[Federal Register Volume 76, Number 133 (Tuesday, July 12, 2011)]
[Proposed Rules]
[Pages 41032-41039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-16937]



[[Page 41032]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 440

[CMS 2348-P]
RIN 0938-AQ36


Medicaid Program; Face-to-Face Requirements for Home Health 
Services; Policy Changes and Clarifications Related to Home Health

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise the Medicaid home health 
service definition as required by section 6407 of the Affordable Care 
Act to add a requirement that physicians document the existence of a 
face-to-face encounter (including through the use of telehealth) with 
the Medicaid eligible individual within reasonable timeframes. This 
proposal would align the timeframes with similar regulatory 
requirements for Medicare home health services in accordance with 
section 6407 of the Affordable Care Act and reflects CMS' commitment to 
the general principles of the President's Executive Order 13563 
released January 18, 2011, entitled ``Improving Regulation and 
Regulatory Review.'' In addition, this rule proposes to amend home 
health services regulations to clarify the definitions of included 
medical supplies, equipment and appliances, and clarify that States may 
not limit home health services to services delivered in the home, or to 
services furnished to individuals who are homebound.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. September 12, 2011.

ADDRESSES: In commenting, please refer to file code CMS-2348-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.

    2. By regular mail. You may mail written comments to the following 
address ONLY:
Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Attention: CMS-2348-P, P.O. Box 8016, Baltimore, MD 
21244-8016.

    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-2348-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 
20201.

    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal Government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.

    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-7195 in advance to schedule your 
arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    Submission of comments on paperwork requirements. You may submit 
comments on this document's paperwork requirements by following the 
instructions at the end of the ``Collection of Information 
Requirements'' section in this document.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Melissa Harris, (410) 786-3397.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to 
view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

I. Background

A. General Information

    Title XIX of the Social Security Act (the Act) requires that, in 
order to receive Federal Medicaid matching funds, a State must offer 
certain basic services to the categorically needy populations specified 
in the Act. Home health care for Medicaid-eligible individuals who are 
entitled to nursing facility services is one of these mandatory 
services. Individuals ``entitled to'' nursing facility services include 
the basic categorically needy populations that receive the standard 
Medicaid benefit package, and can include medically needy populations 
if nursing facility services are offered to the medically needy within 
a State. Home health services include skilled nursing, home health aide 
services, medical supplies, equipment, and appliances, and may include 
therapeutic services. Current Medicaid regulations require an 
individual's physician to order home health services as part of a 
written plan of care reviewed every 60 days.

B. Summary of New Medicare Home Health Face-to-Face Statutory 
Requirements

    Section 6407 of the Patient Protection and Affordable Care Act of 
2010 (the Affordable Care Act), (Pub. L. 111-148, enacted on March 23, 
2010), as amended by section 10605 of the Affordable Care Act, affects 
the home health benefit under both the Medicare and Medicaid programs.
    Section 6407(a) of the Affordable Care Act (as amended by section 
10605 of the Affordable Care Act) added new requirements to section 
1814(a)(2)(C) of

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the Act under Part A of the Medicare program, and section 1835(a)(2)(A) 
of the Act, under Part B of the Medicare program, that the physician, 
or certain allowed nonphysician practitioners (NPPs), document a face-
to-face encounter with the individual (including through the use of 
telehealth, subject to the requirements in section 1834(m) of the Act), 
prior to making a certification that home health services are required 
under the Medicare home health benefit. Section 1814(a)(2)(C) of the 
Act indicates that in addition to a physician, a nurse practitioner or 
clinical nurse specialist (as those terms are defined in section 
1861(aa)(5) of the Act) who is working in collaboration with the 
physician in accordance with State law, or a certified nurse-midwife 
(as defined in section 1861(gg) of the Act, as authorized by State 
law), or a physician assistant (as defined in section 1861(aa)(5) of 
the Act), under the supervision of the physician, may conduct the face-
to-face encounters prior to the start of home health services.
    Section 6407(b) of the Affordable Care Act amended section 
1834(a)(11)(B) of the Act to require documentation of a similar face-
to-face encounter with a physician or specific NPPs by a physician 
ordering durable medical equipment (DME). The NPPs authorized to 
conduct a face-to-face encounter on behalf of a physician are the same 
for this provision as for the provision described above, with one 
exception. We interpret sections 6407(b) and 6407(d) of the Affordable 
Care Act to prohibit certified nurse-midwives from conducting the face-
to-face encounter prior to the physician ordering DME. The timing of 
this face-to-face encounter is specified as being within the 6-month 
period preceding the written order for DME, or other reasonable 
timeframe specified by the Secretary. This provision also maintains the 
role of the physician in the actual ordering of DME.

C. Application of Home Health Face-to-Face Requirements to Medicaid

    Section 6407(d) of the Affordable Care Act provides that the 
requirements for face-to-face encounters in the provisions described 
above ``shall apply in the case of physicians making certifications for 
home health services under title XIX of the Social Security Act in the 
same manner and to the same extent as such requirements apply in the 
case of physicians making such certifications under title XVIII of such 
Act.'' The purpose of this regulation is to implement that statutory 
directive.
    In implementing the face-to-face encounter requirements of section 
6407 of the Affordable Care Act, we take into consideration the 
existing regulatory requirements under Sec.  440.70 that provide that a 
physician must order an individual's services under the Medicaid home 
health benefit. We read the term ``order'' to be synonymous with the 
Medicare term ``certify.'' For purposes of this rule, we use the term 
``order'' in place of the Affordable Care Act's use of ``certify.''
    We do not view implementation of section 6407 of the Affordable 
Care Act as supplanting the existing Medicaid regulatory requirements 
related to physician orders but as consistent with those requirements. 
The provisions of section 6407 of the Affordable Care Act make clear 
that the physician's order must be based on a face-to-face encounter. 
In addition, section 6407 of the Affordable Care Act provides that 
specific NPP may perform the face-to-face encounter with the individual 
in lieu of the physician, and inform the physician making the initial 
order for service under the Medicaid home health benefit.
    Consistent with that view, in the proposed regulation, we would 
provide that the physician must document the face-to-face encounter 
regardless of whether the physician himself or herself or one of the 
permitted NPPs performed the face-to-face encounter. The timing of this 
face-to-face encounter is specified as being within the 6-month period 
preceding the written order for home health services, or other 
reasonable timeframe specified by the Secretary.
    Similarly, in implementing the requirements under section 6407(b) 
of the Affordable Care Act, relating to DME, we take into account 
existing Medicaid regulatory requirements under Sec.  440.70 requiring 
physician orders. Because DME is not a term used in Medicaid in the 
same manner as in Medicare, we use the Medicaid term ``medical 
supplies, equipment and appliances'' or the shortened version ``medical 
equipment.'' The NPPs authorized to conduct a face-to-face encounter on 
behalf of a physician are the same for this provision as for the 
provision described above, with one exception. Certified nurse-midwives 
are not permitted to conduct the face-to-face encounter prior to the 
physician ordering medical equipment. Therefore, we are proposing to 
amend the Medicaid regulations at Sec.  440.70 to incorporate both the 
general home health and the medical equipment face-to-face 
requirements.

D. Other Medicaid Home Health Policy Changes

1. Clarification That Home Health Services Cannot Be Restricted to 
Individuals Who Are Homebound or to Services Furnished in the Home
    We are proposing to incorporate in regulation that home health 
services may not be subject to a requirement that the individual be 
``homebound.'' In addition, we are proposing to clarify that home 
health services cannot otherwise be restricted to services furnished in 
the home itself.
    On July 25, 2000, we issued a letter to State Medicaid Directors, 
Olmstead Update No: 3, in which we discussed Federal policies relevant 
to State efforts to comply with the requirements of the Americans with 
Disabilities Act (ADA) in light of the Supreme Court decision in 
Olmstead v. L.C., 527 U.S. 581 (1999). In attachments to that letter, 
we set forth specific policy clarifications to allow States more 
flexibility to serve individuals with disabilities in various ways and 
in different settings.
    Attachment 3-g of the letter: ``Prohibition of Homebound 
Requirements in Home Health'' clarified that the use of a ``homebound'' 
requirement under the Medicaid home health benefit violates Federal 
regulatory requirements at Sec.  440.230(c) and Sec.  440.240(b). These 
requirements provide that mandatory benefits must be sufficient in 
amount, duration and scope to reasonably achieve their purpose, may not 
be arbitrarily denied or reduced in scope based on diagnosis, type of 
illness, or condition, and that the same amount, duration and scope 
must be available to any individual within the group of categorically 
needy individuals and within any group of medically needy individuals. 
In the attachment, we stated that the restriction of home health 
services to individuals who are homebound to the exclusion of other 
individuals in need of these services ignores the reality that 
individuals with disabilities can and do live and function in the 
community. We further noted that developments in technology and service 
delivery made it possible for individuals with even the most severe 
disabilities to participate in a wide variety of activities in the 
community with appropriate supports. We also expressed the importance 
of ensuring that Medicaid is available to provide medically necessary 
home health services to individuals in need of those services who are 
not homebound and continue to be an important part of efforts to offer 
individuals with disabilities services in the most

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integrated setting appropriate to their needs, in accordance with the 
ADA.
    We are clarifying in this rule that Medicaid home health services 
may not be limited to services furnished in the home. This policy 
reflects prior court cases on the subject. In Skubel v. Fuoroli, 113 
F.3d 330 (2d. Cir. 1997) the court found that the Medicaid statute did 
not address the site of care for the mandatory home health benefit. The 
court found that the State could not limit coverage of home health 
services to those provided at the individual's residence. In 1990, the 
same court ruled invalid an interpretation that limited the provision 
of private duty nursing services to an individual's residence. The 
case, Detsel v. Sullivan, 895 F.2d 58 (2d Cir.1990), involved children 
suffering from severe medical conditions. Following the Detsel case, 
CMS, then the Health Care Financing Administration, ultimately adopted 
the court's standard and issued nationwide guidance eliminating the at-
home restriction on private duty nursing. To date, we have not issued 
similar guidance requiring nationwide adoption of the Skubel ruling. We 
are using our authority through this rulemaking opportunity to do so.
2. Clarification of the Definition of Medical Supplies, Equipment and 
Appliances
    An important component of the Medicaid home health benefit is 
medical supplies, equipment and appliances, under Sec.  447.70(b)(3). 
The current wording of the regulation does not further define these 
terms, except to indicate that these items should be ``suitable for use 
in the home.'' Although this phrase could be read to refer only to the 
type of items included in the benefit, it has been susceptible to 
reading as a prohibition on use of covered items outside the home. We 
are using this opportunity to revise that phrase to make clear that it 
is not a limitation on the location in which items are used, but rather 
refers to items that are necessary for everyday activities and not 
specialized for an institutional setting. Thus we would indicate that 
these items must be ``suitable for use in any non-institutional setting 
in which normal life activities take place.'' This would clarify that 
although States may continue to establish medical necessity criteria to 
determine the authorization of these items, States may not deny 
requests for these items based on the grounds that they are for use 
outside of the home.
    Current Medicaid regulations do not contain any specific definition 
of medical supplies, equipment, and appliances under the home health 
benefit, other than the language discussed in the prior paragraph. 
States have adopted reasonable definitions of those terms, for example, 
based on the Medicare definition. But in the absence of a generally 
applicable definition of the term, there has been confusion as to the 
proper scope of the benefit.
    We believe that a consistent approach to categorizing home health 
medical supplies, equipment, and appliances will ensure beneficiaries 
are receiving needed items and provide clear and consistent guidance to 
States to ensure the use of the appropriate benefit category. We are 
now taking this opportunity to propose criteria defining home health 
supplies, equipment, and appliances, to better align with the Medicare 
program's definition of durable medical equipment found at Sec.  
414.202. We propose that supplies are defined as ``health care related 
items that are consumable or disposable, or cannot withstand repeated 
use by more than one individual.'' We propose that medical equipment 
and appliances are ``items that are primarily and customarily used to 
serve a medical purpose, generally not useful to an individual in the 
absence of an illness or injury, can withstand repeated use, and can be 
reusable or removable.''
    We believe these standard definitions will ensure that such items 
will be available to all who are entitled to the home health benefit, 
and not restricted to individuals eligible for targeted benefits 
through home and community-based services (HCBS) waivers or the section 
1915(i) HCBS State Plan option. Items that meet the criteria for 
coverage under the home health benefit must be covered as such. States 
will not be precluded from covering items meeting this definition 
through a section 1915(c) HCBS waiver service, such as a home 
modification, or through a section 1915(i) State Plan option. However, 
the State must also offer those items as home health supplies, 
equipment and appliances.
3. Other Issues
    We note that we are considering whether other clarifications to the 
home health regulations are warranted. In particular, we are 
considering whether it would be useful to include language to reflect 
the policies set forth in a September 4, 1998 letter to State Medicaid 
Directors, responding in part to a Second Circuit decision in Desario 
v. Thomas, 139 F. 3d 80 (1998), about the use of lists or other 
presumptions in determining coverage of items under the home health 
benefit for medical equipment. In that letter, we indicated that a 
State could use such lists or presumptions, but must provide 
individuals the opportunity to rebut the list or presumption with a 
process that employs reasonable and specific criteria to assess 
coverage for an item based on individual medical needs, and determine 
whether the list or presumption is based on an arbitrary exclusion 
based on diagnosis, type of illness, or condition. We have not proposed 
any language to reflect this policy in part because the principles at 
issue are not specific to home health medical equipment. We invite 
comment on this issue.
    In addition, in the May 5, 2010 Federal Register (75 FR 24437), we 
issued the ``Medicare and Medicaid Programs: Changes in Provider and 
Supplier Enrollment, Ordering and Referring, and Documentation 
Requirements; and Changes in Provider Agreements'', interim final rule 
which was effective on July 6, 2010. Although we have not incorporated 
changes to the scope of providers that may order medical supplies, 
equipment and appliances in the Medicaid program, as section 6405(a) of 
the Affordable Care Act was not applicable to Title XIX, we are 
specifically soliciting comments through this rule on the merits of 
doing so.

II. Provisions of the Proposed Regulations

    Please note that although the Affordable Care Act uses the term 
``individual'' to refer to the Medicaid beneficiary, throughout this 
proposed rule we have used ``recipient'' to mirror the regulation text 
in the current Medicaid home health regulations. At this time, we do 
not intend to modify this term.
    For the reasons discussed above, we propose to modify Sec.  
440.70(b)(3) to say the following: ``Medical supplies, equipment and 
appliances suitable for use in any non-institutional setting in which 
normal life activities take place.''
    In Sec.  440.70(b)(3)(i) and (ii), we propose revising the current 
text to define what constitutes medical supplies, equipment, and 
appliances. We propose to indicate that supplies are defined as 
``health care related items that are consumable or disposable, or 
cannot withstand repeated use by more than one individual.'' We propose 
to indicate that medical equipment and appliances are ``items that are 
primarily and customarily used to serve a medical purpose, generally 
not useful to an individual in the absence of an illness or injury, can 
withstand repeated use, and can be reusable or removable.'' We

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are specifically soliciting comment on these proposed provisions.
    For the reasons discussed above, we propose to modify Sec.  
440.70(c), to add the following text to the end of the current 
provision: ``Nothing in this section should be read to prohibit a 
recipient from receiving home health services in any non-institutional 
setting in which normal life activities take place.'' Although the 
Court indicated that individuals would be limited to the same number of 
service hours they would have received if the home health services were 
provided only in their place of residence, in an effort to not limit 
the ability of States to offer a more robust home health benefit, we 
propose to allow States the option to authorize additional services or 
hours of services to account for this new flexibility. We also propose 
to add more text at the end of this provision as follows: ``Additional 
services or service hours may, at the State's option, be authorized to 
account for medical needs that arise in these settings''. This will 
incorporate both the Skubel and Olmstead decisions into the provision 
of home health services. This State flexibility would be applied to the 
State's Medicaid program as a whole, and would not be a person-specific 
flexibility. State medical necessity criteria would continue to be 
applied uniformly to all Medicaid individuals. We note that any such 
additional hours of service that are authorized by the State would be 
matched at the State's current Federal Medical Assistance Percentage 
(FMAP).
    The remainder of this section pertains to proposed changes to Sec.  
440.70 to incorporate provisions of the Affordable Care Act.
    Section 6407 of the Affordable Care Act requires, as a condition 
for payment for home health services, documentation of a face-to-face 
encounter prior to an order for such services. Section 6407 of the 
Affordable Care Act requires that the timing of the face-to-face 
encounter for home health services must occur within the 6-month period 
preceding certification, or other reasonable timeframe determined by 
the Secretary. Based on the same reasoning set out in the Medicare 
final rule, Medicare Program; Home Health Prospective Payment System 
Rate Update for Calendar Year 2011; Changes in Certification 
Requirements for Home Health Agencies and Hospices as published in the 
November 17, 2010, Federal Register, we propose to determine a 
reasonable timeframe for the face-to-face encounter that is shorter 
than 6 months. The statutory goal is to achieve greater physician 
accountability in ordering home health services. To achieve this goal, 
the encounter must occur close enough to the start of home health 
services to ensure that the clinical conditions exhibited by the 
recipient during the encounter are related to the primary reason for 
the recipient's need for home health services. As such, we believe that 
encounters would need to occur closer to the start of home health 
services rather than the 6-month period initially indicated, but not 
required by the Affordable Care Act.
    Consistent with the Medicare program's implementation of this 
provision, we propose to indicate in a new Sec.  440.70(f)(1) that for 
the initial ordering of home health services, the physician must 
document that a face-to-face encounter that is related to the primary 
reason the individual requires home health services has occurred no 
more than 90 days prior to the start of services under the Medicaid 
home health benefit. We believe that in most cases, a face-to-face 
encounter with a recipient within the 90 days prior to the start of 
home health services will provide the physician and/or specified NPPs 
with a current clinical presentation of the recipient's condition such 
that the physician can accurately order home health services and 
establish an effective care plan, based on the encounter conducted by 
either the physician or allowed NPP. We also believe that a face-to-
face encounter which occurs within 90 days prior to the start of 
services would be generally relevant to the reason for the recipient's 
need for home health services, and therefore such a face-to-face 
encounter would be sufficient to meet the goals of this statutory 
requirement. We recognize, however, that there may be circumstances 
when it may not be possible to meet this general requirement, and the 
individual's access to needed services must be protected. To account 
for these circumstances, we also propose in Sec.  440.70(f)(1) to allow 
an opportunity to meet the face-to-face encounter requirement through 
an encounter with the recipient within 30 days after the start of home 
health services.
    While we recognize the necessity of permitting face-to-face 
encounters to occur after the start of services in the instances 
described above, we emphasize that the timing of the face-to-face 
encounter in normal circumstances should occur within the 90 days prior 
to the start of home health services.
    The statute describes NPPs who may perform this face-to-face 
encounter as a nurse practitioner or clinical nurse specialist, as 
those terms are defined in section 1861(aa)(5) of the Act, who is 
working in collaboration with the physician in accordance with State 
law, or a certified nurse-midwife (as defined in section 1861(gg) of 
the Act, as authorized by State law), or a physician assistant (as 
defined in section 1861(aa)(5) of the Act), under the supervision of 
the physician.
    The statutory provision allows the permitted NPPs to perform the 
face-to-face encounter and inform the physician, who documents the 
encounter.
    Based on the same reasoning set out in the Medicare proposed rule, 
Medicare Program; Home Health Prospective Payment System Rate Update 
for Calendar Year 2012; published elsewhere in this Federal Register, 
for individuals admitted to home health upon discharge from a hospital 
or post-acute setting, we propose to also allow the physician who 
attended to the individual in the hospital or post-acute setting to 
inform the ordering physician regarding their encounters with the 
individual to satisfy the face-to-face encounter requirement, much like 
an NPP currently can.
    We propose to add a new Sec.  440.70(f)(2) to list the 
practitioners that may perform the face-to-face encounters. These 
practitioners include the physician already referenced in Sec.  
440.70(a)(2), and the following NPPs: A nurse practitioner or clinical 
nurse specialist (as those terms are defined in section 1861(aa)(5) of 
the Act) who is working in collaboration with the physician in 
accordance with State law, or a certified nurse-midwife (as defined in 
section 1861(gg) of the Act, as authorized by State law), or a 
physician assistant (as defined in section 1861(aa)(5) of the Act), 
under the supervision of the physician, and for recipients admitted to 
home health immediately after an acute or post-acute stay, the 
attending acute or post-acute physician.
    We also propose to add a new Sec.  440.70(f)(3) to indicate that if 
an attending acute or post-acute physician or allowed NPP conducts the 
face-to-face visit, the attending acute or post-acute physician or 
practitioner is required to communicate the clinical findings of the 
face-to-face encounter to the physician, in order for the physician to 
document the face-to-face encounter accordingly. This requirement is 
necessary to ensure that the physician has sufficient information to 
determine the need for home health services, in the absence of 
conducting the face-to-face encounter himself or herself. We are also 
proposing to specify that these clinical findings must be reflected in 
a written or electronic document included

[[Page 41036]]

in the recipient's medical record (whether by the physician or by the 
NPP). We are not prescribing at the Federal level the specific elements 
necessary to document the face-to-face encounter, as that is a matter 
of clinical judgment that could vary according to the individual 
circumstance. However, States may choose to implement a minimum list of 
required information to adequately document the encounter.
    In a new Sec.  440.70(f)(4)(i), we propose to require that the 
physician's documentation of the face-to-face encounter must be either 
a separate and distinct area on the written order, an addendum to the 
order that is easily identifiable and clearly titled, or a separate 
document easily identifiable and clearly titled in the recipient's 
medical record. The documentation must also describe how the health 
status of the recipient at the time of the face-to-face encounter is 
related to the primary reason the recipient requires home health 
services. In a new Sec.  440.70(f)(4)(ii), we propose to require that 
the physician's documentation of the face-to-face encounter be clearly 
titled, and state that either the physician himself or herself, or the 
applicable NPP, has conducted a face-to-face encounter with the 
recipient and include the date of that encounter.
    Finally, we propose to add a new Sec.  440.70(f)(5) to indicate 
that the face-to-face encounters may be performed through the use of 
telehealth. We are aware that many States currently make use of 
telehealth or telemedicine in the delivery of Medicaid services. 
Medicaid has issued informal guidance on the parameters of telehealth 
and telemedicine that is modeled after Medicare requirements. We are 
proposing to allow States to continue utilizing their current 
telehealth technologies as they apply to the implementation of this 
provision, however we are cognizant that State Medicaid telehealth 
policies may not align with Medicare's. We wish to minimize duplication 
and fragmentation of services for beneficiaries who are dually-eligible 
for Medicare and Medicaid, and therefore we are specifically soliciting 
comment on approaches to telehealth policy that would further this 
goal.
    In a new Sec.  440.70(g), we propose to apply all of the 
requirements of Sec.  440.70(f) to the provision of supplies, equipment 
and appliances as described in Sec.  440.70(b)(3) to the extent that a 
face-to-face encounter would be required under the Medicare program for 
durable medical equipment, with one exception from the requirements at 
Sec.  440.70(f). The Affordable Care Act does not permit certified 
nurse midwives to conduct face-to-face encounters required for these 
items. This is reflected in our proposed Sec.  440.70(g)(2).
    The proposal to limit the face-to-face requirements to items that 
would be subject to such requirements as durable medical equipment 
under the Medicare program is based on the aim of maximizing 
consistency with the Medicare program's implementation of section 6407 
of the Affordable Care Act and reducing administrative burden on the 
provider community. Thus we would only require that, for items of 
durable medical equipment specified by CMS under the Medicare program 
as subject to a face-to-face encounter requirement, the physician must 
document that a face-to-face encounter that is related to the primary 
reason the individual requires the item has occurred no more than 90 
days before the order is written or within 30 days after the order is 
written. We intend to issue guidance to States indicating how they, and 
providers, can access the current Medicare list of specific durable 
medical equipment items subject to the face-to-face requirement.
    Medical supplies, equipment and appliances for which a face-to-face 
encounter would not be required under the Medicare program as durable 
medical equipment, would not require a face-to-face encounter prior to 
the ordering of items under the Medicaid program. These items will be 
of a smaller dollar value, and at a decreased risk for fraud, waste and 
abuse. We welcome public comment on this approach.
    We recognize the difficulty that some recipients with complex 
medical needs may face in participating in a face-to-face encounter 
(such as issues with accessing transportation, obtaining caregiver 
support, etc.,) particularly in rural areas. Once this rule is 
finalized, we expect States to implement this provision in a way that 
does not result in barriers to service delivery, as this is not the 
intent of the legislation. The statute specifically references 
telehealth as an alternative for ensuring that this new requirement is 
implemented in a way that protects continuity of services. We encourage 
States to work with the home health provider community to incorporate 
these face-to-face visits in creative and flexible ways to account for 
individual circumstances. We are available to provide technical 
assistance to States in achieving this goal.
    In keeping with a movement across all Medicaid services, we expect 
the plans of care developed to address a recipient's home health needs 
be done in a way that embraces a person-centered philosophy. For 
clarification and consistency among programs, our expectation regarding 
the person-centered philosophy is that the plan of care reflects what 
is important to the recipient and for the recipient. The person-
centered approach is a process, directed by the recipient with long-
term support needs, or by another person important in the life of the 
recipient who the recipient has freely chosen to direct this process, 
intended to identify the strengths, capacities, preferences, needs, and 
desired outcomes of the recipient. The person-centered process includes 
the opportunity for the recipient to choose others to serve as 
important contributors to the planning process.
    This process and the resulting service plan will assist the 
recipient in achieving personally defined outcomes in the most 
integrated community setting in a manner that reflects what is 
important to the recipient to ensure delivery of services in a manner 
that reflects personal preferences and choices, and what is important 
for the recipient to meet identified support needs.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):
    Proposed Sec.  440.70(f)(3) and (g)(1) require NPPs and attending 
acute or post-acute physicians to communicate the clinical findings of 
the face-to-face encounter to the ordering physician. The burden 
associated with these

[[Page 41037]]

requirements would be the time and effort required for the NPP and 
attending acute or post-acute physicians to complete this 
communication. This is estimated at 10 minutes for each encounter. We 
estimate that there would be 1,143,443 initial home health episodes in 
a year based on our 2008 claims data. As such, the estimated burden for 
the NPP and attending acute or post-acute physicians documenting, 
signing, and dating the recipient's face-to-face encounter would be 
190,574 hours for CY 2011.
    Proposed Sec.  440.70(f)(4) and (g)(1) would require that 
physicians document the existence of a face-to-face encounter with the 
Medicaid eligible recipient. The burden associated with these 
requirements would be the time and effort required for the physician to 
complete and maintain this documentation. The ordering physician's 
burden for composing the face-to-face documentation, which would 
include determining how the clinical findings of the encounter support 
eligibility; writing, typing, or dictating the face-to-face 
documentation; signing, and dating the recipient's face-to-face 
encounter is estimated at 10 minutes for each encounter. We estimate 
that there would be 1,143,443 initial home health episodes in a year 
based on our 2008 claims data. As such, the estimated burden for the 
physician documenting, signing, and dating the recipient's face-to-face 
encounter would be 190,574 hours for CY 2011. We acknowledge that this 
figure is inflated by the instances in which the physician himself or 
herself conducted the face-to-face encounter with the individual, 
making this second 10-minute documentation burden unnecessary.
    This notice of proposed rulemaking also serves as the required 60-
day Federal Register notification for aforementioned information 
collection requirements. To obtain copies of the supporting statement 
and any related forms for the proposed paperwork collections referenced 
above, access CMS' Web site at http://www.cms.gov/PaperworkReductionActof1995/PRAL/list.asp#TopOfPage or e-mail your 
request, including your address, phone number, OMB number, and CMS 
document identifier, to [email protected], or call the Reports 
Clearance Office at 410-786-1326.
    If you comment on these information collection and recordkeeping 
requirements, please do either of the following:
    1. Submit your comments electronically as specified in the 
ADDRESSES section of this proposed rule; or
    2. Submit your comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attention: CMS Desk Officer, 
[CMS-2348-P] Fax: (202) 395-6974; or E-mail: [email protected].

IV. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

V. Regulatory Impact Statement

A. Statement of Need

    This regulation is necessary to implement Section 6407 of the 
Patient Protection and Affordable Care Act of 2009 (the Affordable Care 
Act), (Pub. L. 111-148, enacted on March 23, 2010), as amended by 
section 10605 of the Affordable Care Act which affects the home health 
benefit under both the Medicare and Medicaid programs.
    Section 6407(a) of the Affordable Care Act (as amended by section 
10605) added new requirements to section 1814(a)(2)(C) of the Act under 
Part A of the Medicare program, and section 1835(a)(2)(A) of the Act, 
under Part B of the Medicare program, that the physician, or certain 
allowed nonphysician practitioners (NPPs), document a face-to-face 
encounter with the individual (including through the use of telehealth, 
subject to the requirements in section 1834(m) of the Act), prior to 
making a certification that home health services are required under the 
Medicare home health benefit. Section 1814(a)(2)(C) of the Act 
indicates that in addition to a physician, a nurse practitioner or 
clinical nurse specialist (as those terms are defined in section 
1861(aa)(5) of the Act) who is working in collaboration with the 
physician in accordance with State law, or a certified nurse-midwife 
(as defined in section 1861(gg) of the Act, as authorized by State 
law), or a physician assistant (as defined in section 1861(aa)(5) of 
the Act), under the supervision of the physician, may conduct the face-
to-face encounters prior to the start of home health services.
    Section 6407(b) of the Affordable Care Act amended section 
1834(a)(11)(B) of the Act to require documentation of a similar face-
to-face encounter with a physician or specific NPPs by a physician 
ordering durable medical equipment (DME). The NPPs authorized to 
conduct a face-to-face encounter on behalf of a physician are the same 
for this provision as for the provision described above, with one 
exception. Certified nurse-midwives are not permitted to conduct the 
face-to-face encounter prior to the physician ordering DME. The timing 
of this face-to-face encounter is specified as being within the 6-month 
period preceding the written order for DME, or other reasonable 
timeframe specified by the Secretary. This provision also maintains the 
role of the physician in the actual ordering of DME.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995, Pub. L. 104-4), and Executive Order 13132 on Federalism (August 
4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. A regulatory impact analysis (RIA) must be prepared for 
major rules with economically significant effects ($100 million or more 
in any 1 year). We tentatively estimate that this rulemaking may be 
``economically significant'' as measured by the $100 million threshold, 
and, therefore, may be a major rule under the Congressional Review Act. 
Accordingly, we have prepared a Regulatory Impact Analysis which to the 
best of our ability presents the costs and benefits of the rulemaking.
    The CMS Office of the Actuary estimated Section 6407 as having no 
potential impact on Federal Medicaid costs and savings. According to 
the CMS Actuarial estimates, Section 6407 would bring an estimated $350 
million in

[[Page 41038]]

savings to the Medicare program from 2010-2014 and $870 million in 
savings from 2010-2019. Although this provision applies to Medicaid in 
the same manner and to the same extent as the Medicare program, no 
estimates (costs or savings) were noted for the Medicaid program.
    Although there is no quantitative data to arrive at a specific 
dollar figure to attribute to the additional medical supplies, 
equipment, and appliances that may now be authorized in accordance with 
Sec.  440.70(b)(3), we acknowledge the potential for this provision to 
surpass the threshold for economic significance. We wish to note 
however, that this provision may result in offsetting benefits to both 
beneficiaries and State budgets, including the ability for individuals 
to return to or enter the workforce, thereby increasing the pool of 
taxpayers, and decreasing reliance on other Medicaid benefits, 
including institutional care. Although there is no specific estimate 
regarding these benefits, they nonetheless should be taken into 
account. We are specifically soliciting comment on the potential 
increased costs and benefits associated with this provision, as well as 
the various sections throughout the RIA.
    The RFA requires agencies to analyze options for regulatory relief 
for small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small government 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having revenues of 
$7.0 million to $34.5 million in any 1 year. For details, see the Small 
Business Administration's final rule that set forth size standards for 
health care industries, (65 FR 69432, November 17, 2000). Individuals 
and States are not included in the definition of a small entity. We are 
not preparing an analysis for the RFA because the Secretary has 
determined that this proposed rule would not have a significant 
economic impact on a substantial number of small entities.
    In addition, section 1102(b) of the Social Security Act requires us 
to prepare a regulatory impact analysis if a rule may have a 
significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 603 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a Metropolitan Statistical Area and has fewer than 100 beds. We are not 
preparing an analysis for section 1102(b) of the Act because the 
Secretary has determined that this proposed rule would not have a 
significant impact on the operations of a substantial number of small 
rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act (UMRA) of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditure in any one year of $100 
million in 1995 dollars, updated annually for inflation. In 2011, that 
threshold level is approximately $136 million. This proposed rule will 
not result in an impact of $136 million or more on State, local or 
tribal governments, in the aggregate, or on the private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. Since this regulation does not impose any costs on State 
or local governments, the requirements of Executive Order 13132 are not 
applicable.

C. Conclusion

    We tentatively estimate that this rule may be ``economically 
significant'' as measured by the $100 million threshold as set forth by 
Executive Order 12866, as well as the Congressional Review Act. The 
analysis above provides our initial Regulatory Impact Analysis. We have 
not prepared an analysis for the RFA, section 1102(b) of the Act, 
section 202 of the UMRA, and Executive Order 13132 because the 
provisions are not impacted by this rule.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 440

    Grant programs--health, Medicaid.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below:

PART 440--SERVICES: GENERAL PROVISIONS

    1. The authority citation for part 440 continues to read as 
follows:

    Authority:  Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).

Subpart A--Definitions

    2. Section 440.70 is amended by--
    A. Redesignating paragraphs (b)(3)(i) and (ii) as (b)(3)(iii) and 
(iv), respectively.
    B. Revising the introductory text of paragraph (b)(3).
    C. Adding new paragraphs (b)(3)(i) and (ii).
    D. Adding paragraphs (c)(1) and (2).
    E. Adding paragraphs (f) and (g).
    The revisions and additions read as follows:


Sec.  440.70  Home health services.

* * * * *
    (b) * * *
    (3) Medical supplies, equipment, and appliances suitable for use in 
any non-institutional setting in which normal life activities take 
place.
    (i) Supplies are defined as health care related items that are 
consumable or disposable, or cannot withstand repeated use by more than 
one individual.
    (ii) Equipment and appliances are defined as items that are 
primarily and customarily used to serve a medical purpose, generally 
not useful to an individual in the absence of an illness or injury, can 
withstand repeated use, and can be reusable or removable.
* * * * *
    (c) * * *
    (1) Nothing in this section should be read to prohibit a recipient 
from receiving home health services in any non-institutional setting in 
which normal life activities take place.
    (2) Additional services or service hours may, at the State's 
option, be authorized to account for medical needs that arise in these 
settings.
* * * * *
    (f) No payment may be made for services referenced in paragraphs 
(b)(1), (2), and (4) of this section, unless the physician referenced 
in paragraph (a)(2) of this section documents that there was a face-to-
face encounter with the recipient that meets the following 
requirements:
    (1) For the initiation of services, the face-to-face encounter must 
be related to the primary reason the recipient requires home health 
services and must occur within the 90 days prior to or within the 30 
days after the start of the services.
    (2) The face-to-face encounter may be conducted by one of the 
following practitioners:
    (i) The physician referenced in paragraph (a)(2) of this section;
    (ii) A nurse practitioner or clinical nurse specialist, as those 
terms are defined in section 1861(aa)(5) of the Act, working in 
collaboration with the physician described in paragraph (a) of

[[Page 41039]]

this section, in accordance with State law;
    (iii) A certified nurse midwife, as defined in section 1861(gg) of 
the Act, as authorized by State law;
    (iv) A physician assistant, as defined in section 1861(aa)(5) of 
the Act, under the supervision of the physician described in 
subparagraph (a) of this section; or
    (v) For recipients admitted to home health immediately after an 
acute or post-acute stay, the attending acute or post-acute physician.
    (3) The allowed nonphysician practitioner, as described in 
paragraph (f)(3)(ii) through (iv) of this section, or the attending 
acute or post-acute physician, as described in paragraph (f)(3)(v) of 
this section, performing the face-to-face encounter must communicate 
the clinical findings of that face-to-face encounter to the ordering 
physician. Those clinical findings must be incorporated into a written 
or electronic document included in the recipient's medical record.
    (4) To assure clinical correlation between the face-to-face 
encounter and the associated home health services, the physician 
responsible for ordering the services must:
    (i) Document the face-to-face encounter as a separate and distinct 
area on the order itself, as an easily identifiable and clearly titled 
addendum to the order, or a separate document easily identifiable and 
clearly titled in the recipient's medical record, to describe how the 
health status of the recipient at the time of the face-to-face 
encounter is related to the primary reason the recipient requires home 
health services.
    (ii) Must indicate the practitioner who conducted the encounter, 
and be clearly titled and dated on the documentation of the face-to-
face encounter.
    (5) The face-to-face encounter may occur through telehealth, as 
implemented by the State.
    (g)(1) No payment may be made for medical equipment, supplies, or 
appliances referenced in paragraph (b)(3) of this section to the extent 
that a face-to-face encounter requirement would apply as durable 
medical equipment under the Medicare program, unless the physician 
referenced in paragraph (a)(2) of this section documents a face-to-face 
encounter with the recipient consistent with the requirements of 
paragraph (f) of this section except as indicated below.
    (2) The face-to-face encounter may be performed by any of the 
practitioners described in paragraph (f)(2)of this section, with the 
exception of certified nurse-midwives, as described in paragraph 
(f)(2)(iii)of this section.

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program).

    Dated: March 2, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.

    Approved: June 3, 2011.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2011-16937 Filed 7-5-11; 4:15 pm]
BILLING CODE 4120-01-P