Planning for Home Health Care: The Medicare Benefit Explained

No matter how old you are, you’re still a rookie.

Think about it.

Even if you are 85 years of age, you are 85 years old for the first time. “Old age”, therefore, does not lessen the shock, surprise, or dismay we feel when suddenly we can no longer care for ourselves. In fact, the longer we live the harder this adjustment becomes. After all, living vigorously, independently, and positively enables long life.

As difficult as it may be to adjust to lost abilities, we’re usually even less interested in anticipating them. “Carpe diem!” (Seize the day!), is the healthy motto we live by. And besides, there’s Social Security and Medicare if we ever need a little help arranging the blanket or moving the rocking chair. Right?


The truth is that with the exception of the care subsidized by certain Home Care and/or Medicaid Waiver programs (State/Federal health care programs for the poor and/or special populations) most Americans who need help in their homes with ongoing personal care receive it from family, friends and neighbors. The rest is paid for out-of-pocket to home care agencies or private duty caregivers.

Two factors contribute greatly to the loss of homecare options and the high rate of hospitalization and nursing home placement among the elderly and disabled. They are 1) Public confusion over what Medicare provides, and 2) Our aversion to anticipating and planning for personal care dependency.

Those with Medicare as their primary insurance cannot rely on the home health care benefit to do more than help them regain medical stability after an illness or injury. Medicare does not subsidize prevention of illness. While it does now pay for diagnostic testing to assess need for medical treatments; it does so for only a few medical diagnoses. Medicare does not pay for health maintenance or custodial care services provided in a home care setting other than during short-term, intermittent bouts of illness, no matter how much they may be needed!

Long-term care consumers should know their benefits under the Medicare home health care program. Medicare pays for home care when:

  • The services of a Registered Nurse (RN), a Physical Therapist (PT), an Occupational Therapist (OT), or a Speech Therapist (ST) are medically necessary for recovery from an illness or injury.
  • A physician orders these skilled services.
  • The patient is “homebound” in the sense that their illness or impairment significantly restricts their mobility. (The operational interpretation of “homebound” differs between various regional Medicare intermediaries.)

Aside from the services of the above-cited skilled professionals, Medicare home care patients can receive personal care assistance from a home health aide as well as supportive counseling, long-term care planning and linkage to community resources from a medical social worker. Home health aide assistance and medical social work are not “stand alone” services under the home health care benefit. “Skilled” services (RN, PT, OT, ST) must be both medically necessary and currently provided if aides and social workers are to provide services billable to Medicare. Once the patient has recovered from the MD-diagnosed illness or injury and, in the opinion of the home care agency, skilled services are no longer justified, all services are discharged. Further, there are limits to the number of hours of care patients can receive in a week. So, in a nutshell-nurses and therapists treat the illness, aides provide scheduled personal care (dressing, bathing, ambulating, etc.) for brief increments of time, and medical social workers provide counseling and planning help so long as social or emotional problems impede recovery from the primary diagnosis. Recipients of home health care services under Medicare, most of whom are chronically ill and elderly, are helped back to a baseline of wellness. They are then left to their own devices.

Whereas the services that helped them recover may be continuously needed to prevent a relapse; Medicare does not pay for them after recovery has been achieved. This is so despite the probability that relapses will occur (chronic conditions aren’t cured, they’re managed) and that subsequent hospital and rehabilitative treatment will likely cost more than preventive measures ever would have.

For years the terms “homebound”, “short-term”, “intermittent”, and “medically necessary” have been liberally interpreted by home health care agencies. Under a fee-for-service reimbursement system, the home care industry grew throughout the country. Recently home health care has been tarred with a reputation for fraud. While many of the accusations may be unfounded, those that weren’t drew the attention of the Health Care Finance Administration (HCFA). The entire home care industry came under scrutiny in an effort to reduce actual fraud and to save some Medicare dollars in the process. Increased oversight, combined with the imposition of reimbursement limits (known as “capitation”), has forced home health care and visiting nurse agencies nationwide to trim the amount of care they provide under the Medicare home care benefit.

These changes are having both intended and unintended consequences. The government’s goal to reduce both Medicare fraud and Medicare cost will likely be realized. But what of the unintended consequences? Consider this − in the mid-1970s there were more people over the age of 85 in nursing homes than there are today, despite the fact that as a percentage of the population, they were half as numerous! It is reasonable to assume that for years the Medicare home health care benefit has been diverting many of our “oldest elders” from nursing home placement. Our legislators’ decision to bring costs into balance with revenues by ratcheting down the home health care benefit may have the effect of shifting more long-term care costs to the states in the form of increased nursing home admissions.

But states are also looking for ways to cut Medicaid expenses. They have no choice. They are constitutionally prohibited from deficit funding.

Long-term care funding systems are strained by tension between increased demand on the one hand, and budget control imperatives on the other. As time passes and the Medicare trust fund continues to shrink, along with the number of taxpayers relative to those in need of support, we will face an unprecedented caregiving challenge. Long-term care consumers will need to develop an entirely different mind-set if they are to maintain their independence. Those interested in remaining in the community, whether in their own homes, in the home of a relative, or in community housing, must eventually rely on themselves. Care planning for anticipated physical and cognitive decline has become more important than ever before.

Planning is no less important to the maintenance of our health as we age than it is to the success of most human endeavor. When chronic ill health or functional decline restricts our freedom, care planning can make all the difference between remaining at home and nursing home placement. Whereas hospitalization and/or nursing home placement may not always be avoidable, most health care professionals concur that many of the illnesses and injuries (and subsequent institutional admissions) associated with chronic conditions can be prevented.

In the care planning effort, financial resources are often the least critical component in an abundance of self-care management strategies. Each person’s unique brand of individual resourcefulness itself may be the most valuable resource of all.

In future articles I will highlight care-planning strategies that have proven successful for many home health care clients enabling expanded home care and community lifecare opportunities.

Copyright 2001 Joseph A. Jackson. All rights reserved