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Comments Needed on Rehabilitative Services Proposed Rule
August 27, 2008

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule on Medicaid (MA) rehabilitative services in the August 13 Federal Register. If approved, this rule would have a significant impact on services that can be provided and billed to MA. CMS wants to ensure that physical health, mental health, substance use, and other services are appropriately rehabilitative in nature in order to be paid and that services that should be paid by entities other than MA are covered by juvenile justice, children and youth, education, or other applicable systems. Habilitation services for persons with mental retardation or other related conditions provided under clinic services or rehabilitative services provisions of section 1905(a) of the Social Security Act are to transition to other MA vehicles, such as a 1915(c) Home and Community-Based Services waiver.

Requirements of the proposed rule include:

  • Definitions of qualified provider, “under the direction of,” written rehabilitation plan, restorative services, medical services, and remedial services;
  • Rehabilitation plan containing recovery goals;
  • Rehabilitation services address physical needs, mental health needs, and substance-related disorder treatment needs;
  • Rehabilitative services may be provided in a variety of settings, but are not inpatient services;
  • Rehabilitative services must meet statewideness, comparability, and freedom of choice of qualified providers requirements found in §1902 of the Social Security Act;
  • Coverage of rehabilitative services would not include services provided through a non-medical program as a benefit or administrative function, foster care, child welfare, education, child care, vocational and prevocational training, housing, parole and probation, juvenile justice, or public guardianship;
  • Exclusion of Federal Financial Participation (FFP) for habilitation services, including those for persons with mental retardation or related conditions;
  • Exclusion of recreational and social activities that are not related to a specific rehabilitative goal;
  • Exclusion of rehabilitation services for persons who are the responsibility of law enforcement and living in a public institution;
  • Exclusion of FFP for services provided to residents of institutions for mental disease, including community residential treatment facilities of more than 16 beds;
  • Exclusion of room and board expenditures; and
  • Exclusion of payment for services for persons who are not Medicaid eligible.

Comments are needed on the proposed rule. PCPA will prepare comments for submission to CMS by the October 12 deadline at 5:00 p.m. PCPA requests member input in crafting comments, particularly that of Mental Health, Drug and Alcohol, Mental Retardation, and Children’s Committee members. PCPA would also appreciate a copy of any comments submitted to CMS by member agencies. The complete language of the proposed rule is available. Please contact Betty Simmonds with questions or to provide input for PCPA comments by September 20.

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