FOOTNOTES APPLICABLE TO SERVICES

Ambulance Services
All states cover transportation by ambulance to the nearest hospital for emergency treatment. Transportation is also generally available by air or watercraft when medically necessary; often a state will require prior approval for lengthy trips, e.g., for specialized treatment at an out of state or off-island facility. Ambulance transportation is also available, in some of the states, for non-emergency trips for health care when other modes of travel are not medically appropriate, e.g., a nursing home resident whose fragile medical condition requires both an attendant and prone transport. A physician’s order and documentation of medical necessity, and in some cases prior approval, is typically required for payment.

The predominant reimbursement methodology used by states for ambulance services is “fee for service”. This means the jurisdiction has established a maximum payment amount for a particular component of the service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. The methodology and payment rates may be different for hospital-owned ambulance services and are not always reflected on these tables. States often pay a base rate, or trip rate, and add a mileage rate usually based on the number of miles from the pick-up point to the hospital destination. Higher payment may be allowed for specialized equipment or staff required during the transport. Conversely, lower payment may be made per beneficiary if multiple passengers are transported. Reimbursement rates for air or watercraft transports are typically based on “reasonable charge” to the general public.

Certified Registered Nurse Anesthetist Services
Certified registered nurse anesthetists (CRNAs) provide anesthesia and related services during surgical procedures. They may provide them under the direction or supervision of a physician, either the surgeon or an anesthesiologist, or they may provide them independently. They may have independent practices or they may be employed by a physician anesthesiologist, a physician group practice, a hospital or a freestanding ambulatory surgery center. States may require that their services be billed by these providers, or states may permit the CRNAs to bill independently. It is not uncommon, though, for a state to require an independent CRNA to have a collaborative agreement with a physician. The Certified Registered Nurse Anesthetist Services table reflects only those instances where a state has opted to allow CRNAs to bill directly for their services. It is important to also review the prior approval requirements and coverage limitations appearing on the tables associated with Physician, Inpatient and Outpatient Hospital and Clinic/Freestanding Ambulatory Surgery Center services.

The predominant reimbursement methodology used by states for CRNA services is “fee for service”. This means the state has established a maximum payment amount for a particular service, and pays the lesser of the provider’s charge or this amount. Some states use the Resource Based Relative Value Scale (RBRVS) to set reimbursement rates for CRNA services in the same way they use RBRVS to set reimbursement rates for physician services. Several states pay CRNAs less for anesthesia services than they pay physicians; this reduced fee is noted on the table.

Chiropractor Services
Most states that cover the services of chiropractors limit the benefit to manual manipulation of the spine to treat a subluxation demonstrated by x-ray. Not all states allow chiropractors to bill for the x-ray.

The predominant reimbursement methodology used by states for chiropractor services is “fee for service”. This means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.

Clinic Services, by an Organized Facility or Clinic not part of a Hospital: Freestanding Ambulatory Surgery Center
Clinic services are preventive, diagnostic, therapeutic, rehabilitative or palliative services furnished by a facility that is not part of a hospital but is organized and operated to provide medical care to outpatients. Services are furnished by or under the direction of a physician or dentist. States cover services in many different types of freestanding clinic settings, many with specific missions. For example, some states cover birthing centers under this category while others use it to reimburse freestanding dialysis centers. This table focuses on freestanding ambulatory surgery centers, which provide an alternative to the outpatient hospital setting for surgical procedures safely performed other than in an inpatient hospital setting. It is important to also review the prior approval requirements and coverage limitations appearing on the tables associated with Outpatient Hospital and Physician services, because many of these requirements typically apply to freestanding ambulatory surgery centers as well.

States use varied reimbursement methodologies for services in freestanding ambulatory surgery centers. Some provide additional reimbursement to cover facility costs; others pay for services at the same rates as would be paid if the services were rendered in a physician office. Reimbursement methodologies have been generalized for purposes of this table as follows:

• “Fee for service” means the state has established a maximum payment amount for a particular service and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.
• “Cost based payment” means there is a year-end settlement process or some documentation of actual cost is required to justify payment, while “prospective payment” means there is not such a process although the payment rates are generally based on historical cost.
• Some states make an “all-inclusive” payment for an encounter or episode of care rather than separate payment for each service rendered. The most common of these is Medicare’s Ambulatory Surgery Center (ASC) methodology.
• Some states negotiate payment rates.

Clinic Services, by an Organized Facility or Clinic not part of a Hospital: Public Health and Mental Health Clinics
Clinic services are preventive, diagnostic, therapeutic, rehabilitative or palliative services furnished by a facility that is not part of a hospital but is organized and operated to provide medical care to outpatients. Services are furnished by or under the direction of a physician or dentist. Services may be rendered at the clinic location or at another site by clinic personnel for a beneficiary who does not reside in a permanent dwelling or have a fixed home or mailing address. Clinics are often operated by local health departments or community mental health agencies.

The scope of services provided at the public health clinics is comparable to what physicians and dentists provide in their offices. Many local health departments provide well child exams and comprehensive health assessments at these clinics as required under the EPSDT regulations. In addition, mental health clinics offer a wide range of psychiatric therapy and day treatment services for beneficiaries with mental illness or developmental disabilities.

It is important to note that some states provide mental health services through the Rehabilitation Services benefit option instead of or in addition to the Clinic Services benefit; therefore, the table associated with Rehabilitation Services should also be reviewed. The prior approval requirements and coverage limitations appearing on the tables associated with Physician and Psychologist services are also relevant because many of these requirements typically apply to clinics as well.

States use varied reimbursement methodologies for clinic services. These have been generalized for purposes of this table as follows:

• “Fee for service” means the state has established a maximum payment amount for a particular service and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.
• “Cost based payment” means there is a year-end settlement process or some documentation of actual cost is required to justify payment, while “prospective payment” means there is not such a process although the payment rates are generally based on historical cost.
• Some states make a “capitated” payment for the population to be served, basing the monthly payment on estimates of both the cost of service and the number of beneficiaries to be served.
• Some states negotiate payment rates.

Dental Services
It is important to note that the Dental Services table reflects limitations on adult benefits, e.g., the number of exams and cleanings covered in a year. Federal law and regulations related to the EPSDT program require states to provide medically necessary services for children. Accordingly, services such as exams and cleanings are generally covered more frequently for children than for adults. Further, services that may not be covered for adults are often available for children, although states may use a prior approval process to assure medical necessity and appropriate utilization.

States often require prior approval for expensive or extensive procedures such as multiple extractions, root canals and crowns. For a complete picture of a state’s coverages related to the services of dentists, it is important to also review the tables related to Medical and Surgical Services of Dentists and Dentures.

The predominant reimbursement methodology used by states for dental services is “fee for service”. This means the state has established a maximum payment amount for a particular service and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.

Dentures
State policies relative to coverage of dentures for adults vary greatly. Some states don’t cover dentures at all, some limit coverage to one set of dentures every five or ten years, others limit coverage to certain populations such as pregnant women, and still others limit coverage to conditions associated with trauma or disease. Coverage of partial dentures is generally limited by the number of teeth remaining in the beneficiary’s mouth. It is typical that dentures will only be replaced if they cannot be repaired or relined to fit properly. States often require prior approval for initial and replacement dentures to assure medical necessity and appropriateness. For a complete picture of a state’s coverages related to the services of dentists, it is important to also review the Dental Services and Medical and Surgical Services of Dentists tables.

The predominant reimbursement methodology used by states for denture services is “fee for service”. This means the state has established a maximum payment amount for a particular service and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.

Diagnostic, Screening and Preventive Services
States that choose to cover these services do so in various ways. Irrespective of whether coverage is indicated on this table, it is important to note that most states do cover one or more of the services through other providers, such as physicians.

“Diagnostic Services” are defined in federal regulations as medical procedures or supplies recommended by a physician or other licensed practitioner of the healing arts, within the scope of his or her practice under state law, to identify the existence, nature, or extent of illness, injury, or other health deviation in an individual. Examples include radiological or laboratory tests indicated by the presence of specific signs or symptoms.

Early and Periodic Screening, Diagnosis and Treatment
Federal law and regulations require states to provide Early and Periodic Screening, Diagnosis and Treatment (EPSDT) services to Medicaid eligible children under the age of 21, the purpose of which is to ascertain physical and mental defects and to provide treatment to correct or ameliorate any defects or chronic conditions found. States are to inform children and their families of the availability of EPSDT services, their benefits, and where and how to obtain them. States are also to provide transportation and scheduling assistance if requested, to assure that the children receive necessary services.

Extended Services for Pregnant Women
States are required to provide pregnancy-related services and services for other conditions that might complicate pregnancy, both during the pregnancy and for 60 days after the pregnancy ends. Pregnancy-related services are those services that are necessary for the health of the pregnant woman and fetus, or that have become necessary as a result of the woman being pregnant. They include but are not limited to prenatal care, delivery, postpartum care, and family planning. Services for other conditions that might complicate the pregnancy include those for diagnoses, illnesses, or medical conditions that might threaten the carrying of the fetus to full term or the safe delivery of the fetus. Several States provide targeted case management services as a complement to prenatal care for high-risk pregnant women during and immediately following pregnancy. Such services are directed toward the alleviation of psychosocial problems and health education deficits so to assure a healthy pregnancy outcome. The 60-day postpartum period begins on the last day of pregnancy and extends through the end of the month in which the 60-day period following termination of pregnancy ends.

Eyeglasses
It is important to note that the Eyeglasses Table reflects limitations on adult benefits, e.g., how frequently replacement eyeglasses may be obtained. Most states establish minimum diopter correction criteria for initial and replacement eyeglasses and specify the types of frames and lenses covered. Some states allow interim replacements if eyeglasses are lost or broken. Often, prior approval requirements are implemented to assure compliance with established standards and to address any medically necessary exceptions.

Family Planning Services
Federal law requires states to provide family planning services and supplies to Categorically Needy Medicaid beneficiaries of childbearing age, including minors who can be considered sexually active, if such services and supplies are desired and requested. Family planning services are an optional coverage for a state’s Medically Needy population but are universally covered. To encourage coverage of family planning services, the Federal Medical Assistance Percentage (matching rate) is 90 percent, i.e., for every dollar that a state pays for a family planning service, it may claim ninety cents in federal Medicaid funds.

Federally Qualified Health Center Services

Federal law and regulations define a Federally Qualified Health Center (FQHC) as an entity that has entered into an agreement with CMS to meet specified Medicare program requirements and that is the direct recipient of a grant under the Public Health Service Act or has been approved to receive funding from a grantee. The FQHC may be located in either a rural or urban area designated as a shortage area or in an area that has a medically underserved population. A tribe or tribal organization receiving funding under the Indian Health Care Improvement Act may operate an FQHC. While there are FQHCs operating in each of the states, Puerto Rico is the only territory with FQHCs.

FQHC services are only covered when provided in an outpatient setting, including the FQHC’s permanent site(s), a mobile unit, a nursing facility, a beneficiary’s home, or an institutional setting used as the beneficiary’s home. An FQHC provides primary health care services in the same scope as would be provided by a physician, dentist or podiatrist in the clinic or office setting. Services and supplies incident to these services are covered as well. If state law allows, an FQHC may employ physician assistants and nurse practitioners to provide services. An FQHC may also employ clinical psychologists and social workers.

It is important to also review the prior approval requirements and coverage limitations appearing on the tables associated with the aforementioned providers because those requirements typically apply to the FQHCs as well.

States are required by federal law to pay the reasonable cost of FQHC services but may pay for other ancillary services provided by the FQHCs at the same rates used by the state, or by the Medicare program, for those services. For purposes of this table, reimbursement methodologies have been generalized as follows:

• “Cost based payment” means there is a year-end settlement process, while “prospective cost based rate” per visit (encounter) or service means there is not such a process although the payment rates are based on historical cost.
• “Fee for service” means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.
• Federal law also permits states to implement alternative reimbursement methodologies, acceptable to the FQHCs, if they satisfy the “reasonable cost” requirement.

Hearing Aids
Most states establish minimum hearing loss criteria for initial and replacement hearing aids, and many require a medical exam as well as an audiological evaluation to determine if a hearing aid is medically appropriate. Some states limit the types of hearing aids covered, and many establish a limit on the number of aids and accessories, such as batteries, that beneficiaries may receive within a particular period of time. Some states allow interim replacements or repairs if aids are lost or broken. Often, prior approval requirements are implemented to assure compliance with these standards.

Home and Community-Based Services (HCBS) Waivers (Note: There is no January 2003 table for this service.)
Federal law allows State Medicaid agencies to request waivers under Section 1915(c) of the Social Security Act of certain Medicaid requirements in order to offer community-based service alternatives to institutional care provided in a nursing facility, ICF/MR or hospital. These waiver programs permit beneficiaries who meet requirements for admission to an institutional setting (or who would meet these requirements absent the HCBS waiver services within a short time frame) to receive appropriate services and supports in their homes or a community-based setting and maintain both their independence and ties to family and friends. Waiver programs may be directed broadly to the elderly and disabled or more narrowly by medical condition, such as technology dependent children with high health care needs, persons with mental retardation and/or developmental disabilities, or persons with specific medical conditions such as HIV/AIDS. Each HCBS waiver may be a statewide program or limited geographically. A state may elect to limit enrollment to beneficiaries whose cost of care in the community is no greater than the cost of care would have been in the comparable institutional setting. In most states the waivers are limited to a specific amount of state funding and/or a specific number of program participants to assure budget neutrality.
 
Each HCBS waiver may include different services targeted to the population being served and may include services such as case management, homemaker services, home health aide services, personal care, adult day health care, habilitation, and respite care, or other services defined by the State and authorized by CMS. With the exception of the territories and Arizona, every state has at least one Section 1915(c) HCBS waiver. Arizona provides home and community-based services through its comprehensive Section 1115 waiver.

Home Health Services
Home Health Services are provided to a beneficiary at his/her place of residence upon physician order as part of a written plan of care. Services include part-time or intermittent visits by a registered nurse; visits by credentialed home health aides employed by a home health agency participating in the Medicaid program; and medical supplies, equipment and appliances required by the beneficiary and suitable for use in the home. In addition, states may choose to have home health agencies provide, when medically necessary and ordered by the beneficiary’s physician, physical therapy services, occupational therapy services, and speech pathology and audiology services. Alternatively, the state may allow a home health agency to arrange for therapy services to be provided by professionals at a medical rehabilitation facility.
 
States use varied reimbursement methodologies for home health services. These have been generalized for purposes of this table as follows:

• “Fee for service” means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.
• “Cost based payment” means there is a year-end settlement process or some documentation of actual cost is required to justify payment, while “prospective payment” means there is not such a process although the payment rates are generally based on historical cost.
• Some states make payment using a “percentage of charge” to reflect cost, typically using some documentation of a provider’s historical cost to charge ratio.
• Some states negotiate payment rates.

Hospice Care
Hospice care is an optional benefit under Medicaid that most of the states but none of the territories have elected to cover under their State Plan (although Puerto Rico provides the service through other means). Though an optional benefit, a state’s election of coverage obligates adherence to many of the same requirements applicable to the Medicare program. Typically, states require beneficiaries who are dually eligible for both Medicare and Medicaid to elect Medicare hospice services as well.

Inpatient Hospital Services, other than in an Institution for Mental Diseases
Most states require prior approval for any non-emergency care out of state; the territories generally require prior approval for off island care. Prior approval is not required from Medicaid for those admissions where Medicare is the primary payer. Prior approval is generally required for major organ transplants; some states limit service to approved centers. In addition, prior approval is typically required for medically necessary cosmetic surgery, obesity services/surgery and other unique procedures.

Some states have adopted length of stay guidelines based on a publication called Length of Stay in Professional Activity Studies (PAS) Hospitals by Diagnosis, available by geographic region. Other states use their own utilization review standards to evaluate length of stay for payment purposes or rely on incentives in their reimbursement methodology to assure appropriate length of stay.

States use varied reimbursement methodologies for inpatient services. These have been generalized for purposes of this table as follows:

• “Cost based payment” means there is a year-end settlement process, while “prospective payment” means there is not such a process although the payment rates are generally based on historical cost.
• Some states make payment for each day of care, a “per diem”; others make a single payment for the hospitalization, “per discharge”. In some cases the payment includes all services, i.e., is “all-inclusive”, and in others, certain ancillary services can be billed separately.
• Several states make payment using a “percentage of charge” to reflect cost, typically using a hospital’s prior year cost report or the values established for the Medicare program to estimate the percentage of charge representing cost.
• Others use a methodology that establishes payment by the diagnosis of the patient, procedures performed and duration of stay; the most common of these methodologies is DRG. A variation would be to use “casemix”, the average acuity level of a hospital’s patients compared to its peers, to adjust payment.
• Some states establish their rates on a hospital-specific basis, while others group hospitals with their peers and/or set rates geographically.
• Some states adjust rates of reimbursement based on hospital occupancy levels.
• Some states negotiate payment rates.

Irrespective of the reimbursement methodology, some states have “frozen” rates such that they are using rates and weighting factors from an earlier point in time or they have applied budget neutrality adjustments to slow the rate of spending growth for the service. In some instances, reimbursement rates are even reduced from those historically used.

Most states pay additional amounts or adjust payments to hospitals serving a disproportionate number of Medicaid and indigent patients; these are called disproportionate share hospital (DSH) payments. States may also provide payments to promote access and support to the hospital safety net through other special financing mechanisms. Many states also make separate payments for capital and direct graduate medical education (GME) costs. These additional payments are not reflected on the table.

Inpatient Psychiatric Services, under age 21
Inpatient Psychiatric Services for individuals under age 21 must be provided under a physician’s direction. They may be provided in a freestanding psychiatric hospital or distinct part psychiatric unit of a general hospital or in an appropriately accredited residential treatment facility. If services commence before the individual reaches age 21, they may continue until the earlier of his or her 22nd birthday or the services are no longer required. Admissions often require prior approval, and periodic recertification of a resident’s continued need for care may be required as well.

Inpatient Hospital, Nursing Facility and Intermediate Care Facility Services in Institutions for Mental Diseases, age 65 and older
Institutions for Mental Diseases, or IMDs, are hospitals, nursing facilities or other institutions of more than 16 beds primarily engaged in providing diagnosis, treatment or care of persons with mental diseases, including medical attention, nursing care and related services. Such services are provided under the direction of a physician.

Intermediate Care Facility Services for the Mentally Retarded
Intermediate Care Facilities for the Mentally Retarded, or ICFs/MR, provide diagnosis, treatment, and rehabilitation of persons with mentally retardation (developmental disabilities) or related conditions. Such facilities provide, in a protected residential setting, ongoing evaluation, planning, twenty-four hour supervision, coordination, and integration of health or rehabilitative services to help each resident function at his or her greatest ability. Admissions often require prior approval, and periodic recertification of a resident’s continued need for care may be required as well.

Laboratory and X-Ray Services, Outside Hospital or Clinic
Laboratory and x-ray (radiology) services are performed in several settings, e.g., inpatient hospital, outpatient hospital, clinic and physician office, and are billed by these providers. In addition, laboratory services are often performed and billed by independent clinical laboratories. The Laboratory and X-Ray Services Table reflects policies and limitations associated with non-institutional providers and settings. However, it is also appropriate to review the prior authorization requirements and coverage limitations appearing on the Physician, Inpatient and Outpatient Hospital Services tables.

Providers of clinical laboratory services, whether physicians, institutions or independent clinical laboratories, are required under the federal Clinical Laboratory Improvement Act (CLIA) to be certified for the type of services, or diagnostic tests, performed and billed. If the stringency of a state’s licensing standards meets or exceeds those of CLIA, an exemption from the regulations is possible.

Federal regulations require that laboratory and x-ray services be ordered and performed by or under the direction of a physician. Several states preclude a clinical laboratory from billing for a laboratory test referred to and performed by another laboratory, and require the second laboratory to bill for the service.

States use two primary reimbursement methodologies for non-institutional laboratory and x-ray services. These have been generalized for purposes of this table as follows:

• “Fee for service” means the state has established a maximum payment amount for a particular service, or uses the maximum, or a percentage of the maximum, applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost. Some states use the Resource Based Relative Value Scale (RBRVS) to set reimbursement rates for laboratory and x-ray services.
• “Cost based payment” means there is a year-end settlement process or some documentation of actual cost is required to justify payment, while “prospective payment” means there is not such a process although the payment rates are generally based on historical cost.

Medical and Remedial Care-Other Practitioners (Note: There is no table for this service.)
Federal law allows states to include the services of a variety of licensed health care practitioners in their State Plan coverages. The services of the most common practitioners are addressed through tables specific to them, i.e., podiatrists, chiropractors, optometrists, psychologists and certified registered nurse anesthetists. However, there are other practitioners whose services are covered and directly reimbursed in selected states. Such practitioners include physician assistants, nutritionists, dieticians, dental hygienists, acupuncturists, mechanotherapists, naturopaths, respiratory therapists, pharmacists, medical social workers, behavioral health practitioners and counselors, pastoral counselors, marriage and family therapists, and sign and other language interpreters. States that include these services generally establish copayment and prior approval requirements as well as coverage limitations consistent with other similar services.

Medical Equipment and Supplies
Most states cover medical equipment and supplies suitable for use in the home as an alternative to institutionalization, if they are prescribed by a physician or other licensed practitioner of the healing arts within the scope of his/her practice as defined by state law. Many states impose prior approval requirements for some or all of these items. Some states do not purchase items for beneficiary use and will only rent them for a period of time. Other states purchase items but do so through a “rent to purchase” method where a portion of the payment is made monthly for ten to twelve months until the cost of the item has been reached.
 
The predominant reimbursement methodology used by states for medical equipment and supplies is “fee for service”. This means the state has established a maximum payment amount for a particular item or service, or uses the maximum applicable to the Medicare program for the item or service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost. Some states accept and pay “reasonable charge” or make payment using a “percentage of charge” to reflect cost, typically using some documentation of a provider’s historical cost to charge ratio. States may also negotiate prices or individually price customized items for which no code or fee screen has been established. It is not uncommon for states to require that specified items be purchased from a contracted vendor.

Medical/Surgical Services of a Dentist
Medical and surgical services of a dentist are those services that if furnished by a physician would be considered physician’s services. They are services that, in accordance with state law, may be performed by either a physician or a dentist. For a complete picture of a state’s coverages related to the services of dentists, it is important to also review the tables related to Dental Services and Dentures.

Non-Emergency Medical Transportation Services
Most states cover non-emergency medical transportation to enable Medicaid beneficiaries to obtain covered medical services from both local providers and from tertiary care centers at some distance from their homes. Several of the states assure appropriate utilization through prior approval processes or may set limits on the number of trips allowed per month. Others contract with local community agencies or vendors to coordinate the services.

Nurse Midwife Services
The services provided by nurse midwives vary by state and are dependent on licensure and scope of practice requirements. Nurse midwives may have independent practices or a physician or physician group practice may employ them. Many states require nurse midwives to have collaborative agreements with or be sponsored (or backed-up) by physicians.

Nurse Practitioner Services
The services provided by nurse practitioners vary by state and are dependent on licensure and scope of practice requirements. Nurse practitioners may have independent practices or they may be employed by a hospital or by a physician or physician group practice. This table reflects only those instances where a state has opted to allow nurse practitioners to bill directly for their services. 

Nursing Facility Services, other than in an Institution for Mental Diseases
Most states require some form of approval for nursing facility services. If not a formal prior approval process, the state may require the nursing facility to maintain or submit documentation to assure level of care criteria are met. Many states also require periodic recertification of a resident’s continued need for the nursing facility level of care.

Occupational Therapy Services
Occupational therapy services are provided in several settings, e.g., inpatient hospital, outpatient hospital and nursing facility, or through a home health agency, and are billed by these providers as the employers of occupational therapists. The services may also be provided by occupational therapists employed by or under contract to school districts for Medicaid beneficiaries whose Individualized Education Plan or Individualized Family Services Plan includes the services. The Medicare program allows direct reimbursement to independent occupational therapists rendering services in their offices, clinics or medical rehabilitation facilities which in turn requires states to allow direct reimbursement for coinsurance and deductible amounts associated with services for Qualified Medicare Beneficiaries (QMBs), including those dually eligible for Medicaid. Some states have also elected to extend this direct reimbursement option for services to Medicaid beneficiaries who do not also qualify for Medicare. In many states, the service requires prior approval for both initiation of therapy and periodically thereafter. The Occupational Therapy Services Table reflects only those instances where states have opted to allow occupational therapists to bill directly for services rendered to adult Medicaid beneficiaries who are not also covered by Medicare.
 
The predominant reimbursement methodology used by states for occupational therapy services is “fee for service”. This means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.

Optometrist Services
Most states establish frequency limits within which beneficiaries may receive a refractive exam for eyeglasses. It is important to note that the Optometrist Services Table reflects limitations on adult benefits, e.g., how frequently refractive exams for eyeglasses may be obtained. Many states also limit the scope of vision services for which an optometrist may bill and receive payment. Some states include the services of optometrists in visit limits established for multiple types of practitioners. Often, prior approval requirements are implemented to assure compliance with established standards and to address any medically necessary exceptions.

Outpatient Hospital Services
Most states require prior approval for any non-emergency care out of state; the territories generally require prior approval for off island care.
Prior approval is not required for services if the state’s payment is limited to Medicare coinsurance and/or deductible amounts. Prior approval is generally required for cosmetic surgery, obesity services/surgery and other unique procedures. Most states do not cover routine physical exams in the outpatient hospital setting.

Several states require a copayment for visits to a hospital emergency department; some limit the requirement to visits that are not for emergency treatment.

States use varied reimbursement methodologies for outpatient hospital services. These have been generalized for purposes of this table as follows:

• “Fee for service” means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.
• “Cost based payment” means there is a year-end settlement process, while “prospective payment” means there is not such a process although the payment rates are generally based on historical cost.
• Some states make an “all-inclusive” payment for an encounter or episode of care rather than separate payment for each service rendered. The most common of these methodologies is Medicare’s Ambulatory Payment Classifications (APCs). Depending on the services rendered, however, a hospital may be entitled to payment of more than one APC for an encounter.
• Some states make payment using a “percentage of charge” to reflect cost (or the allowable portion of that cost), typically using a hospital’s prior year cost report or the values established for the Medicare program to estimate the percentage of charge representing cost. These payments may or may not be settled at year-end.
• Some states negotiate payment rates.

Personal Care Services
Personal Care Services, sometimes called personal attendant or personal assistance services, include a range of human assistance provided to beneficiaries with disabilities and chronic conditions of all ages. The services enable these beneficiaries to accomplish tasks they would normally do for themselves if they did not have a disability. Provision of these services in the beneficiary’s home is an alternative to institutionalization. Assistance may be in the form of direct provision of a task or cuing so that the beneficiary performs the task. Such assistance most often relates to activities of daily living such as eating and drinking, bathing, dressing, grooming, toileting, transferring and mobility. Other supportive services may include light housework, laundry, meal preparation, transportation, grocery shopping and medication or money management. States often provide personal care services through their HCBS waiver programs as well.
 
States use varied reimbursement methodologies for personal care services. These have been generalized for purposes of this table as follows:

• “Fee for service” means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Payment could be on an hourly basis or perhaps a daily “per diem”.
•  “Cost based payment” means there is a year-end settlement process or some documentation of actual cost is required to justify payment.
• Some states negotiate payment rates.

Physical Therapy Services
Physical therapy services are provided in several settings, e.g., inpatient hospital, outpatient hospital, nursing facility and physician office, or through a home health agency, and are billed by these providers as the employers of physical therapists. The services may also be provided by physical therapists employed by or under contract to school districts for Medicaid beneficiaries whose Individualized Education Plan or Individualized Family Services Plan includes the services. The Medicare program allows direct reimbursement to independent physical therapists rendering services in their offices, clinics or medical rehabilitation facilities which in turn requires states to allow direct reimbursement for coinsurance and deductible amounts associated with services for Qualified Medicare Beneficiaries (QMBs), including those dually eligible for Medicaid. Some states have also elected to extend this direct reimbursement option for services to Medicaid beneficiaries who do not also qualify for Medicare. In many states, the service requires prior approval for both initiation of therapy and periodically thereafter. The Physical Therapy Services Table reflects only those instances where states have opted to allow physical therapists to bill directly for services rendered to adult Medicaid beneficiaries who are not also covered by Medicare.
 
The predominant reimbursement methodology used by states for physical therapy services is “fee for service”. This means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost. Some states make payment using a “percentage of charge” to reflect cost, typically using some documentation of a provider’s historical cost to charge ratio.

Physician Services
This table is applicable to both allopathic physicians (M.D.s) and osteopathic physicians (D.O.s). Several states establish limits on the number of physician office visits covered for adult Medicaid beneficiaries during a year. In some instances these limits are in combination with other types of practitioners, such as podiatrists. It is also common for states to have different visit limits for beneficiaries residing in nursing facilities rather than in their own homes. It is important to also review the prior approval requirements and coverage limitations appearing on the Inpatient and Outpatient Hospital Services tables.

The predominant reimbursement methodology used by states for physician services is “fee for service”. This means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost. Some states use the Resource Based Relative Value Scale (RBRVS) to set reimbursement rates for physician services. The RBRVS considers resource costs needed to provide each service and applies a relative value to each.

Podiatrist Services
Several states establish limits on the number of podiatrist office visits covered for adult Medicaid beneficiaries during a year. In some instances these limits are in combination with other types of practitioners, such as physicians. It is also common for states to have different visit limits for beneficiaries residing in nursing facilities rather than in their own homes. Some states limit coverage to adult beneficiaries suffering from systemic conditions such as diabetes. It is important to also review the prior approval requirements and coverage limitations appearing on the Inpatient and Outpatient Hospital and Physician Services tables.

Prescription Drugs
Drugs still under patent protection are available from a “single source” under a “brand” name. When the drugs lose their patents, they are generally copied (identically or similarly) and are then available from “multiple sources” as “generic” versions of the original drug. To encourage use of lower cost drugs, states often vary their beneficiary cost sharing (copayment) requirements for brand and generic drugs.

Most drugs are dispensed in 30 to 35-day supplies, however certain products, such as antibiotics, may be dispensed in quantities for as few as 3 to 10 days based on the treatment regimen, and other products, such as oral contraceptives or drugs for chronic conditions like high blood pressure, may be dispensed in quantities for as many as 100 days. Prior approval is typically required for any drug product not normally covered by a state’s Medicaid program; for “off-label use”, i.e., for a condition not typically treated with the product; and in some cases for compounded drugs (made from a combination of ingredients). Prior approval is generally required as well for exceptions to the limits stated, e.g., days’ supply or number of prescriptions in a month. In addition, several states have established “preferred drug lists” (PDLs) that include products determined to be clinically effective and available at a lower cost; prior approval is not required for these products. To have additional products included on the lists, manufacturers often agree to rebate to the state a portion of the product cost or provide services of comparable value.

Some states require generic drug dispensing, when such a product is available, unless a prescriber orders that a specific product be dispensed as written (DAW).

States use varied reimbursement methodologies for prescription drugs. Most estimate the pharmacy’s acquisition cost for a drug and add a dispensing fee. The most common methodologies for drug cost pricing use “AWP” or “WAC”.

• AWP means Average Wholesale Price, generally a drug wholesaler’s published price for a product. Pharmacies are often able to purchase products at a discount, i.e., price less a percentage discount, so many states limit drug cost reimbursement to that estimated net amount. Some states use deeper discounts for pharmacy chains than for independent stores; states may also use a deeper discount for single source brand name products as an incentive for pharmacies to use multiple source generic products.
• WAC means Wholesale Acquisition Cost, generally a drug manufacturer’s price for a product. Drug wholesalers purchase the product and add a percentage before selling it to pharmacies.

Federal upper payment limits (FULs) have been set for many multiple source drug products, and states are required to assure that their payments do not exceed these limits. In addition, many states set their own Maximum Allowable Costs (MACs) for other multiple source drug products. Although not referenced in the tables, reimbursement methodologies recognize these upper limits.

Dispensing fees may vary depending on whether the drug dispensed is a single source (brand) product or a multiple source (generic) product, whether the drug appears on the state’s PDL, or whether the drug dispensed is a compound. Dispensing fees may also vary by geographical location of the pharmacy or the volume of Medicaid prescriptions filled.

Some states also apply different drug cost discounts to products dispensed by non-traditional pharmacies that specialize in serving residents in nursing facilities because many of these prescriptions are issued in a unit-dose form. Dispensing fees are often different for these providers as well.

Coverage limitations and reimbursement methodologies associated with drugs administered in a physician office, clinic or outpatient hospital setting are not reflected on this table. Coverage limitations are associated with the provider of service. Drug cost reimbursement varies by setting but is generally based on acquisition cost or is reflected in the procedure code associated with the drug’s administration.

Private Duty Nursing Services
Private duty nursing services are provided for a beneficiary who requires more individual and continuous care than is available from a visiting home health agency nurse or routinely provided by the nursing staff of a hospital or skilled nursing facility. Typically, the beneficiary is technology-dependent, e.g., reliant on mechanical ventilation or assisted respiration, or requires frequent oral or tracheostomy suctioning or nasogastric tube feedings or medications. These services are provided by a Registered Nurse (RN) or a Licensed Practical Nurse (LPN), under the direction of a physician, in a hospital or skilled nursing facility or in the beneficiary’s home.

Program of All-Inclusive Care for the Elderly (PACE) (Note: There is no January 2003 table for this service.)
PACE features a comprehensive service delivery system and integrated Medicare and Medicaid financing. PACE sites provide an array of primarily long-term care services in an adult day health center setting, supplemented with in-home and referral services as necessary. A few states have multiple PACE sites (Massachusetts, New York and Ohio) but the other states identified on the table each have only one approved site (provider). PACE participants must be at least 55 years of age and be certified by the state as eligible for nursing facility care but able to live safely in the community. PACE providers are required to provide the full scope of Medicare benefits as well as all Medicaid covered services in their state for all participants, including prescription drugs, hospital and nursing facility care, irrespective of payment source. Primary care, social services, therapies, personal care and supportive services, nutritional counseling, recreational therapy, and meals are provided at the adult day health center. PACE sites serve small populations, often fewer than 200 persons.

Prosthetic and Orthotic Devices
Prosthetic and Orthotic Devices are replacement, corrective, or supportive devices prescribed by a physician or other licensed practitioner of the healing arts within the scope of his/her practice as defined by state law to artificially replace a missing portion of the body, to prevent or correct a physical deformity or malfunction, or to support a weak or deformed portion of the body.

The predominant reimbursement methodology used by states for these devices is “fee for service”. This means the state has established a maximum payment amount for a particular item or service, or uses the maximum applicable to the Medicare program for the item or service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost. Some states accept and pay “reasonable charge” or make payment using a “percentage of charge” to reflect cost, typically using some documentation of a provider’s historical cost to charge ratio. States may also negotiate prices or individually price customized items for which no code or fee screen has been established. Back

Psychologist Services
Psychologist services are provided in several settings, e.g., community mental health clinic, outpatient hospital and physician office, and are billed by these providers as employers of the psychologists. The services may also be provided by psychologists employed by or under contract to school districts for Medicaid beneficiaries whose Individualized Education Plan or Individualized Family Services Plan includes the services. The Medicare program allows direct reimbursement to independent psychologists rendering covered services in their offices and clinics which in turn requires states to allow direct reimbursement for coinsurance and deductible amounts associated with services for Qualified Medicare Beneficiaries (QMBs), including those dually eligible for Medicaid. Some states have also elected to extend this direct reimbursement option for services to Medicaid beneficiaries who do not also qualify for Medicare. The Psychologist Services Table reflects only those instances where states have opted to allow psychologists to bill directly for services rendered to adult Medicaid beneficiaries who are not also covered by Medicare.
 
The predominant reimbursement methodology used by states for psychologist services is “fee for service”. This means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.

Rehabilitation Services: Mental Health and Substance Abuse
Rehabilitation, or rehabilitative, services include any medical or remedial services recommended by a physician or other licensed practitioner of the healing arts, within the scope of his or her practice under state law, for maximum reduction of physical or mental disability and restoration of a beneficiary to his best possible functional level. By their nature, such services are rendered in a number of different settings by virtually the entire spectrum of health care providers. This table focuses on a subset of rehabilitation services related to mental health and substance abuse. It is important to note that some states provide mental health services through the Clinic Services benefit option instead of or in addition to the Rehabilitation Services benefit; therefore, the table associated with Clinic Services should also be reviewed. The prior approval requirements and coverage limitations appearing on the tables associated with Physician and Psychologist services are also relevant because many of these requirements typically apply to Rehabilitation Services providers as well.

Rehabilitation services for mental health and substance abuse are provided in a wide range of settings not all of which are covered by every state. A few examples of rehabilitation services include outpatient mental health assessment and counseling; partial hospitalization programs of structured group activities for multiple hours during a day; and assertive community treatment comprised of intensive therapy, skill training and other community support services for beneficiaries difficult to engage in treatment.

States use varied reimbursement methodologies for rehabilitation services related to mental health and substance abuse. These have been generalized for purposes of this table as follows:

• “Fee for service” means the state has established a maximum payment amount for a particular service and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.
• “Cost based payment” means there is a year-end settlement process or some documentation of actual cost is required to justify payment, while “prospective payment” means there is not such a process although the payment rates are generally based on historical cost.
• Some states make a “capitated” payment for the population to be served, basing the monthly payment on estimates of both the cost of service and the number of beneficiaries to be served.
• Some states negotiate payment rates.

• Back

  Religious Non-Medical Health Care Institution and Practitioner Services
  A Religious Non-Medical Health Care Institution (formerly called a Christian Science Sanatorium) provides both hospital and post-discharge skilled nursing facility services. Such facilities are licensed by the few states in which they are located and furnish only non-medical nursing items and services to beneficiaries who choose to rely solely upon a religious method of healing and for whom the acceptance of medical health services would be inconsistent with their religious beliefs. These services are provided on a 24-hour basis exclusively by non-medical nursing personnel who are experienced in caring for the physical needs of patients. States may require prior approval for admissions.

  States typically reimburse these institutions on a “per diem” basis. The per diem may be a standard rate applicable to all facilities or may be facility-specific. In addition, states may adjust the per diem based on the acuity level (or intensity of care needed) by facility residents. Generally, a reference in the table to “cost based payment” means there is a year-end facility-specific settlement process, while “prospective payment” means there is not such a process although the payment rates are based on historical cost. If practitioner services are covered, states use a fee for service methodology, which means the state establishes a maximum payment amount for a particular service and pays the lesser of the provider’s charge or this amount, or they negotiate payment rates.

  Back

  Rural Health Clinic Services
  Federal law and regulations define a Rural Health Clinic (RHC) as a facility located in an area that is not urbanized and in which there is an insufficient number of health care practitioners. An RHC must be so designated by both a state’s chief executive officer and the Secretary of Health and Human Services. Because of these requirements, not all states have RHCs.

  Some RHCs are identified as “provider-based clinics” because they are integral parts of a hospital, skilled nursing facility or home health agency and are licensed, governed and supervised with other departments of the facility or agency. RHCs without such affiliation are identified as “independent clinics”.

  An RHC provides primary health care services in the same scope as would be provided by a physician or other practitioner, e.g., dentist, podiatrist, chiropractor, optometrist, in the outpatient hospital, clinic or office setting. Services and supplies incident to these services are covered as well. If state law allows, an RHC may employ physician assistants and nurse practitioners to provide primary health care services. An RHC may also employ clinical psychologists and clinical social workers and, if there is a shortage of home health agencies in the area, may provide part-time or intermittent nursing care.

  It is important to also review the prior approval requirements and coverage limitations appearing on the tables associated with the aforementioned providers because those requirements typically apply to the RHCs as well.

  States are required by federal law to pay the reasonable cost of RHC services but may pay for other ancillary services provided by the RHCs at the same rates used by the state, or by the Medicare program, for those services. For purposes of this table, reimbursement methodologies have been generalized as follows:

  • “Cost based payment” means there is a year-end settlement process, while “prospective cost based rate” per visit (encounter) or service means there is not such a process although the payment rates are based on historical cost.
  • “Fee for service” means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.
  • Federal law also permits states to implement alternative reimbursement methodologies, acceptable to the RHCs, if they satisfy the “reasonable cost” requirement.
  Back

  Services for Speech, Hearing and Language Disorders
  Services for beneficiaries with speech, hearing and language disorders are diagnostic, screening, preventive, or corrective services provided by or under the direction of a speech pathologist or audiologist. The services may be provided in the inpatient or outpatient hospital setting and billed by the hospital as employer of the speech pathologist or audiologist. The services may also be provided by speech pathologists and audiologists employed by or under contract to school districts for Medicaid beneficiaries whose Individualized Education Plan or Individualized Family Services Plan includes the services. The Medicare program allows direct reimbursement to independent speech pathologists and audiologists rendering services in their offices, clinics or medical rehabilitation facilities which in turn requires states to allow direct reimbursement for coinsurance and deductible amounts associated with services for Qualified Medicare Beneficiaries (QMBs), including those dually eligible for Medicaid. Some states have also elected to extend this direct reimbursement option for services to Medicaid beneficiaries who do not also qualify for Medicare. In many states, the service requires prior approval for both initiation of therapy and periodically thereafter. The Services for Speech, Hearing and Language Disorders Table reflects only those instances where states have opted to allow speech pathologists and audiologists to bill directly for services rendered to Medicaid beneficiaries who are not also covered by Medicare.
   
  The predominant reimbursement methodology used by states for these services is “fee for service”. This means the state has established a maximum payment amount for a particular service, or uses the maximum applicable to the Medicare program for the service, and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost. Some states make payment using a “percentage of charge” to reflect cost, typically using some documentation of a provider’s historical cost to charge ratio.

  Back

  Targeted Case Management
  

  Targeted Case Management is a service that assists beneficiaries in gaining and coordinating access to necessary medical, social, and educational care and other services appropriate to their needs. It is intended for beneficiaries who do not reside in institutions. The service may be provided as an integral and inseparable part of another covered service, such as a home health agency nurse’s preparation of a treatment plan. It may be provided by Medicaid agency staff through utilization review, prior approval or other administrative activities. It may also be provided as a separate service by appropriately qualified case managers.
   
  A majority of the states make the service available to at least one group, and several states offer targeted case management services to a number of different groups, including:

  • Beneficiaries with specific medical conditions or reportable communicable diseases such as cerebral palsy, epilepsy, asthma, diabetes, sickle cell anemia, hemophilia, traumatic brain injury, dementia, HIV/AIDS, or tuberculosis;
  • Elderly or disabled beneficiaries of any age at risk of institutionalization due to multiple physical or mental diagnoses, including those who are medically fragile and technology dependent and/or with very costly health care needs;
  • Severely emotionally disturbed or neurologically impaired children;
  • Beneficiaries of varying ages with substance abuse problems, chronic mental illness and/or developmental disabilities, including those who may be transitioning to community placement;
  • At risk pregnant women, or young mothers and their infants;
  • Children with high blood lead levels;
  • Beneficiaries with severe vision or other sensory impairments;
  • Children in foster care or state custody or who are at risk of out of home placement;
  • Beneficiaries of any age at risk of abuse or neglect; or
  • Refugees or immigrants having difficulty accessing health care due to language proficiency.

  States use varied reimbursement methodologies for targeted case management services, dependent in part on the provider rendering the service. These have been generalized for purposes of this table as follows:

  • “Fee for service” means the state has established a maximum payment amount for a particular service and pays the lesser of the provider’s charge or this amount. Often the payment is capped by an estimate of cost.
  • “Cost based payment” means there is a year-end settlement process or some documentation of actual cost is required to justify payment, while “prospective payment” means there is not such a process although the payment rates are generally based on historical cost.
  • Some states make a “capitated” payment for the population to be served, basing the monthly payment on estimates of both the cost of service and the number of beneficiaries to be served.
  • Some states negotiate payment rates.