recent plan of care 
Source:  Office of Inspector General analysis of adult day health medical review results, 2010. 
  OEI-09-07-00500  MEDICAID SERVICES PROVIDED IN AN ADULT DAY HEALTH SETTING  29    x 
A  P  PEN  D  B 
AGENCY COMMENTS 
,,.,i,IIVICI:s'.~ 
~
('  .  DEPARTMENT OF HEALTH & HUMAN SERVICES  Centers for Medicare & Medicaid Services 
,~ 
Administrator 
Wa.hlnglon, DC 20201 
DATE: 	 MAR  1 62011 
TO: 	 Daniel R, Levinson 
Inspector General 
FROM: 	 Donald M. Berwick, 
Administrator 
SUBJECT: 	 Office of Inspector General (OIG) Draft Report: "Medicaid Adult Day Health 
Services" (OEI-09-0700500) 
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to comment on 
this draft report. In this draft report, the OIG: (I) examined the types of services reimbursed by 
Medicaid in an adult day health setting; (2) detennined whether nursing and therapy services were 
provided or supervised by qualified staff; and (3) examined whether beneficiary records contained the 
required documentation, 
Under Medicaid law, certain Adult Day Health Services (ADHS) fall within the statutory definition 
of"medical assistance" which is set forth at section I 905 (a) of the Social Security Act (the Act), 
Based on the statutory authority provided in sections 1915( c) and 1915(i) of the Act, ADHS are 
generally furnished 4 or more hours per day on a regularly scheduled basis for one or more days per 
week, in a non-institutional, community-based setting, encompassing both health and social services, 
Following Federal guidance, States define what services can be included in ADHS and set the 
provider qualifications under these authorities, 
With respect to section 1905(a) of Act, ADHS are not included as a specific coverable Medicaid State 
plan service. However, there are services provided by ADHS that may be covered under the CMS 
approved State plan, In such situations, Medicaid may pay for those services under the appropriate 
benefit (e,g., personal care, physical therapy, occupational therapies and nursing services) furnished 
by the ADHS center, However, Medicaid cannot pay for activities not included in those recognized 
benefits (e,g, meals and recreation), All State plan services must be provided in accordance with the 
respective regulations, Qualifications for providers of State plan services must at a minimum meet 
the qualification set forth in Federal regulations, 
This OIG study focused on beneficiary and facility records for services delivered in an ADHS setting 
during the last six months of2007 and reimbursed under the State plan. The review was focused on 
12 States that, as of December 31,2007, provided a State plan nursing-and therapy-focused adult day 
health benefit. The OIG draft report finds that (1) beneficiaries received at least one health service on 
60 percent of service days with nursing services being the services most commonly documented; (2) 
forty-three percent ofdocumented therapy services were provided by staff who lacked required 
oEI 090700500  MEDICAID SERVICES PROVIDED IN AN ADULT DAY HEALTH SETTING  30    
  
   
A P P E N D I X   ~   B  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  OEI-09-07-00500  MEDICAID SERVICES PROVIDED IN AN ADULT DAY HEALTH SETTING  31      
  
   
A P P E N D I X   ~   B  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  OEI-09-07-00500  MEDICAID SERVICES PROVIDED IN AN ADULT DAY HEALTH SETTING  32      
  
   
 A C K N O W L E D G M E N T S  
This report was prepared under the direction of Timothy Brady, 
Regional Inspector General for Evaluation and Inspections in the  
San Francisco regional office, and Michael Henry, Deputy Regional 
Inspector General.   
Camille Harper served as the team leader for this study.  Other 
principal Office of Evaluation and Inspections staff from the  
San Francisco regional office who contributed to the report include  
Loul Alvarez, Veronica Gonzalez, and Abby Lopez; central office staff 
who contributed include Sandy Khoury, Lyn Killman, and Robert 
Gibbons. 
 
  OEI-09-07-00500  MEDICAID SERVICES PROVIDED IN AN ADULT DAY HEALTH SETTING  33      
  
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of Department of Health & Human Services (HHS) 
programs, as well as the health and welfare of beneficiaries served by those programs.  This 
statutory mission is carried out through a nationwide network of audits, investigations, and 
inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying 
out their respective responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of fraud and misconduct related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI utilizes its resources 
by actively coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to criminal 
convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support for OIGs internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the health care industry concerning the anti-kickback statute and other OIG 
enforcement authorities.