Hospital at Home - CMS Expands Payments to Hospitals for Care Provided in Patient Homes - McDermott Will & Emery

Hospital at Home – CMS Expands Payments to Hospitals for Care Provided in Patient Homes


On April 30, 2020, the Centers for Medicare and Medicaid Services (CMS) published an interim final rule (IFR) that made regulatory changes and clarified certain policies in response to the Coronavirus (COVID-19) public health emergency (PHE). The IFR’s changes include increased flexibilities for hospitals to provide and receive Medicare payment for hospital outpatient services to patients in their homes.

In Depth

Throughout the COVID-19 PHE, CMS has made an unprecedented effort to respond quickly and comprehensively to the needs of hospitals tasked with providing critical patient care services in a safe and secure environment. In light of hospital infection control concerns and space use challenges during the COVID-19 PHE, CMS will permit hospitals to treat temporary expansion locations as provider-based departments of the hospital, so long as such treatment is not inconsistent with the state’s emergency preparedness or pandemic plan. When a hospital relocates services from within a hospital location to temporary expansion locations, such temporary expansion locations could include a patient’s home. Under this flexibility, CMS will permit Medicare payment for services furnished to a patient in her home when the hospital considers the home to be a relocated outpatient location of the hospital. For outpatient services furnished in these “hospital-at-home” locations, Medicare coverage includes services furnished in-person, remotely or by telehealth.

Hospital Services in a Temporary Expansion Location


CMS will not require that hospitals enroll hospital-at-home locations as locations of the hospital. No updates are required to a hospital’s CMS 855A/PECOS enrollment record. However, if the “original” location of the service that was relocated to the patient’s home was treated as an “excepted” location for purposes of the Medicare Outpatient Prospective Payment System (OPPS) site-neutral payment rules, the hospital can continue to receive the full OPPS rate for the relocated services if additional materials are submitted to CMS.

Services Provided in Hospital-at-Home Locations

Under the hospital-at-home model, hospitals can receive payment for hospital facility fees associated with certain “hospital therapeutic services” covered under 42 CR 410.27 when furnished by hospital clinical staff, including outpatient therapy, counseling and educational services. These services do not include a separate professional services fee, so the only payment received by the hospital when the services are furnished in the hospital is the facility fee. Therefore, the hospital can continue to bill the facility fee for services furnished in the patient’s home because the patient’s home is treated as a location of the hospital. Such services are subject to general supervision, unless CMS has explicitly required a higher level of supervision.

Further, for those services that CMS has determined do not require in-person performance and would otherwise cover when furnished in the hospital if the patient and hospital staff were not in the same location, CMS will continue to permit the hospital to bill for a facility fee when those services are furnished remotely to a patient in his home by hospital staff. CMS makes clear in the IFR that this payment is not being made under the telehealth benefit or expanded telehealth flexibilities under the PHE. As a result, the hospital payment is not for an “originating site facility fee,” but rather the full hospital facility fee applicable to the service provided (e.g., G0463). The coverage is provided by virtue of the treatment of the patient’s home as a location of the hospital. Hospitals should evaluate each service being provided under the hospital-at-home model to determine whether it can be provided remotely or must be provided in-person. Examples of services that could be provided remotely are behavioral health counseling, certain rehabilitation therapy services and genetic counseling. Examples of services that must be provided in-person are infusion, wound care and drug administration.

Because the payment is being made based on treatment of the patient’s home as a location of the hospital, the OPPS site-neutral rules apply to the location. If the “original” location of the service that was relocated to the patient’s home was subject to the site-neutral payment rules (i.e., payment reduced from the full OPPS rate to the “applicable fee schedule amount”), payment for the service in the patient’s home will continue at the reduced site-neutral rate and should be billed with the “PN” modifier. If, however, the “original” location of the service was an “excepted” location under the site-neutral payment rules (including on-campus locations), the hospital must either accept the lower site-neutral payment rate for services furnished in the patient’s home or submit additional documentation to CMS to preserve the higher OPPS rate.

CMS will continue payment at the higher OPPS rate, which include the COVID-19 PHE. CMS also modified the application process and extended the reporting timeframe for “extraordinary circumstances” relocation requests. Excepted locations that relocate services to a patient’s home (or any other temporary location) on or after March 1, 2020, for the purposes of addressing the COVID-19 PHE must submit documentation to the applicable CMS Regional Office providing notice and supporting details of the relocation within 120 days of beginning to provide services at the relocated site. The submission to the Regional Office must include:

  • The hospital’s CCN
  • The address of the current outpatient department
  • The address of the relocated outpatient department
  • The date the hospital began providing services at the relocated outpatient department
  • A justification for the relocation and the role of the relocation in the hospital’s response to the COVID-19
  • An attestation that the relocation is not inconsistent with the state’s emergency preparedness or pandemic plan.

CMS will not require separate justification for each patient home address, but will require a submission generally related to services provided in patient homes. All other relocations require separate identification of the specific location to which services are relocated, but CMS indicated that these addresses can be combined into a single submission. Services that are relocated under the “extraordinary circumstances” exception can continue billing as “excepted” services with the “PO” modifier without a gap, and do not have to wait for CMS approval of the “extraordinary circumstances” submission.

CMS further clarified that the extraordinary circumstances exception is available only for “relocated” locations, not for “new” locations. All new locations are subject to payment under the reduced site-neutral rates, although CMS also stated that a hospital can partially relocate services, such that the services may continue at the original location, despite some portion of the service being relocated.

Hospital Services Accompanying a Professional Service Furnished via Telehealth

The IFR generally speaks to the hospital-at-home model in the context of hospital services provided remotely. In this regard, the hospital services provided under this model are not “telehealth services.” Because CMS treats the patient’s home as a location of the hospital, the hospital bills for the services of hospital clinical staff using a hospital facility fee, as if the services were furnished in the hospital. However, under the IFR, CMS also clarified that because the hospital-at-home model treats the patient’s home as a location of the hospital, the hospital is eligible for a telehealth “originating site fee” when a hospital-based practitioner who can separately bill for professional services furnishes services via telehealth to a patient receiving hospital services at home under the hospital-at-home model. Previously, only the professional claim could be submitted for telehealth services provided to a patient located at home. This change, which applies to services performed on or after March 1, 2020, puts hospitals on more equal footing with clinics and physician practices with respect to reimbursement for telehealth services.

Additional Considerations

The hospital-at-home model provides significant flexibilities to hospitals responding to COVID-19 concerns related to infection control and hospital space use, and provides opportunities to recoup some lost revenue that might occur if a patient cannot receive services in the hospital. Although the IFR introduces significant opportunities, hospitals also must maintain awareness of the limitations surrounding the hospital-at-home model. For instance, CMS still requires that the hospital’s relocation be consistent with its state’s emergency preparedness or pandemic plan. Hospitals should maintain communication with their state departments of health to ensure that any action taken aligns with the state response to the COVID-19 PHE and any other applicable state laws or regulations.

The model proposed by CMS in the IFR only applies to Medicare beneficiaries. Other payors may not, and are under no federal obligation to, follow Medicare’s lead.

Finally, hospitals using the hospital-at-home model should ensure that the model is appropriate for each individual patient given the service provided and the specific home environment, and should consider the potential additional liability and insurance risks posed by furnishing services as hospital services to the patient in her home.