Department of Health & Human Services 

OFFICE OF

INSPECTOR GENERAL

 

MEDICAID SERVICES PROVIDED 

IN AN ADULT DAY HEALTH 

SETTING 

 

Daniel R. Levinson 

Inspector General 

July 2011 

OEI-09-07-00500 
 

 

 

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INTRODUCTION EXECUTIVE SUMMARY

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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EXECUTIVE SUMMARY

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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EXECUTIVE SUMMARY

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. 
 

 

 TABLE OF CONTENTS

EXECUTIVE SUMMARY ................................ ..... i

INTRODUCTION ............................................ 1 

FINDINGS ................................................. 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

RECOMMENDATIONS ..................................... 22 

Agency Comments and Office of Inspector General Response.... 23 

APPENDIXES ............................................. 24 

A: Confidence Intervals ................................ . 24 

B: Agency Comments ................................... 30

ACKNOWLEDGMENTS ..................................... 33
 

 

 

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 INTRODUCTION

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 General’s Office. 
 

 

 

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INTRODUCTION

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 

individual’s 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 participant’s 

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

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. 

 

Section 1905(a) of the Social Security Act does not include adult day 

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 State’s Medicaid program.
 

 

 

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INTRODUCTION

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 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.

 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. 

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 individual’s 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 individual’s eligibility for the services.

10 Department of Health & Human Services, Assistant Secretary for Planning and 

Evaluation; K. Siebenaler, J. O’Keeffe, C. O’Keeffe, D. Brown, and B. Koetse, Regulatory 

Review of Adult Day Services: Final Report, August 2005, pp. 2–24. 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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INTRODUCTION

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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INTRODUCTION

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

 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.

 The 

proposed rule specified the types of services that would be eligible for 

Medicaid reimbursement under the rehabilitative benefit. In particular, 

it indicated that:

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

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 

 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. 

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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INTRODUCTION

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 Jersey’s 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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INTRODUCTION

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 General’s Office identified at least $600,000 in 

questionable billings by adult day health service centers.20

METHODOLOGY

 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. 

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 therapyfocused 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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INTRODUCTION

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 beneficiary’s 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 beneficiary’s 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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INTRODUCTION

progress notes, and flowcharts for the 6 months before the sampled 

service date;23

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. 

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. 

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),

• the center did not provide primarily nursing and therapy services to 

an elderly and/or disabled population (3 service days).

and

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.

24
 

 

 

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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 beneficiary’s 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 beneficiary’s 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 

beneficiary’s 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

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 

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.

27 Therapeutic activities received further review by a subject matter expert if they were 

mentioned in the beneficiary’s 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 CMS’s 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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INTRODUCTION

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, speechlanguage pathology, therapeutic activities, pharmacy, 

dietician/nutritionist education, and certain “other” services (e.g., 
 

 

 

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INTRODU CTION

psychiatric services) as health services.30 Nonhealth services were 

defined as recreational and social activities, assistance with ADLs,31

Limitations

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. 

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 nurse30 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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INTRODUCTION

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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 FINDINGS

Beneficiaries received at least one health service 

on 60 percent of service days

On approximately 60 percent 

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.

Table 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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FINDINGS

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 beneficiary’s mental status, or 

assessing medication side effects), whereas 52 percent were nonskilled 

services (e.g., conducting a pain assessment, checking a beneficiary’s 

blood sugar level, or monitoring a beneficiary’s 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

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 

 Typically, beneficiaries received therapy 

in addition to one or more nursing service(s). 

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.
 

 

 

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FINDINGS

occupational therapy services. Maintenance care generally refers to 

treatments and activities, often repetitive, that are planned by a 

licensed therapist to maintain a beneficiary’s 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-Band®36

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. 

 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.

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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FINDINGS

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. 

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. 

Table 2: Service Types Documented on Days With No Documented 

Health Services

Service Type Percentage of Service 

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.
 

 

 

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FINDINGS

Approximately 43 percent of therapy services were 

provided by staff who lacked required supervision

Based on available 

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

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.

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. 

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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FINDINGS

Table 3: Documentation of Qualifications and Supervision of 

Therapy Staff

Therapy Documentation Physical 

Therapy

Occupational 

Therapy

Staff provided service requiring supervision; records 

contain no documentation that supervision was available 54% 32%

Service directly provided by qualified staff 29% 33%

Staff provided service requiring supervision; records 

contain documentation that supervision was available 0% 16%

Staff qualifications not documented/description of 

qualifications inadequate 12% 13%

Staff qualifications illegible 6% 6%

Service provided by staff performing beyond the scope 

of State license (i.e., staff prohibited from providing 

service)

0% 1%

 Total* 100% 100%

Source: OIG analysis of adult day health medical review results, 2010.

*Totals do not equal 100 percent because of rounding.

Documentation included timely assessments, but in 

some cases it lacked appropriate physician orders or 

was inconsistent with plans of care

Records associated with 

approximately 90 percent 

of service days included 

assessments conducted 

before services began. 

These assessments evaluated each beneficiary’s need for adult day 

health care and provided information about what services would be 

included in the beneficiary’s 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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FINDINGS

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%

Source: OIG analysis of adult day health medical review results, 2010.
 

 

 

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 RECOMMENDATIONS

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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RECOMMENDATIONS

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

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

 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.

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 CMS’s 

technical comments. For the full text of CMS’s comments, see 

Appendix B.

41 We requested records from 303 health centers for the 400 sampled service days.
 

 

 

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 APPENDIX ~ A

Table 1: Confidence Intervals

Estimate Description Sample Size Point 

Estimate

95-Percent 

Confidence Interval

Percentage of service days on which beneficiaries received a documented 

health service 300 service days 60.3% 54.7%–65.7%

Average number of services documented each service day 300 service days 9.4 8.2–10.7

Average number of health services documented each service day with at 

least one health service 181 service days 11.5 9.9–13.0

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 

documented 300 service days 28.7% 23.8%–34.1%

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 

living (ADL) were documented 300 service days 26.7% 21.9%–32.0% 

Percentage of service days on which social work services were 

documented

300 service days 19.3% 15.2%–24.2% 

Percentage of service days on which recreational and/or social activities 

were documented 

300 service days 17.7% 13.7%–22.4%

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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APPENDIX ~ A

Table 1: Confidence Intervals (Continued)

Estimate description Sample Size

Point 

Estimate

95-Percent 

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 

documented 

300 service days 13.3% 9.9%–17.7%

Percentage of service days on which medication administration was 

documented 300 service days 11.7% 8.5%–15.8%

Percentage of service days on which monitoring of food intake was 

documented

300 service days 10.7% 7.6%–14.7%

Percentage of service days on which nursing care was documented with 

at least one other service

300 service days 49.3% 43.7%–55.0% 

Percentage of service days on which beneficiaries received physical 

and/or occupational therapy services, but no nursing services 300 service days 1.0% 0.3%–3.1% 

Percentage of service days on which only nursing services were 

documented 300 service days 9.7% 6.8%–13.6%

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 

documented 300 service days 28.7% 23.8%–34.1%

continued on next page
 

 

 

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APPENDIX ~ A

Table 1: Confidence Intervals (Continued)

Estimate description Sample Size

Point 

Estimate

95-Percent 

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 

and occupational therapy 300 service days 25.0% 20.4%–30.2%

Percentage of documented physical therapy services that were 

maintenance services

360 services 88.1% 80.5%–92.9%

Percentage of documented occupational therapy services that were 

maintenance services

341 services 79.2% 69.0%–86.7%

Percentage of documented physical therapy services that were 

restorative/rehabilitative services

360 services 10.0% 5.6%–17.3%

Percentage of documented occupational therapy services that were 

restorative/rehabilitative services

341 services 17.0% 10.2%–27.0%

Percentage of service days on which beneficiaries received no

documented health services

300 service days 39.7% 34.3%–45.3%

Percentage of service days on which meals and/or snacks were the only 

documented services 

300 service days 34.0% 28.8%–39.6%

Of service days with no documented health service, percentage on which 

only meals and/or snacks were documented 

119 service days 85.7% 78.2%–90.9%

Of service days with no documented health service, percentage on which 

only recreational/social activities were documented 119 service days 5.9% 2.8%–11.9%

continued on next page
 

 

 

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APPENDIX ~ A

Table 1: Confidence Intervals (Continued)

Estimate description Sample Size

Point 

Estimate

95-Percent 

Confidence Interval

Of service days with no documented health service, percentage on which 

no services were documented 

119 service days 3.4% 1.3%–8.6%

Of service days with no documented health service, percentage on which 

only meals and/or snacks and recreational activities were 

documented

119 service days 0.8% 0.1%–5.8%

Of service days with no documented health service, percentage on which 

only meals and/or snacks and assistance with ADLs were 

documented 

119 service days 0.8% 0.1%–5.8%

Of service days with no documented health service, percentage on which 

only recreational/social activities and assistance with ADLs were 

documented 

119 service days 0.8% 0.1%–5.8%

Of service days with no documented health service, percentage on which 

only social work services were documented 119 service days 0.8% 0.1%–5.8%

Of service days with no documented health service, percentage on which 

only meals and/or snacks and undetermined services were documented 

119 service days 0.8% 0.1%–5.8%

Of service days with no documented health service, percentage on which 

only “other,” nonspecific, services were documented 

119 service days 0.8% 0.1%–5.8%

Percentage of service days on which beneficiaries received no 

documented services 

300 service days 1.3% 0.5%–3.5%

Of documented physical therapy services, percentage that were provided 

by staff who lacked required supervision

360 services 43.2% 33.9%–53.0%

Of documented physical therapy services, percentage that did not include 

documentation of necessary supervision

341 services 53.6% 41.5%–65.3%

Of documented occupational therapy services, percentage that did not 

include documentation of necessary supervision

341 services 32.3% 22.5%–43.8%

continued on next page
 

 

 

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APPENDIX ~ A

Table 1: Confidence Intervals (Continued)

Estimate description Sample Size

Point 

Estimate

95-Percent 

Confidence Interval

Of documented physical therapy services, percentage that were directly 

performed by qualified staff

360 services 28.6% 19.3%–40.2%

Of documented occupational therapy services, percentage that were 

directly performed by qualified staff

341 services 32.6% 23.1%–43.7%

Of documented occupational therapy services, percentage that were

performed by staff who required supervision and for which appropriate 

documentation of supervision is available in beneficiary and/or facility 

records

341 services 15.8% 10.0%–24.2%

Of physical therapy services, percentage that have missing/inadequate 

description of provider qualifications

360 services 11.9% 5.6%–23.8%

Of occupational therapy services, percentage that have 

missing/inadequate description of provider qualifications

341 services 12.9% 6.9%–22.9%

Of physical therapy services, percentage that list illegible provider 

qualifications

360 services 5.8% 1.9%–16.6%

Of occupational therapy services, percentage that list illegible provider 

qualifications

341 services 5.6% 2.1%–14.2%

Of documented occupational therapy services, percentage that were

provided by staff performing beyond the scope of their State licenses

341 services 0.9% 0.2%–3.8%

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 

treatment began 300 service days 8.3% 5.7%–12.1%

Of service days, percentage for which no assessment was included in 

records 300 service days 1.3% 0.5%–3.5%

Of service days, percentage for which assessment did not appear to be 

completed by the appropriate staff or for the correct admission date 300 service days 0.7% 0.2%–2.6%

continued on next page
 

 

 

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APPENDIX ~ A

Table 1: Confidence Intervals (Continued)

Statistic Sample Size

Point 

Estimate

95-Percent 

Confidence Interval

Of service days, percentage that did not include a dated or timely 

physician order

300 service days 21.3% 17.0%–26.4%

Of service days, percentage with a physician order signed after treatment 

began, but within 2 months

300 service days 11.0% 7.9%–15.1% 

Of service days, percentage with a physician order signed after 2 months 

but within 1 year

300 service days 5.7% 3.5%–8.9%

Of service days, percentage with a physician order signed more than 

1 year after treatment began 300 service days 1.0% 0.3%–3.1%

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 

most recent plan of care

2,065 services 21.9% 18.2%–26.0%

Of nursing services, percentage that were not included in the most recent 

plan of care 1,364 services 26.8% 22.2%–32.1%

Of physical therapy services, percentage that were not included in 

the most recent plan of care

360 services 13.6% 8.7%–20.6%

Of occupational therapy services, percentage that were not included 

in the most recent plan of care

341 services 10.8% 5.7%–19.8%

Source: Office of Inspector General analysis of adult day health medical review results, 2010.
A P PEN D x 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-09-07·00500) 

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 of documented therapy services were provided by staff who lacked required 

oEI· 09·07·00500 MEDICAID SERVICES PROVIDED IN AN ADULT DAY HEALTH SETTING 30 
 

 

 

OEI - 0 9 - 0 7 - 00500 MEDICAID S ERVICES P ROVIDED IN AN ADULT DAY HEALTH S ETTING 31

APPENDIX ~ B
 

 

 

OEI - 0 9 - 0 7 - 00500 MEDICAID S ERVICES P ROVIDED IN AN ADULT DAY HEALTH S ETTING 32

APPENDIX ~ B
 

 

 

OEI - 0 9 - 0 7 - 00500 MEDICAID S ERVICES P ROVIDED IN AN ADULT DAY HEALTH S ETTING 33

 ACKNOWLEDGMENTS

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.
 

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 OIG’s 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.