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DEPARTMENT OF HEALTH A...I\JD  SERVICES
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OFFICE OF INSPECTOR GENERAL 
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.Cifl'am 	 WASHINGTON, DC  20201 
IJUL 0 1 2013 
TO: 	 Marilyn Tavenner 
Administrator 
Centers for Medicare & Medicaid Services 
FROM:  Stuart Wrigllt 
Deputy Inspector General 
for Evaluation and Inspections 
SUBJECT: 	 Memorandum Report:  Some States Improperly Restrict Eligibility for 
Medicaid Mandatory Home Health Services, OEI-07-13-00060 
This memorandum report assesses the extent to which States have policies that 
improperly restrict eligibility for Medicaid mandatory home health services to 
homebound individuals.  Under the mandatory home health benefit, States must provide 
certain home health services to Medicaid beneficiaries who are entitled to nursing facility 
care.  Federal regulations prohibit the arbitrary denial or reduction of the amount, 
duration, and scope ofa required service on the basis of a beneficiary's diagnosis, type of 
illness, or condition.  In a 2000 policy letter, the Centers for Medicare & Medicaid 
Services (CMS ) notified State Medicaid agencies that restricting eligibility for home 
health services to homebound individuals violates these regulations because (1) the scope 
of the medical assistance made available to non-homebound individuals is reduced and 
(2) such restrictions result in services being denied on the basis of a beneficiary's 
condition (i.e. , not being homebound). 
SUMMARY 
For all States, we reviewed the sections ofthe Medicaid State plans (State plans) and 
current State policies that define eligibility for the mandatory home health benefit. 
Eleven States have improper eligibility restrictions on the mandatory home health benefit 
in the policy documents we reviewed.  The written policy for one of these eleven States 
made exceptions to its restrictions in certain circumstances.  For two other States, staff 
explained that the restrictions had been incorrectly included in their States' policies and 
were not being enforced.  Page 2  Marilyn Tavenner 
 
BACKGROUND 
 
Medicaid Home Health Services 
Sections 1902(a)(10)(D) and 1905(a)(7) of the Social Security Act (SSA) establish the 
mandatory home health benefit in the Medicaid program.  Under the mandatory home 
health benefit, States must provide the following services to Medicaid beneficiaries who 
are entitled to nursing facility care:  nursing care, home health aides, and medical 
supplies, equipment, and appliances.1  Under this benefit, States may also provide 
optional home health services, including physical therapy, occupational therapy, and 
speech pathology and audiology services.  States must offer mandatory home health 
services to Medicaid beneficiaries who are entitled to nursing home care, but States may 
not condition receipt of services on the need for institutional care.2  In 2011, States spent 
$4.9 billion on mandatory home health services.3, 4  
 
Medicaid State Plans 
State plans detail how each State administers its Medicaid program, what services will be 
covered for which eligibility groups, and how services will be paid.  To change any part 
of an existing State plan, a State must submit a State plan amendment (SPA) to the 
appropriate CMS regional office.  CMS reviews the SPA and either approves it or 
communicates with the State regarding necessary changes.5  Once an SPA is approved, it 
becomes part of the State plan. 
 
State Restrictions on Eligibility for Home Health Services 
Federal regulations require that Medicaid services made available to any categorically or 
medically needy individual shall not be less in amount, duration, or scope than the 
medical assistance made available to any other such individual.6  Furthermore, Federal 
regulations prohibit the arbitrary denial or reduction of the amount, duration, and scope 
of a required service on the basis of a beneficiarys diagnosis, type of illness, or 
condition.7   
                                                 
1 SSA  1902(a)(10)(D) [42 U.S.C. 1396a] and 1905(a)(7) and 42 CFR  440.70 and 441.15.  For the 
purpose of this report, we refer to all services furnished under these authorities as mandatory home health 
services.  
2 42 CFR  441.15(c).  Mandatory home health services must be covered for all individuals who are 
eligible for nursing facility care as defined in the State Medicaid plan.  States cannot limit these services to 
beneficiaries whose condition is such that they require nursing home care.  
3 This was the most recent complete data on Medicaid home health expenditures available at the time of 
this report.  CMS, Financial Management Report for FY 2002 through FY 2011, total computable 
expenditures for home health services.  
4 States can also provide home health services through Medicaid waivers.  Under waiver authority, a State 
can define home health services and identify target populations in a way that would be prohibited for 
mandatory home health services.  For example, under a  1915(c) home- and community-based services 
waiver, a State would provide services only to those who qualify for nursing home care, could include 
home services not generally covered under 42 CFR  441.15, and could waive the comparability 
requirements at 42 CFR  440.240(b) to alter the scope of services for the target population.  For this 
reason, our report focuses on the mandatory State Plan home health benefit and excludes home health 
services furnished under other Medicaid authorities. 
5 42 CFR  430.14, 430.15, and 430.16. 
6 SSA  1902(a)(10)(B); 42 CFR  440.240(b). 
7 42 CFR  440.230(c). 
Restrictions of Home Health Services to Homebound Individuals (OEI-07-13-00060)  Page 3  Marilyn Tavenner 
 
 
In July 2000, CMS released a State Medicaid Director letter summarizing its efforts to 
review Federal policies to ensure fulfillment of the Americans with Disabilities Act.8  
This letter stated that, although Medicare requires beneficiaries to be homebound to 
qualify for home health services,9 imposing a homebound requirement on Medicaid home 
health benefits violates Medicaid regulations related to amount, duration, and scope of 
services at 42 CFR  440.230 and comparability of services at 42 CFR  440.240.  In 
July 2011, CMS published a Notice of Proposed Rulemaking that would revise Medicaid 
regulations to clarify that home health services cannot be restricted to individuals who are 
homebound or to services furnished in the home; the rule had not yet been finalized at the 
time of this report.10   
 
CMS has taken action regarding improper eligibility restrictions in at least one State.  
CMS notified the Missouri Medicaid program in 2005 and again in 2009 that its 
restriction of home health services to homebound individuals was a violation of Federal 
law.  In February 2010, CMS notified the State that it intended to withhold a portion of 
Federal reimbursement for home health services until the State submitted (and CMS 
approved) an SPA to bring it into compliance with Federal requirements.11  Missouri 
submitted an amendment to its State plan removing the restriction.  
 
METHODOLOGY 
 
This evaluation included all 50 States, the District of Columbia, and 3 Territories:  
Puerto Rico, Guam, and the U.S. Virgin Islands.12  (For the purpose of this report, we 
refer to these 54 entities as States.)  In January and February 2013, we asked each State to 
provide us with copies of its policies defining eligibility for mandatory home health 
services.13  These policies included State administrative codes, provider manuals, and 
other policy documents.  Two States provided additional information regarding their 
written policies in response to our request.  We also asked each of the 10 CMS regional 
offices to provide us with copies of the sections of the current State plan that defined 
eligibility for mandatory home health services for each of the States within the offices 
                                                 
8 CMS, State Medicaid Director letter, Olmstead Update No. 3, July 25, 2000. 
9 42 CFR  409.42(a).  The Medicare Benefit Policy Manual explains that patients must be confined to the 
home (i.e. homebound)meaning that leaving home would require a considerable and taxing effortto 
qualify for Medicare home health services.  CMS, Medicare Benefit Policy Manual, Pub. No. 100-2, ch. 7, 
 30.1.1. 
10 76 Fed. Reg. 41032, 41033, and 41038 (July 12, 2011).  The proposed rule reflects a 1997 2nd Circuit 
Court of Appeals decision that found that the State could not limit coverage of home health services to 
those provided at the individuals residence.  See Skubel v. Fuoroli, 113 F. 3d 330 (2d Circ. 1997).  
11 75 Fed. Reg. 10289 (March 5, 2010). 
12 The remaining two Territoriesthe Commonwealth of the Northern Marianas Islands and 
American Samoawere excluded from this evaluation.  These two Territories have waivers under 
 1902(j) of the SSA that waive all requirements of Title XIX except three provisions relating to the 
Federal Medical Assistance Percentage, a dollar limit specific to each Territory, and payments for medical 
assistance as defined by  1905(a) of the SSA.  Thus, the requirements prohibiting eligibility restrictions do 
not apply to these two Territories.  The 1902(j) waiver is available only to these two Territories. 
13 We collected only documents related to the mandatory State Plan home health benefit; we excluded 
home health services furnished under other Medicaid authorities from this evaluation. 
Restrictions of Home Health Services to Homebound Individuals (OEI-07-13-00060)  Page 4  Marilyn Tavenner 
 
jurisdiction.  We reviewed all of these documents to determine whether any State had 
improperly restricted eligibility for mandatory home health services.  
 
Results of this study are based on our review of the State plans and policy documents 
provided in response to our request.  Our methodology was based on the policy 
documents that States submitted in response to our request; we did not question 
individual States about whether their documented restrictions were being enforced. 
 
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. 
  
RESULT 
  
Eleven States have policies that improperly restrict eligibility for mandatory home 
health services to homebound individuals  
Eleven States have languageone in its State plan and 10 in other State policy 
documentsthat restricts eligibility for the mandatory home health benefit to homebound 
individuals in violation of CMSs interpretation of the applicable statute and regulation.    
These 11 States are Alabama, Arkansas, Indiana, Montana, Nebraska, New Mexico, 
North Dakota, Pennsylvania, South Dakota, Utah, and West Virginia.  With the exception 
of West Virginia, these States apply the homebound restrictions to all services provided 
through the mandatory home health benefit.  West Virginia makes exceptions to the 
homebound restriction when certain skilled medical procedures for adults or skilled 
services for infants and children are necessary.  In general, the 11 States restrictions on 
eligibility for home health services were similar to Medicares restriction that individuals 
must be confined to the home, meaning that leaving home would require a 
considerable and taxing effort.14    
 
Two of the eleven States, New Mexico and Utah, stated in their responses to our request 
that although their policies restricted eligibility for home health services to homebound 
individuals, those policies were incorrect and were not being enforced.  New Mexico 
staff explained that an SPA removing the homebound restriction was being drafted but 
had not been submitted to CMS.  Utah staff explained that the homebound restriction was 
incorrectly included in the provider manual; they further stated that the restriction had 
never been enforced and would be corrected in the next revision of the provider manual. 
 
CONCLUSION 
 
According to the documents that States supplied in response to our request, 11 States 
have policies that improperly restrict eligibility for their mandatory home health benefit 
to homebound individuals.  Such restrictions violate CMSs interpretation of the 
requirements of  1902(a)(10)(B) of the SSA and Federal regulation at 
42 CFR  440.230(c) because the scope of the medical assistance made available to 
non-homebound individuals is reduced.  Such restrictions further violate CMSs 
                                                 
14 42 CFR  409.42(a); CMS, Medicare Benefit Policy Manual, Pub. No. 100-2, ch. 7,  30.1.1. 
Restrictions of Home Health Services to Homebound Individuals (OEI-07-13-00060)  Page 5  Marilyn Tavenner 
 
interpretation of Federal requirements at 42 CFR  440.240(b) because they deny 
services on the basis of a beneficiarys condition (i.e., not being homebound).  We 
encourage CMS to finalize its proposed rule clarifying that home health services cannot 
be restricted to individuals who are homebound or to services furnished in the home.  
After finalizing the proposed rule, CMS may want to consider issuing guidance specific 
to home health services and homebound eligibility restrictions, explaining why such 
restrictions are improper. 
 
This report is being issued directly in final form because it contains no recommendations.  
If you have comments or questions about this report, please provide them within 60 days.  
Please refer to report number OEI-07-13-00060 in all correspondence. 
 
 
 
 
  
Restrictions of Home Health Services to Homebound Individuals (OEI-07-13-00060)