top of page

Changes to Medicare Home Health Care Coverage

Article originally featured on Verywell Health

Shifting to Value-Based Care With the Patient-Driven Groupings Model

If you have recently been hospitalized or are otherwise homebound, you may benefit from home health care. Medicare offers coverage, but the program is changing. Learn how these changes affect your ability to get the care you need.

Covered Home Health Services

Medicare home health care coverage is on a part-time, not full-time, basis. If you need care 24 hours a day, expect to pay out of pocket.

Skilled care may be covered if it occurs less than seven days per week (up to 28 hours per week for skilled nursing and/or home health aide care) or if it occurs less than eight hours a day up to 21 weeks. It may be possible to extend that duration of coverage under special circumstances.

Not all care is skilled. If someone without medical training can perform it, it is not considered skilled care. Skilled care, for the purposes of Medicare, includes the following:

It does not include meal deliveries to the home, custodial care (e.g., help with dressing, feeding, or toileting), or homemaker services (e.g., help with cleaning, laundry, or shopping).

Exceptions to the Rule

Medical social services or occupational therapy alone are not sufficient to qualify for home health care on their own. You must also use another skilled service to qualify for coverage.

Home Health Care Medicare Requirements

For Medicare to cover your home health care, you must demonstrate a medical need. Specifically, you must be homebound. That means either you are unable to leave your home without assistance, it is recommended you not leave your home based on your medical condition(s), or it is physically taxing to leave your home.

This does not mean you cannot leave your home. Medicare will not hold coverage if you leave your home for medical care, adult day care, or religious services. Short, infrequent absences for non-medical reasons (e.g., attending a family event) should not count against you either.

A doctor or nurse practitioner must certify that you are homebound. The certification is based on a face-to-face visit that occurs 90 days before starting home health care or within 30 days of your starting home health services.

The certification outlines your care plan over a 60-day period. Recertifications must be reviewed and approved by your healthcare provider every 60 days but do not require additional face-to-face visits.

A Medicare-certified home health agency must deliver care or it will not be covered. To find a reputable agency in your area, Medicare offers a searchable database at Home Health Compare.

Spending on Medicare Home Health Care

It has been estimated that 4.4 million seniors on Original Medicare (Part A and Part B) are homebound, but only 11% of them received home-based care between 2011 and 2017.1 In 2018, approximately 6.4 million Medicare beneficiaries were hospitalized, potentially in need of home health services.2 Altogether, 3.3 million people required home health services that year.3

Medicare spent $17.9 million on home health care in 2018.3 According to the Medicare Payment Advisory Commission, these payments exceeded providers' costs to administer those services. Home health agencies reported profits as high as 17.5% in 2017.4

To decrease Medicare spending, the Medicare Payment Advisory Commission recommended a 5% reduction in payments to home health agencies by 5% for 2020. It was presumed that these agencies would still remain profitable and that the payment reductions would not disincentivize them from caring for Medicare beneficiaries.

Patient-Driven Groupings Model

The Home Health Patient-Driven Groupings Model (PDGM), which started on January 1, 2020, also attempts to curb Medicare costs. The goal is to shift from a fee-for-service model to a value-based model for home health care. Emphasizing quality over volume, PDGM considers the following categories to determine how much Medicare will pay for your home health services:5

  • Admission source: Medicare will pay home health agencies more if you were in an institutionalized facility (e.g., a hospital or nursing home) before starting services. Care from a community setting may offer lower reimbursements.

  • Timing: Instead of 60-day intervals, Medicare would look at care given in 30-day periods labeled early and late. Early care is expected to be more acute and would likely qualify for higher payments.

  • Clinical grouping: You would be categorized into one of 12 groups including behavioral health care, complex nursing interventions, medication management/teaching/assessment (MMTA, includes seven categories), musculoskeletal rehabilitation, stroke rehabilitation, and wound care. Different payment rates are set for each category.

  • Functional impairment: Based on your ability to perform activities of daily living (e.g., bathing, dressing, grooming, transferring, and walking), you would be ranked as low, medium, or high risk. The higher the risk, the higher the payment.

  • Comorbidity adjustment: Having pre-existing conditions could impact your clinical progress. PDGM acknowledges this and increases payments based on the following ranking: none, low (one chronic condition), or high (two or more chronic conditions).

Pros and Cons of PDGM

PDGM hopes to identify people in the greatest clinical need and those who will benefit from extended services. With concerns that some home health agencies may have billed for unnecessary treatments in the past, it also aims to cut back on the overuse of therapy for people who may not need or benefit from it.

Despite its good intentions, this model could backfire if home health agencies cherry-pick their clients, favoring short-term therapy after a hospital stay or stay in a rehabilitation facility because it will pay them more.

The Centers of Medicare & Medicaid Services (CMS) needs to carefully monitor outcomes to assure that all Medicare beneficiaries have adequate access and can still get the care they need.

A Word From Verywell

Millions of people use home health care services every year. Changes to Medicare coverage in 2020 shifted the focus from quantity of care to quality of care.

The new value-based model disrupts how home health care is reimbursed. Still, questions remain if it will financially incentivize home health agencies to change the types of services it offers or limit services for some Medicare beneficiaries. Reach out to your healthcare provider if you think you could benefit from home health care.


bottom of page