Medicaid home and community care: one federal frame, a different program in every state.

1. The payer is a state, and often a health plan

Medicaid is run by each state under federal rules and paid for jointly. The person served may be an older adult, an adult or child with a physical disability, a person with an intellectual or developmental disability, or someone with a serious behavioral health condition.

The payer an agency actually deals with is one of two things. In a fee-for-service program it is the state Medicaid agency or the department that runs long-term care for it. In a managed care program it is a health plan that the state pays a fixed amount per member to arrange the care. One agency can hold a state contract and several plan contracts for what looks like the same service.

2. The authorities a state can use

State plan home health. Home health services are a mandatory benefit. The regulation requires nursing services, home health aide services and medical supplies, equipment and appliances suitable for use in any setting where normal life activities take place; physical therapy, occupational therapy and speech pathology and audiology services are optional. Services are ordered by a physician or another allowed practitioner as part of a written plan of care that is reviewed every 60 days. A face-to-face encounter related to the primary reason for home health must occur within the 90 days before or the 30 days after the start of services. A state may not limit the benefit to people who are homebound.

State plan personal care. Personal care is optional. Where a state covers it, the services are authorized by a physician under a plan of treatment or, at the state’s option, under a service plan the state approves. They are provided by a qualified individual who is not a legally responsible relative, in the home and, if the state chooses, elsewhere.

1915(c) waivers. This is the original home and community-based services authority. A state may waive statewideness, so a program can run in part of the state; comparability, so it can serve a defined group; and certain income and resource rules. In return the state must show that the services will not cost more than institutional care, that the people served meet its criteria for an institutional level of care, and that their health and welfare are protected. Medicaid.gov lists the standard services as case management, homemaker, home health aide, personal care, adult day health, habilitation and respite, and states may add others.

1915(i) state plan services. A state may offer home and community-based services through its state plan, with needs-based criteria of its own and the option to target specific populations. The benefit must be available to all eligible individuals in the state. When a state targets the benefit, approval runs for 5 years and may be renewed.

1915(j) self-directed personal assistance. Participation is voluntary. The participant sets worker qualifications and training and decides what to pay within a budget. A state may allow hiring of legally liable relatives, management of a cash disbursement, and purchases of goods or services that increase independence or substitute for human help.

1915(k) Community First Choice. This state plan option covers home and community-based attendant services and supports, and carries a 6 percentage point increase in the federal matching rate for those services.

Section 1115 demonstrations. The federal government may approve experimental or demonstration projects that depart from ordinary Medicaid rules. They must be budget neutral to the federal government and are generally approved for an initial five-year period, with extensions.

3. Managed long-term services and supports

Managed long-term services and supports means delivering these services through capitated Medicaid managed care programs. States run them under managed care authorities such as 1915(a), 1915(b) and section 1115, often combined with a home and community-based authority. A plan contract that covers long-term services must require that services which could be authorized under 1915(c), (i) or (k) are delivered in settings that meet the federal settings requirements.

For an agency, a managed care organization changes four things. It contracts with each plan separately, on the plan’s terms. The service authorization comes from the plan, usually through the plan’s service coordinator or case manager. The claim goes to the plan, by the plan’s rules and through the plan’s portal or clearinghouse connection. The remittance comes back from the plan. The state still stands behind it: federal rules require the state to screen, enroll and periodically revalidate every network provider of a managed care plan, so the agency enrolls with Medicaid and credentials with each plan.

4. From referral to authorization

A case reaches an agency from a state case worker, a plan’s service coordinator, a hospital, a physician or a family. Three things are decided first.

The first is eligibility, financial and functional. For a 1915(c) waiver the state must evaluate that the person needs a hospital, nursing facility or intermediate care facility level of care, and reevaluate at least annually. Other authorities use needs-based criteria the state defines.

The second is the person-centered service plan. Federal rules require a planning process led by the individual where possible, including people the individual chooses, and offering informed choices about services and who provides them. The written plan reflects the person’s strengths, preferences, goals, paid and unpaid supports, risk factors and backup plans. It is agreed to in writing by the individual and signed by the providers responsible for carrying it out, and it is reviewed at least every 12 months, when needs change, or at the person’s request.

The third is the authorization. It names the service, usually by a procedure code and modifier, a number of units, and a period. The state or plan defines what a unit is for each service. The agency’s work is to deliver those units inside the period. When the plan of care changes, the authorization has to change before the schedule does.

Texas shows how concrete this becomes. Its handbook for Primary Home Care and Community Attendant Services requires a functional assessment score of at least 24 on the state’s form, a practitioner’s statement of medical need, and an authorization for community care services issued on a named state form. It caps services at 50 hours a week, or 42 for a person with priority status. Every state has an equivalent, and none of them is the same.

5. Who delivers the care

Most of the hours are delivered by aides and attendants. Nurses assess, write and supervise aide care plans, and deliver skilled visits under the home health benefit. Therapists work where the state covers therapy. Qualifications, training hours and the supervision cycle are set by the state’s licensure rules and by each program. In Texas, Community Attendant Services must be delivered by an agency licensed as a home and community support services agency that also holds a contract with the state.

Participant direction reverses the usual arrangement. Medicaid.gov describes two forms of authority. Employer authority lets the participant recruit, hire, train and supervise the worker. Budget authority lets the participant decide how the funds in an individual budget are spent. States must provide information and assistance to support this, and financial management services that withhold taxes, process timesheets, purchase approved goods and services, and track the budget. An agency may be the provider of record, the financial management entity, or neither, and its records differ in each case.

6. Electronic visit verification

Section 12006 of the 21st Century Cures Act requires states to use an electronic visit verification system for Medicaid personal care services and home health care services that require an in-home visit by a provider. The system must verify six things: the type of service performed, the individual receiving the service, the date of the service, the location of service delivery, the individual providing the service, and the time the service begins and ends.

The requirement applied to personal care services from January 1, 2020 and to home health care services from January 1, 2023. It reaches personal care delivered under the state plan, 1915(c), 1915(i), 1915(j), 1915(k) and section 1115, in fee-for-service and managed care alike. A state that does not comply loses a share of its federal match on those services, rising in steps to 1 percentage point (reached in 2023 for personal care and in 2027 for home health), unless it showed a good-faith effort and unavoidable delay in the first year.

The statute does not prescribe a system. CMS says states have significant discretion and may use more than one. Some states supply a single system. Others let agencies use their own and send the data to a state aggregator. CMS does not require GPS, and reads the law as excluding congregate residential settings where 24-hour service is available. Texas, for example, states that verification was required for Medicaid personal care services from January 1, 2021 and for home health care services from January 1, 2024, and lets providers use a state vendor system or seek approval for a proprietary one.

Each state also sets its own rules for correcting a visit record. Texas, for example, defines a visit maintenance period and a request process to unlock a visit after that period has passed.

7. The claim

The claim goes to the state’s fiscal agent or to the managed care plan. The state or plan decides whether a service is billed on the professional or the institutional claim format, and publishes the procedure codes, modifiers, units, place of service and rates in its own billing manual. The same hour of attendant care can carry a different code, modifier and rate in the next state, or under another program in the same state.

The claim must also carry the identifiers of ordering or referring practitioners, because federal rules require those practitioners to be enrolled and their National Provider Identifier to appear on the claim.

8. Enrollment and screening

An agency cannot bill Medicaid until the state has screened and enrolled it. Federal rules set three screening levels by risk of fraud, waste and abuse. Limited screening verifies licenses and checks federal databases. Moderate screening adds site visits before and after enrollment. High screening adds criminal background checks and fingerprints. States assign provider types to levels, check the federal exclusion lists no less often than monthly, and revalidate every provider at least every 5 years.

9. What the regulator inspects

The settings rule. Since the 2014 home and community-based services final rule, services under 1915(c), 1915(i) and 1915(k) must be delivered in settings that are integrated in and support full access to the greater community, are chosen by the individual, and protect privacy, dignity, respect and freedom from coercion and restraint. Provider-owned residential settings carry added conditions, such as a lease or equivalent agreement, lockable doors, choice of roommate, access to food and visitors. The transition period for states to comply ended on March 17, 2023.

The 2024 access rule. The Ensuring Access to Medicaid Services final rule added several requirements for home and community-based services. The one that reaches an agency’s books is payment adequacy: states must ensure that at least 80 percent of total Medicaid payments a provider receives for homemaker, home health aide and personal care services is spent on compensation for direct care workers. Compensation includes wages, benefits and the employer’s share of payroll taxes. The regulation makes the standard applicable beginning 6 years after July 9, 2024, which is July 2030, with state reporting beginning earlier. States may set a separate level for small providers and a hardship exemption through a transparent process. The rule also requires a state grievance system for fee-for-service programs, incident management standards covering abuse, neglect, exploitation and other critical incidents, and public reporting of waiver waiting lists and of a standard set of quality measures.

Licensure surveys, contract monitoring, plan audits and verification reviews read the same facts: was the service authorized, was the worker qualified, was the visit verified and documented, and was supervision on time.

10. What ends or renews the case

The authorization period ends and is renewed after reassessment. The service plan is reviewed at least annually. Level of care is reevaluated. Medicaid eligibility itself is redetermined, and a lapse stops payment even when the need has not changed. A move to another plan ends one authorization and requires another. A hospital or nursing facility stay interrupts service.

What software has to do

In this line the difficulty is rarely the single visit. It is the volume, the number of rulebooks, and the fact that every rule belongs to a state, a program or a plan. Each of the six engines has a specific job.

One operating chain

An agency with a Medicaid line usually has others: Medicare home health, VA referrals, private-pay clients. The aide, the nurse, the personnel file and the surveyor are shared. The patient, the order, the clinician, the visit, the evidence, the obligation and the money are views of the same event. Medicaid changes the authority behind the service plan, the proof required of the visit and the address on the claim.

Personal care and home care →   VA Community Care →   Payer and program models →   Continuous compliance →