Medicaid Program; Face-to-Face Requirements for Home Health Services; Policy Changes and Clarifications Related to Home Health, 5529-5567 [2016-01585]

Agencies

[Federal Register Volume 81, Number 21 (Tuesday, February 2, 2016)]
[Rules and Regulations]
[Pages 5529-5567]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01585]



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Vol. 81

Tuesday,

No. 21

February 2, 2016

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 440





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

Federal Register / Vol. 81 , No. 21 / Tuesday, February 2, 2016 / 
Rules and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 440

[CMS-2348-F]
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: Final rule.

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SUMMARY: This final rule revises the Medicaid home health service 
definition consistent with section 6407 of the Patient Protection and 
Affordable Care Act of 2010 (the Affordable Care Act) and section 504 
of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) to 
add requirements that, for home health services, physicians document, 
and, for certain medical equipment, physicians or certain authorized 
non-physician practitioners (NPP) document the occurrence of a face-to-
face encounter (including through the use of telehealth) with the 
Medicaid eligible beneficiary within reasonable timeframes. This rule 
also aligns the timeframes for the face-to-face encounter with similar 
regulatory requirements for Medicare home health services. In addition, 
this rule amends the definitions of medical supplies, equipment, and 
appliances. We expect minimal impact with the implementation of section 
6407 of the Affordable Care Act and section 504 of MACRA. We recognize 
that states may have budgetary implications as a result of the amended 
definitions of medical supplies, equipment and appliances. 
Specifically, this rule may expand coverage of medical supplies, 
equipment and appliances under the home health benefit. There will be 
items that had previously only been offered under certain sections of 
the Act that will now be covered under the home health benefit.

DATES: Effective date: This rule is effective on July 1, 2016.
    Compliance date: Based on public comments, we recognize that there 
may be operational and budgetary implications with this rule and that 
states and providers may need time to implement this provision. To 
ensure that states and providers are implementing the rule 
appropriately, we are delaying compliance with this rule for up to one 
year if legislature has met in that year, otherwise 2 years.
    Exception for State Legislation.--In the case of a State plan under 
title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), which 
the Secretary determines requires state legislation in order for the 
respective plan to meet one or more additional requirements imposed by 
this rule, the respective state shall not be regarded as failing to 
comply with the requirements of this rule solely on the basis of its 
failure to meet such an additional requirement before the first day of 
the first calendar quarter beginning after the close of the first 
regular session of the state legislature that begins after the date of 
enactment of this rule. For purposes of the previous sentence, in the 
case of a state that has a 2-year legislative session, each year of the 
session shall be considered to be a separate regular session of the 
state legislature. States will be expected to be in compliance by July 
1, 2017 or July 1, 2018 based on legislative timeframes as described 
above.

FOR FURTHER INFORMATION CONTACT: Ali Smilow, (410) 786-0790.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary and Background

A. Executive Summary

1. Purpose
    This final rule implements section 6407 of the Patient Protection 
and Affordable Care Act of 2010 (the Affordable Care Act) (Pub. L. 111-
148), which adds the requirement that physicians document the 
occurrence of a face-to-face encounter (including through the use of 
telehealth) with the Medicaid eligible beneficiary within reasonable 
timeframes when ordering home health services. More specifically, 
section 6407(b) of the Affordable Care Act applies to Medicaid face-to-
face encounter requirements set forth in the Medicare statute. 
Additionally, on April 16, 2015, the Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10), became law. 
Section 504 of this law amended the underlying Medicare requirements at 
section 1834(a)(11)(B)(ii) of the Social Security Act (the Act) to 
allow certain authorized non-physician practitioners (NPP) to document 
the face-to-face encounter. This final rule adopts in large part the 
provisions proposed in the proposed rule issued on July 12, 2011 (76 FR 
41032), but includes conforming changes to the provisions of the 
proposed rule to reflect the revisions made by MACRA to the underlying 
Medicare face-to-face encounter requirements. In addition, this final 
rule clarifies that Medicaid home health services and items are not 
limited to home settings, and makes additional changes to the 
requirements for coverage of medical supplies, equipment and appliances 
under the home health benefit.
2. Summary of the Major Provisions
    The final rule requires 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 beneficiary 
requires home health services occurred no more than 90 days before or 
30 days after the start of services. The final rule requires that for 
the initial ordering of certain medical equipment, the physician or 
authorized NPP must document that a face-to-face encounter that is 
related to the primary reason the beneficiary requires medical 
equipment occurred no more than 6 months prior to the start of 
services. The face-to-face encounter for home health and medical 
equipment may be performed by the physician or certain authorized NPPs. 
The final rule maintains the role of the physician in ordering Medicaid 
home health services and medical equipment.
    The rule also codifies current Medicaid policies for coverage of 
home health services, including clarifying in the definition of medical 
supplies, equipment, and appliances that items must be suitable for use 
in any setting in which normal life activities take place, other than a 
hospital; nursing facility, intermediate care facility for individuals 
with intellectual disabilities; or any setting in which payment is or 
could be made under Medicaid for inpatient services that include room 
and board. Additionally, the rule defines home health supplies, 
equipment, and appliances, to better align with the Medicare program's 
definition of durable medical equipment (DME) at Sec.  414.202.
    The rule codifies the policies set forth in September 4, 1998 
guidance, about the use of lists or other presumptions in determining 
coverage of items under the home health benefit for medical equipment, 
including the following three points: (1) States may have a list of 
preapproved medical equipment, supplies and appliances for 
administrative ease, but not as an absolute limit on coverage; (2) 
States must provide and make available to individuals a reasonable and 
meaningful procedure for beneficiaries to request medical equipment, 
supplies or appliances not on the list based on a showing of medical 
necessity; and (3) Individuals must be informed of their

[[Page 5531]]

right to a fair hearing to appeal an adverse action. Additionally, the 
rule clarifies our interpretation that the Medicaid statute does not 
permit absolute exclusions of coverage as medical equipment, supplies, 
or appliances.
    These clarifications reflect the principles embodied in the 
holdings of the Skubel v. Fuoroli, 113 F.3d 330 (2d. Cir. 1997) and 
Detsel v. Sullivan, 895 F.2d 58 (2d Cir.1990) decisions into the 
requirements for the provision of home health services by clarifying 
that Medicaid home health services may not be limited to services 
furnished in the home and revising the current regulatory language to 
specify that home health services may be provided, as appropriate, in 
any setting in which normal life activities take place, other than a 
hospital, nursing facility; intermediate care facility for individuals 
with intellectual disabilities; or any setting in which payment is or 
could be made under Medicaid for inpatient services that include room 
and board.

                    3--Summary of Costs and Benefits
------------------------------------------------------------------------
    Provision description          Total costs         Total benefits
------------------------------------------------------------------------
Physician and certain non-    Although this         The overall benefit
 physician practitioners       provision applies     of this rule is the
 (NPP) for DME documentation   to Medicaid in the    expected increase
 of face-to-face encounter     same manner and to    in program
 with the Medicaid eligible    the same extent as    integrity resulting
 beneficiary within            the Medicare          in more quality
 reasonable timeframes when    program, no           home health
 ordering home health          estimates (costs or   services for
 services.                     savings) were noted   Medicaid
                               for the Medicaid      beneficiaries.
                               program as data to   Additionally, this
                               determine these       rule will
                               estimates is          potentially serve
                               unavailable. For      to provide
                               Medicare, the         individuals with
                               overall economic      disabilities a
                               impact of this        greater ability to
                               provision is an       engage in normal
                               estimated $920        activities of daily
                               million in savings    living.
                               to the Medicare
                               program from 2010-
                               2014 and $2.29
                               billion in savings
                               from 2010-2019.
------------------------------------------------------------------------

B. Background

    Title XIX of the Act requires that, 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 
is a mandatory services for Medicaid-eligible individuals who are 
entitled to nursing facility services, which includes the basic 
categorically needy populations who receive the standard Medicaid 
benefit package, and can also include medically needy populations if 
nursing facility services are offered to the medically needy within a 
state. Home health services include nursing services, home health aide 
services, medical supplies, equipment, and appliances, and may include 
therapy services (physical therapy, occupational therapy, speech 
pathology and audiology services). For a state to receive federal 
Medicaid matching payments for such services, current Medicaid 
regulations require a beneficiary's physician to order home health 
services as part of a written plan of care reviewed every 60 days.
    At section 6407 of the Affordable Care Act, new Medicare 
requirements were set forth for face-to-face encounters to support 
claims for home health services, and for DME, which were also made 
applicable to Medicaid.
    Specifically, sections 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 were amended to require that the physician, or 
certain allowed 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), before 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 (NP) or clinical nurse 
specialist (CNS) (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 (PA) (as defined in section 1861(aa)(5) of the 
Act), under the supervision of the physician, may conduct the face-to-
face encounters before the start of home health services.
    Section 6407 of the Affordable Care Act also amended section 
1834(a)(11)(B) of the Act to require that physician orders for DME must 
be supported by documentation by the physician of a similar face-to-
face encounter with a physician or specified NPPs. The NPPs authorized 
to conduct a face-to-face encounter on behalf of a physician are the 
same for DME as for home health services, except that certified nurse-
midwives are not included.
    The timing of the face-to-face encounter for either home health or 
DME is specified as being within the 6-month period preceding the 
written order for DME, or other reasonable timeframe specified by the 
Secretary.
    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 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 this statutory 
directive in the Medicaid program.

II. Summary of Provisions of the Proposed Rule

1. New Home Health Face-to-Face Requirements
    In the proposed rule, we sought to implement the face-to-face 
requirements of section 6407 of the Affordable Care Act in a manner 
consistent with existing Medicaid requirements and practices. For 
example, in implementing the face-to-face encounter requirements of 
section 6407 of the Affordable Care Act with respect to home health 
services generally, we took into consideration the longstanding 
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 used the term 
``order'' in place of the Affordable Care Act's use of ``certify.''
    We did not view implementation of section 6407 of the Affordable 
Care Act as supplanting these existing Medicaid regulatory requirements 
related to physician orders; the new face-to-face process is consistent 
with those requirements. We proposed amending the Medicaid regulations 
at Sec.  440.70 to incorporate both the general home health and the 
medical equipment face-to-face requirements. Because DME is

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not a term used in Medicaid in the same manner as in Medicare, we 
proposed to use the Medicaid term ``medical supplies, equipment, and 
appliances'' or the shortened version ``medical equipment.'' 
Additionally, we proposed that the face-to-face encounter can be 
performed through the use of telehealth, which is described in more 
detail in section I. of this final rule.
    As previously indicated, we proposed that for home health services, 
the face-to-face encounter occurred no more than 90 days before or 30 
days after the start of services. To align with Medicare timing 
requirements at Sec.  424.22(a)(1)(v), we revised the timeframes for 
medical equipment and the final rule requires that for the initial 
ordering of medical equipment, the physician must document that a face-
to-face encounter that is related to the primary reason the beneficiary 
requires medical equipment occurred no more than 6 months prior to the 
start of services. These timeframes are applicable to face-to-face 
encounters performed through telehealth.
2. Specification of Non-Physician Practitioners (NPPs) Authorized To 
Perform Face-to-Face Encounters
    Under sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act, face-to-
face encounters for home health services may be conducted by a NP or 
CNS (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 PA (as defined in section 
1861(aa)(5) of the Act), under the supervision of the physician. A 
similar definition of NPPs applies for DME under section 1834(a)(11)(B) 
of the Act, with one exception: Certified nurse-midwives are not 
included in the list of NPPs.
3. Other Medicaid Home Health Policy Changes
a. Codification That Home Health Services Cannot Be Restricted to 
Individuals Who Are Homebound or to Services Furnished Solely in the 
Home
    We proposed that home health services may not be subject to a 
requirement that the individual be ``homebound.'' In addition, we 
proposed that home health services cannot otherwise be restricted to 
services furnished in the home itself. These policies reflect 
longstanding CMS interpretations of the scope of the home health policy 
and were discussed in a July 25, 2000 letter to State Medicaid 
Directors, Olmstead Update No. 3 setting forth federal interpretations 
of applicable law 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 
Attachment 3-g to that letter, we set forth our interpretation that a 
requirement that home health recipients be homebound was inconsistent 
with the mandatory nature of the home health benefit, and the 
longstanding regulatory provisions at 42 CFR 440.230 and 440.240. These 
regulatory provisions 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.
    We also proposed that Medicaid home health services may not be 
limited to services furnished in the home. This policy reflects the 
principles set forth in prior court cases on whether home health 
services and private duty nursing can be limited to services furnished 
in the home. 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. Previously, in 1990, the Second Circuit had 
applied similar principles to invalidate a regulation 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, 
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.
b. Clarification of the Definition of Medical Supplies, Equipment, and 
Appliances
    An important component of the Medicaid home health benefit is 
coverage of medical supplies, equipment, and appliances, under Sec.  
440.70(b)(3). The current regulation does not further define the terms, 
except to indicate that the items should be suitable for use in the 
home. Although CMS has read this phrase to refer only to the type of 
items included in the benefit (excluding those types of items that are 
only furnished in institutional or provider settings), it has been 
susceptible to reading as a prohibition on use of covered items outside 
the home. We proposed revisions to this section to clarify 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 proposed to indicate 
that the 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 the items, states may not 
deny requests for the 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 greater alignment of the definitions of home health 
medical supplies, equipment and appliances with the Medicare definition 
of DME will help to streamline beneficiaries' access to receive needed 
items and provide clear and consistent guidance to states to ensure the 
use of the appropriate benefit category. Therefore, we proposed to 
define home health supplies, equipment, and appliances, to better align 
with the Medicare program's definition of DME at Sec.  414.202, 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. Unlike Medicare, however, we did not propose to define the 
expected life of a piece of equipment and did not propose to limit 
equipment to items used in the home. We also proposed to define 
supplies as health care related items that are consumable or 
disposable, or cannot withstand repeated use by more than one 
individual, based loosely on Medicare principles, but we did not 
propose to require that supplies be incidental to other covered 
services.
    The proposed standard definitions were intended to ensure that such 
items

[[Page 5533]]

will be available to all who are entitled to the mandatory home health 
benefit, and not restricted to individuals receiving targeted benefits 
through section 1915(c) 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 would be 
covered as such.
c. Other Issues
    In the proposed rule, we noted that we were considering whether 
other clarifications to the home health regulations were warranted. In 
particular, we invited comments on 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 our interpretation of the mandatory coverage provisions to 
mean that a state could use such lists or presumptions as an 
administrative convenience but not as an absolute coverage limitation, 
and must provide individuals the opportunity to rebut the list or 
presumption using a process that employs reasonable and specific 
criteria to assess coverage for an item based on individual medical 
needs.
    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 did not incorporate 
changes in the proposed rule 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 of the Act, we specifically solicited comments through this rule on 
the merits of doing so. We will address comments received below.

III. Analysis of and Responses to Public Comments

    We received a total of 94 timely items of correspondence from home 
health provider representatives and other professional associations, 
State Medicaid Directors, states, beneficiaries, and other individuals. 
Comments ranged from general support or opposition to the proposed 
rule, to specific questions and detailed comments and recommendations 
regarding the proposed changes. A summary of the public comments and 
our responses are set forth below.

A. General

    Comment: Some commenters expressed general support for the rule. 
One commenter supported CMS' goal of promoting accountability and 
program integrity. Other commenters supported the efforts of the 
Department to move toward consistency between the Medicare and Medicaid 
programs and ensure that home health services are delivered in 
accordance with sound clinical guidelines and recommendations.
    Response: We appreciate the commenters' support.
    Comment: Many commenters recommended that CMS specify that Medicaid 
home health services cannot be contingent upon a beneficiary needing 
skilled nursing care or therapy. Other commenters suggested revising 
Sec.  441.15(c) to specify that Medicaid home health services cannot be 
contingent upon the beneficiary needing skilled nursing care or 
therapy.
    Response: We have revised Sec.  440.70(b) to clarify that coverage 
of Medicaid home health services cannot be contingent upon the 
beneficiary needing nursing or therapy services. We do not believe it 
is an accurate reading of section 1902(a)(10)(D) or the Act, or Sec.  
441.15 to impose such a requirement; the language of those provisions 
requires that the state provide the home health benefit to individuals 
whose benefit package includes nursing facility services, but does not 
require that the individual actually need such services. While it is 
beyond the scope of this rule to clarify and revise Sec.  441.15(b), 
the clarification in Sec.  440.70(b) will inform the reading of Sec.  
441.15(b).
    Comment: Many commenters proposed that CMS amend Sec.  440.230, 
which governs amount, duration, and scope to include language that 
reflects the policies set forth in the 1998 State Medicaid Director's 
letter related to the Desario case.
    Response: We agree with commenters that the principles set forth in 
that letter should be incorporated into Medicaid regulations, although 
we disagree that these principles should be incorporated into Sec.  
440.230 as opposed to the Medicaid home health regulation at Sec.  
440.70. Accordingly, we are revising Sec.  440.70 to include the three 
points made in that letter: (1) States may have a list of preapproved 
medical equipment, supplies, and appliances for administrative ease but 
not as an absolute limit; (2) States must provide and make available to 
individuals a reasonable and meaningful procedure for individuals to 
request items not on the list; and (3) Individuals are informed of 
their right to a fair hearing.
    Comment: Several commenters requested that CMS specify that states 
cannot require a 60-day plan of care for medical supplies, equipment 
and appliances. The commenters also requested that CMS specify that 
states may not impose additional state restrictions that are not part 
of the federal requirements for supplies, equipment, and appliances 
such as requiring that they be limited to services for temporary 
recovery from specific incidents, be limited to non-routine supplies 
necessary for the delivery of a participant's nursing care and 
described in the plan of care, or any other state requirement that is 
not a federal requirement for receiving equipment and supplies.
    Response: As stated in the existing provisions of Sec.  
440.70(a)(2), home health services are required to be provided to a 
beneficiary on his or her physician's orders as part of a written plan 
of care that the physician reviews every 60 days, except as specified 
in paragraph (b)(3). That exception states that a beneficiary's need 
for medical supplies, equipment, and appliances need only be reviewed 
on an annual basis, with more frequent review to be determined on a 
case-by-case basis based on the nature of the item prescribed. It would 
be inappropriate for states to require additional review of medical 
equipment, supplies, and appliances except where indicated on a case-
by-case basis (for example, for supplies that are needed on a short 
term basis).
    Additionally, states may place limits on the amount and duration of 
medical equipment, supplies and appliances, but the limits must meet 
sufficiency requirements set forth at Sec.  440.230. And, as with all 
Medicaid services, states are not required to cover medically 
unnecessary services, and have the discretion to develop medical 
necessity criteria, but these must be based on accepted medical 
practices and standards.
    Comment: Some commenters suggested that CMS apply the proposed 
prohibition on applying a ``homebound'' limitation to all Medicaid home 
care related program benefits, with one commenter suggesting that CMS 
audit state Medicaid programs for noncompliance with the homebound 
prohibition rule. That commenter stated that CMS should specifically 
review whether those state programs that

[[Page 5534]]

utilize a medical necessity standard as proxy for homebound.
    Response: It is beyond the scope of this regulation to revise the 
requirements or definitions applicable to services other than home 
health care services. We are prohibiting the application of a homebound 
requirement for Medicaid home health because we have concluded that the 
resulting benefit would be insufficient to meet the needs of the 
population, and would not achieve the purposes of the mandatory 
benefit. We appreciate the commenters' suggestion and will take under 
advisement as part of our overall compliance strategy. We are revising 
Sec.  440.70(c)(1) to codify the homebound prohibition for Medicaid 
home health services.
    Comment: One commenter requested that CMS pursue the expansion of 
the Medicaid provision of home health services to meet the needs of our 
elderly citizens.
    Response: Medicaid enrollees, regardless of their eligibility 
category, are not required to be homebound to qualify for home health 
benefits. Therefore, the clarification of the definition of medical 
equipment and supplies, and the requirement that home health services 
cannot be restricted to the home helps support the ability of Medicaid 
to best meet the needs of all eligible individuals, including the 
elderly.
    Comment: One commenter believed that models for health care homes 
that compensate medical practices for complex care of chronically ill 
Medicaid beneficiaries should be promoted.
    Response: We agree with the commenter. We have provided states with 
guidance and technical assistance on many initiatives that promote 
better care for the beneficiaries with chronic illness, including 
disease management strategies, health homes, and primary care case 
management systems. In 2014, we established the Medicaid Innovation 
Accelerator Program to support and focus resources on such models. More 
information can be found on our Web site at http://www.medicaid.gov/state-resource-center/innovation-accelerator-program/innovation-accelerator-program.html. Related guidance is also found on our Web 
site at http://www.medicaid.gov/state-resource-center/innovation-accelerator-program/related-tools-and-guidance/related-tools-and-guidance.html. Such models are beyond the scope of this regulation but 
we intend to continue our efforts to provide technical assistance and 
guidance on these models.
    Comment: One commenter recommended that states be required to cover 
certification of home health care (at least initial certification) and 
ongoing care plan oversight as a medical benefit for Medicaid 
beneficiaries and to compensate physicians consistent with Relative 
Value Units for such work.
    Response: Physician certification of the need for home health care 
could be covered by the state as a physician service or could be 
covered as a component part of home health care services. States have 
substantial flexibility to design payment methodologies for covered 
services. These payment methodologies can be tailored to the service 
delivery system in each state.
    Comment: One commenter indicated that the rule should note that 
states must develop a strategy to educate physicians about the 
extension of the face-to-face requirement to Medicaid.
    Response: We recognize the importance of education and expect 
states to educate the physician community on the new requirements 
implemented through the Affordable Care Act. We disagree that this 
administrative activity should be included as a requirement in the 
regulation. It is implicit with any regulation change to a benefit or 
to provider responsibilities that states educate impacted providers and 
beneficiaries about the new requirements.
    Comment: One commenter endorsed adding the phrase ``medically 
necessary'' to Sec.  440.70(b), to read as ``Home health services 
include the following medically necessary services and items.''
    Response: We agree that states may limit covered services to only 
include medically necessary services. This flexibility is already 
provided in regulation at Sec.  440.230(d). Medical necessity is not 
determined by us, but is determined by medical professionals. Many 
states employ medical professionals to establish medical necessity 
criteria and then review individual circumstances in light of those 
criteria. The phrase suggested by the commenter suggests that we would 
review medical necessity determinations. We do not intend to do so, and 
thus we are not accepting the suggestion.
    Comment: One commenter indicated that there are no Current 
Procedural Terminology (CPT) or International Classification of 
Diseases (ICD) codes that specifically represent an evaluation for home 
health services; therefore, another model of demonstrating that a face-
to-face encounter took place is needed.
    Response: The face-to-face encounter can be demonstrated through 
the pre-existing ``evaluation and management'' codes.
    Comment: One commenter expressed concern about how this provision 
will be implemented for those that are dually eligible for Medicare and 
Medicaid. Another commenter urged CMS to consider regulatory waivers, 
demonstrations or other initiatives to consolidate services for a dual 
eligible into a separate program for those beneficiaries with 
proportional funding from the existing federal and state programs. The 
commenter also indicated that CMS should undertake a significant 
education and outreach campaign to reach state officials, physicians, 
hospitals, home health providers, and organizations representing 
beneficiaries. The focus of the campaign would include Medicaid face-
to-face requirements, and important similarities and differences with 
the Medicare face-to-face requirements.
    Response: To the maximum extent possible, we have intentionally 
aligned the Medicaid rule with the Medicare requirements to reduce 
disparities in care and coverage for individuals who are eligible for 
both programs and to make it easier for providers to understand and 
implement the applicable rules. Currently, we are working on and 
publicizing a number of initiatives that speak directly to dual 
eligibles, increasing their continuity of care, and addressing ways in 
which Medicaid and Medicare rules might be better aligned. Such 
initiatives are out of the scope of this rule.
    Comment: One commenter requested that CMS clarify or amend the 
definition of home health services such that this rule would not be 
applicable to non-medical services such as personal care attendant 
services.
    Response: Personal care services are separately defined at Sec.  
440.167. We recognize the potential overlap between personal care 
services and home health aide services authorized under Sec.  440.70. 
However, we disagree with the commenter's suggestion that this rule 
should not be applicable to services qualifying as home health aide 
services.
    Comment: One commenter requested that CMS provide a significant 
amount of time before making effective, or enforcing, the final rule so 
that the state may prepare an accurate budget with sufficient funds for 
implementation and compliance.
    Response: The requirements of section 6407 of the Affordable Care 
Act were effective upon enactment, and applied for home health services 
certified after January 1, 2010, as

[[Page 5535]]

specified in the Affordable Care Act and CMCS Informational Bulletin 
dated July 13, 2011; http://www.medicaid.gov/Federal-Policy-Guidance/downloads/CIB-7-13-11.pdf. However, we will be delaying compliance for 
up to one year from the effective date of the rule if the state's 
legislature has met in that year, otherwise 2 years. Our expectation is 
that states and providers are compliant with the requirements of the 
final rule within the timeframes explained above. We intend to work 
collaboratively with states to ensure compliance with these 
requirements within a reasonable timeframe.
    Comment: One commenter recommended that more productive emphasis be 
placed on training physicians in the home health assessment process so 
that physicians are held accountable for ordering appropriate services. 
The commenter also recommended that a process be put into place to 
audit home health services, and if a home health agency is abusing the 
system by providing questionable services, then a heightened 
authorization system be put into place for those identified high-risk 
agencies.
    Response: As previously stated, it is implicit with any regulation 
change to a benefit that states inform impacted providers of new 
requirements and procedures. In response to the second comment, home 
health agencies must meet conditions of participation as determined 
through our survey process. The structures are designed to ensure that 
such agencies are qualified to furnish high-quality services that are 
medically necessary. To the extent that any provider, including a home 
health agency, is determined through the survey process to be 
furnishing inappropriate or unnecessary services, compliance actions 
can be pursued.
    Comment: One commenter believed that home health services should be 
delivered in a consumer directed manner; the individual should be 
allowed to choose an agency or a consumer directed delivery option.
    Response: A service plan based on a person-centered philosophy will 
support the beneficiary in achieving personally defined outcomes in the 
most integrated community setting available. This approach will reflect 
what is important to the individual receiving the services in terms of 
personal preferences and choices to meet identified support needs. 
Formal participant direction requirements for a home health service 
plan may be required by states as they determine appropriate, and 
consistent with the service delivery and payment system used by the 
state. We did not propose to change the requirement that certain 
components of the home health benefit (specifically nursing, home 
health aide services, and therapy services) must be furnished by a home 
health agency. This requirement is based on the premise that these 
services must be properly supervised and coordinated, consistent with 
the beneficiary's plan of care. Changing this requirement is beyond the 
scope of this rulemaking.
    Comment: One commenter sought CMS guidance on the responsibility of 
the Medicaid Agency as it relates to oversight and monitoring of home 
health agencies to ensure compliance with the regulations.
    Response: Overall compliance with home health agency certification 
requirements is conducted by the state's survey agency, in partnership 
with us. It is expected that State Medicaid Agencies collaborate with 
State Survey Agencies to ensure compliance of all home health providers 
with appropriate requirements, including all aspects of this 
regulation.
    Comment: Some commenters discussed transportation costs. One 
commenter requested clarification on Medicaid coverage of physician 
non-medical transportation costs for face-to-face encounters. One 
commenter stated that the increased need to provide transportation 
services for the face-to-face encounters will result in increased 
costs. Another commenter raised a concern related to the problem of 
transportation costs, stating that the mandate of existing Sec.  431.53 
``that the Medicaid agency will ensure necessary transportation for 
beneficiaries to and from providers,'' when read in connection with the 
proposed Sec.  440.70(c)(1), significantly increases the states' 
financial obligation for service delivery. Additionally, the commenter 
requested that CMS clarify that Sec.  431.53 does not apply for 
location-independent providers such as home health agencies.
    Response: States are required under Sec.  431.53 to assure 
necessary transportation for beneficiaries to and from medical 
providers, and that applies to transportation costs necessary for face-
to-face encounters. This requirement includes transportation to and 
from an appointment with a physician or allowed NPP to receive an 
evaluation for home health services. States may reimburse physicians 
for transportation costs when necessary to make house calls through 
payment rate adjustments. Physicians cannot claim separately for 
transportation costs, since Medicaid reimbursement is not available 
specifically for physician transportation costs. However, many states 
factor in the costs of doing business into the payment rates for 
physician services, and may have higher payment rates to reflect 
physician house calls. Additionally, in response to the commenter's 
concern about transportation, we would note that the face-to-face 
encounter can be performed through the use of telehealth, and states 
may have payment rates that apply specifically for telehealth services 
and take into account the costs of communication lines and other 
necessary components of a telehealth encounter (on both sides of the 
telehealth encounter).
    Comment: Two commenters requested that CMS specify that medical 
supplies, equipment, and appliances are a separate stand-alone home 
health service. The commenter also suggested that CMS emphasize that, 
even if a particular item cannot be covered as medical equipment, 
supplies, or appliances, states should determine whether it can be 
covered under another Medicaid service category, such as prosthetics or 
rehabilitation services. Additionally, the commenter suggested that CMS 
should state explicitly that satisfying the criteria of either one of 
the two definitions (equipment and appliances, or supplies) is 
sufficient to require coverage when the item is medically necessary.
    Response: We appreciate the commenter's suggestions. As indicated 
in the proposed rule, items and services that meet the criteria for 
coverage under the home health benefit must be covered according to 
home health coverage parameters. To ensure full coverage for medical 
equipment and appliances, we will require that, to the extent that 
there is overlap in coverage with another benefit, states must 
nevertheless provide for the coverage of these items under the 
mandatory home health benefit. We understand that this policy may 
require that some states revise their claims processing systems, and we 
will work with those states to assist them in meeting this requirement. 
We reiterate that individuals only requiring medical equipment and 
appliances, and not other components of the home health benefit, may 
receive those services from DME providers authorized by the state, 
without necessitating a relationship with a home health agency. The 
nature of medical supplies and their ability to be provided in a 
variety of situations calls for a more flexible approach. Supplies 
incident to another mandatory benefit, such as physician services or an 
inpatient benefit such as hospital or nursing facility, may be covered 
under that benefit category. Additionally, supplies incident to the 
clinic benefit may be covered under that benefit

[[Page 5536]]

category. However, regardless of coverage category, the expectation 
remains that individuals receive all medically necessary medical 
supplies meeting the definition finalized under this regulation. We are 
available to provide technical assistance to states to work through 
operational issues.
    We added this clarification to the regulatory text at Sec.  
440.70(b).
    Comment: Two commenters indicated that the substantial number of 
hours required for compliance with this rule, in combination with the 
relatively low reimbursement typical for care of Medicaid 
beneficiaries, will lead to barriers to compliance among physicians. 
Commenters anticipated resistance from practitioners and physicians due 
to the additional administrative time it will take to meet the face-to-
face requirement. One commenter indicated that many doctors are stating 
that they do not like the additional documentation requirements and are 
simply not ordering home health services. One commenter stated that 
early indications from the Medicare requirements are that physicians 
have been hostile to the new requirement, particularly the 
documentation standards. Another commenter stated that already there 
are many doctors who do not accept Medicaid beneficiaries. The 
commenter believed that adding additional paperwork and documentation 
requirements like this means there will likely be even more doctors who 
do not participate or who do not order home health services. One 
commenter reported that the home health industry is having problems 
with some doctors not wanting to do the face-to-face, therefore they 
are refusing to refer any beneficiaries to home health. One commenter 
indicated that since the Medicare requirement went into effect their 
members have seen a significant drop in referrals, some as much as 25 
percent. The commenter further stated that unlike Medicare, Medicaid is 
actually 50 different programs with varying sets of rules from state to 
state. The commenter expressed concern that this will cause uneven 
application of the rule across the country and could lead to more 
problems with access to care.
    Response: We fully expect that physicians will comply with the 
requirements and that they will be reasonably compensated for the time 
needed to provide and document the face-to-face encounter. The face-to-
face encounters can be performed by NPPs, as well as done through 
telehealth. Additionally, as previously indicated, for medical 
equipment, NPPs are now authorized to complete the documentation 
requirements. To the extent that physicians may be avoiding ordering 
home health services, or are not cooperating with the home health 
industry on face-to-face documentation requirements, these may be 
temporary responses stemming from the unfamiliarity of the 
requirements. States, home health agencies and DME suppliers may need 
to work with physicians and NPPs to help them to understand the 
requirements. In particular, home health agencies and DME suppliers may 
need to develop ongoing relationships with physicians and NPPs to 
ensure that face-to-face encounters occur and are properly documented.
    Comment: We received many comments pertaining to access to care. 
Commenters expressed that the face-to-face requirement in Medicare 
seems to be doing little to improve oversight of the benefit and is 
instead reducing access to home health for otherwise eligible patients, 
as physicians either refuse to accept the additional paperwork burden 
or do so only after agencies spend additional time and resources to 
obtain the documentation. One commenter believed the manner in which 
CMS is implementing the statutory requirement will significantly affect 
Medicaid beneficiaries' access to care. The commenter further stated 
that they can cite anecdotal examples of physicians who have simply 
decided to no longer refer individuals for home health services because 
of the hassle involved. One commenter believed that Medicaid 
beneficiaries will be the victims of this proposal because citizens who 
are elderly and those with disabilities are at risk for not receiving 
home health services if agencies have concerns about compliance with 
the face-to-face requirement and cannot deliver care. One commenter 
supported the need to align Medicare and Medicaid rules whenever 
possible, but was concerned about requirements that cause barriers to 
access by requiring a face-to-face encounter to initiate and receive 
payment for home health services. Another commenter was not supportive 
of applying the face-to-face requirements under Medicare to Medicaid. 
Another commenter believed that this requirement will negatively impact 
access and serve as a barrier to care because of the additional 
administrative burden to physicians filling out the face-to-face form. 
One commenter indicated that physicians, hospitals, discharge planners, 
home health agencies, and beneficiary groups agree that the physician 
requirements are a barrier to access to home health care for bona fide 
beneficiaries who meet coverage standards. One commenter believed that 
the face-to-face requirement is reducing access to home health for 
otherwise eligible individuals. One commenter was concerned that the 
face-to-face requirement will impede access and provide marginal 
benefit as a tool to eliminate ordering of questionable services.
    Response: The face-to-face requirement is mandated by statute. We 
have attempted to permit maximum flexibility in how the statutory 
requirement can be met and believe that the requirement can be 
accommodated without significant additional burden. We are aligning 
Medicaid requirements with Medicare requirements to maximize 
consistency in service delivery, as well as reduce administrative 
burden on the provider community. As discussed in this final rule, we 
expect states to offer appropriate provider training and for states and 
providers to work together to ensure this provision is implemented in a 
manner that supports the goal of ensuring program integrity while not 
serving as a barrier to access to medically necessary services.
    Comment: One commenter stated that well-mom and baby visits do not 
meet the intent of the physician face-to-face encounter for 
establishing the primary reason for which home health services are 
required and which will ultimately result in the development of a home 
health plan of care.
    Response: If, in the course of such a visit, the physician or other 
practitioner determines that home health services or medical equipment 
is required to address the condition of the mother or child, such a 
visit could be the basis for a documented face-to-face encounter to the 
extent that the visit involves examining the condition of the mother or 
child.
    Comment: One commenter believed that the proposed rule fails to 
take into account the fact that a significant proportion of home health 
services furnished to Medicaid beneficiaries under managed care 
programs are primarily the financial responsibility of managed care 
organizations. Another commenter suggested that, given the increased 
cost associated with the face-to-face encounter requirements, CMS 
should query states as to how they will be adjusting rates paid to 
managed care plans to adjust for the increased costs in an actuarially 
sound manner. Other commenters requested clarification regarding the 
application of the regulation to home health services

[[Page 5537]]

provided through Medicaid managed care plans.
    Response: As previously stated, neither the law nor this rule 
requires that the face-to-face requirement apply to Medicaid managed 
care. We defer to states to determine the application of the face-to-
face requirement in managed care plans to best meet the needs of their 
beneficiaries.
    Comment: One commenter was concerned that more services will be 
shifted to personal care attendant services resulting in potential 
Medicare savings at the expense of state Medicaid budgets.
    Response: We believe that the concern about potential cost shifting 
between Medicare and Medicaid can be address by ensuring that home 
health plans of care include all needed home health aide services. 
Additionally, as indicated in a previous response, to the extent that 
there is overlap in coverage with an optional benefit, states must 
provide for the coverage of services that meet the parameters of home 
health services under the mandatory home health benefit.
    Comment: One commenter stated that the proposed rule at Sec.  
440.70 goes well beyond the scope of statutory authority and should not 
be issued. This commenter requested that CMS revisit its position that 
home health services are a mandatory service.
    Response: We disagree with the commenter. Section 1902(a)(10)(D) of 
the Act sets forth the requirement that a state plan for medical 
assistance must provide for the inclusion of home health services for 
any individual who, under the state plan, is entitled to nursing 
facility services. Because nursing facility services are mandatory for 
categorically needy individuals and the medically needy--if a state 
chooses to cover the medically needy--home health services are 
mandatory for the populations.
    Upon consideration of public comments received, we are finalizing 
Sec.  440.70 with the following revisions:
     We are revising Sec.  440.70(b) to state that home health 
services cannot be contingent upon the beneficiary needing nursing or 
therapy services.
     We are revising Sec.  440.70(b) to codify that items and 
services that meet the criteria for coverage under the home health 
benefit must be covered according to home health coverage parameters.
     We are incorporating into Sec.  440.70(b)(3)(v), three 
basic points set forth in our 1998 guidance relating to the DeSario 
decision: (1) States may have a list of preapproved medical equipment, 
supplies, and appliances for administrative ease but not as an absolute 
limit on coverage; (2) States must provide and make available to 
individuals a reasonable and meaningful procedure for individuals to 
request items not on the list; and (3) Individuals must be informed of 
their right to a fair hearing. Additionally, we are including in the 
final rule the underlying interpretation implicit in these principles 
that the mandatory coverage of this benefit prohibits absolute 
exclusions of coverage as medical equipment, supplies, or appliances.
     We are revising Sec.  440.70(c)(1) to codify our 
longstanding policy that home health services may not be subject to a 
requirement that the individual be homebound.

B. Introductory Text--Medical Supplies, Equipment, and Appliances 
(Sec.  440.70(b)(3))

    Section 440.70(b)(3) proposed to revise the wording of the 
regulation to further define medical equipment, supplies, and 
appliances as suitable for use in any non-institutional setting in 
which normal life activities take place. We also proposed in Sec.  
440.70(b)(3)(i) and (ii) more detailed definitions of the terms 
``medical supplies, equipment, and appliances''.
    Comment: We received many comments in support of revising the 
introductory text of paragraph (b)(3). Several commenters supported the 
policy that medical equipment cannot be restricted to items that are 
useful in the home. One commenter further stated that potentially 
essential products are necessary not only for individuals to function 
in the home but to carry out activities of daily living while out of 
the home and in the community. One commenter stated that such standard 
is consistent with the requirements under the Americans with 
Disabilities Act, the Supreme Court Decision in Olmstead v. LC, and 
good healthcare policy. Another commenter stated that substituting 
suitable for use in any non-institutional setting in which normal life 
activities take place will improve understanding of this required 
characteristic of medical supplies, equipment, and appliances. Another 
commenter stated that this acknowledges that individuals engage in 
daily activities in which they may need such equipment not only in 
their homes, but also as they go about their daily activities in the 
community. Another commenter suggested including this language not only 
in the preamble, but also in the final regulations. Additionally, 
several commenters commended CMS for its statement in the preamble to 
the proposed rule that ``[i]tems that meet the criteria for coverage 
under the home health benefit must be covered as such. States will not 
be precluded from covering items through a section 1915(c) HCBS waiver 
service, such as 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.''
    Response: We appreciate the perspectives the commenters had in 
support of the proposed revisions to the introductory language in Sec.  
440.70(b)(3). This language has been included in the final regulation.
    Comment: Many commenters requested clarification of the phrase 
``normal life activities.'' One commenter requested that CMS clarify or 
define normal life activities as absent a definition there will likely 
be considerable confusion between this term and activities of daily 
living. Another commenter reported that some states include the 
terminology of activities of daily living in their DME definition which 
enables a focus on a defined area of medical necessity. The commenter 
suggested that this standard is more clearly defined and thus 
preferable. Another commenter indicated that the term ``normal life 
activity,'' if not clearly defined, will result in duplication of 
services and increased expenditures. Another commenter indicated that 
``in which normal life activities take place'' is a subjective 
statement where the state's administration may have to continually 
define and defend its interpretation in utilization management 
practices.
    Response: To clarify, the phrase ``normal life activities'' refers 
to activities that could occur in or out of an individual's home. We 
proposed to revise the phrase ``suitable for use in the home'' to 
``suitable for use in any non-institutional setting in which normal 
life activities take place'' to clarify that although states may 
continue to establish medical necessity criteria to determine the 
authorization of the items, states may not deny requests for the items 
based on the grounds that they are for use outside of the home. This 
clarification would not preclude states from continuing to use 
activities of daily living as medical necessity criteria.
    Comment: One commenter indicated concern with the proposed 
``expansive'' new definition of Medicaid supplies, equipment, and 
appliances which appears to require states to provide supplies, 
equipment, and appliances in any non-institutional setting. Thus, 
states would be required to provide, as just one example, wheelchair 
ramps in

[[Page 5538]]

settings outside the home as well as in the home.
    Response: The new definition of Medicaid supplies, equipment, and 
appliances establishes a framework to serve as a companion to the 
requirement that the benefit is not limited to services and/or items 
suitable for use in the home, rather it is a benefit that is available 
to people in any setting in which normal life activities take place, 
other than facilities specified at Sec.  440.70(c)(1). States may not 
deny requests for the items based on the grounds that they are for use 
outside of the home. States will continue to have flexibility to 
establish a reasonable definition of medical supplies, equipment and 
appliances that is consistent with the regulatory framework, to apply 
medical necessity criteria, and to have reasonable utilization control 
standards. We note that we do not regard this definition to expand the 
scope of medical equipment to include environmental or structural 
housing modifications. Nor does it include equipment that is designed 
to have a general use and will serve more people than just the Medicaid 
beneficiary. And a state's medical necessity and utilization control 
standards could reasonably preclude coverage of duplicative items or 
could provide coverage for rental rather than purchase of items when 
cost effective.
    Comment: One commenter stated that what CMS characterizes in the 
proposed rule as clarifying language in Sec.  440.70(b)(3) is a 
substantive change to the rule that goes well beyond what is 
statutorily allowed under Medicaid. The commenter stated that the 
present language of Sec.  440.70(b)(3) correctly sets forth the scope 
of coverage of medical supplies and equipment as being ``suitable for 
use in the home'' as home health care is the purpose of this coverage 
category.
    Response: We disagree that the proposed changes go beyond the 
statutory authority for CMS to interpret the meaning of the home health 
benefit and establish a framework for states to implement that benefit. 
In addition, while the changes are substantive, the changes incorporate 
principles that have been applied to Medicaid coverage in a number of 
court cases and CMS guidance, as discussed in the Background section 
above. As a result, the changes update the regulations to incorporate 
principles that are already applicable in practice.
    Comment: One commenter raised concern regarding DME issues related 
to abuse of the equipment provided to Medicaid beneficiaries, or 
requests for equipment that exceeds the practical needs of the member.
    Response: States may review requests to ensure that only medically 
necessary equipment is covered. The proposed provisions do not replace 
the existing Medicaid regulatory requirements at Sec.  440.70(a)(2) and 
Sec.  440.70(b)(3)(i) related to physician ordering and review of 
necessary medical equipment. An additional safeguard against 
unnecessary utilization is the face-to-face requirement and subsequent 
documentation requirement, which provides that physicians must describe 
how the health status of the beneficiary at the time of the face-to-
face encounter is related to the primary reason the beneficiary 
requires home health services. This process should identify requests 
for equipment that exceed the practical needs of the individual. With 
regard to abuse of equipment provided to Medicaid beneficiaries, we 
believe it would be reasonable for states to require that the face-to-
face encounter include instruction on how to properly use and care for 
the medical equipment at issue.
    Comment: One commenter requested clarification as to whether the 
existing 16-bed or fewer size standard for determining whether a 
residential setting is an institution will be considered in determining 
whether supplies are suitable for use in ``non-institutional settings'' 
and the applicability for DME that would be used in a school setting