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Home Health / PDN Changes

Update on TennCare's progress to modify Home Health and Private Duty Nursing benefit

In late 2006 and early 2007, Tennessee made rule clarifications around the home health and private duty nursing benefit to assist TennCare's managed care health plans in being able to better manage the benefit and address the growth being experienced.

Tennessee's home health and private duty nursing coverage, utilization and expenditures are outliers when compared to other state Medicaid programs. Tennessee has no coverage limitations on these benefits while most other states have limits on the home health benefit and many do not offer private duty nursing services to people over age 21 at all. Adult private duty nursing is an optional Medicaid benefit.

In December 2007, TennCare discussed during a public budget hearing the unsustainable growth the program was experiencing with respect to this isolated set of services - home health and private duty nursing. Slides 6 through 10 (pdf, 122kb) demonstrate TennCare's unsustainable growth and the lack of limits around this benefit compared to surrounding states.

The fact that home health and private duty nursing costs were growing at an unsustainable rate prompted TennCare to propose a restructuring of the benefit. More detailed information about the expenditures and utilization of home health and private duty nursing in the TennCare program can be found in the state's most recent independent actuarial report.

In February 2008 Tennessee requested that CMS allow TennCare to place reasonable limits on the home health and private duty nursing benefits. TennCare's original proposal involved a cost ceiling for adults utilizing home heath and private duty nursing that would not exceed the cost of nursing facility care. After working with our federal partners, TennCare modified its request to more closely resemble the benefit structure used by other states, establishing weekly limitations on home health services and limiting the private duty nursing benefit to technology dependent adults. These limits do not affect children under age 21.

CMS approved TennCare's request in August 2008. The limits are effective Sept. 8, 2008.

While awaiting federal approval of benefit limits, TennCare trained its health plans on how to use the "least costly alternative" component of the state's statutory definition of medical necessity to curb the growth of home health and private duty nursing.

TennCare has been in discussion with both of the plans in the middle region for the last couple of months as part of the normal annual process the state uses to update rates for the upcoming contract period and where by the state makes additional programmatic modifications. Typically the state amends the health plans' contracts at least twice a year for such reasons, but at a minimum of once a year.

TennCare's discussion with both of the at-risk plans in the middle region, Amerigroup and AmeriChoice, have included the experience around HH/PDN in their first year of operation in the middle region, as well as the annual rate renewal for the coming contract period. The state's independent actuary considered the plans' actual experience when calculating the rate renewal. New rates would be set for July 2008 based on health plan experience taking into consideration any changes to TennCare's benefit structure.

The rate of growth we have experienced in home health and private duty nursing has been most pronounced in the middle region of the state.

It is important to note that home health and private duty nursing services are different than what is typically referred to as home and community based services (HCBS). The first are more medical and "hands on" in nature while the latter offer a broader range of assistance with activities of daily living. Currently, and in the history of the program, the managed care organizations are not responsible for HCBS and nursing home services but are responsible for home health and private duty nursing services.