Optional Medicaid Benefits

States may also receive Federal funding if they elect to provide other optional services. The most commonly covered optional services under the Medicaid program include:
  • clinic services;
  • nursing facility services for the under age 21;
  • intermediate care facility/mentally retarded services;
  • optometrist services and eyeglasses;
  • prescribed drugs;
  • TB-related services for TB infected persons;
  • prosthetic devices; and
  • dental services.

Personal Care Services

Personal care services are an optional Medicaid benefit provided to individuals who are not inpatients or residents of a hospital, nursing facility, intermediate care facility for the mentally retarded, or institution for mental disease. Personal care services must be:

  1. authorized for an individual by a physician in accordance with a plan of treatment or (at the State's option) otherwise authorized for the individual in accordance with a service plan approved by the State;
  2. provided by a qualified individual who is not a member of the individual's family; and
  3. furnished in a home or other location.

Personal care services may include a range of human assistance provided to persons with disabilities and chronic conditions of all ages which enables them to accomplish tasks that they would normally do for themselves if they did not have a disability. Assistance may be in the form of hands-on assistance or cueing so that the person performs the task by him/herself. Such assistance most often relates to performance of activities of daily living (ADLs) and instrumental activities of daily living (IADLs), which includes assistance with daily activities such as eating, bathing, dressing, toileting, transferring, personal hygiene, light housework, medication management, etc. Personal care services can be provided on a continuing basis or on episodic occasions. Skilled services that may be performed only by a health professional are not considered personal care services.

Hospice Services


The hospice service benefit is an optional benefit which States may choose to make available under the Medicaid program. The purpose of the hospice benefit is to provide for the palliation or management of the terminal illness and related conditions. Under Federal guidelines, the hospice benefit is available to individuals who have been certified by a physician to be terminally ill. An individual is considered to be terminally ill if he/she has a medical prognosis that his or her life expectancy is 6 months or less. Individuals who meet these requirements can elect the Medicaid hospice benefit.

In order to receive payment under Medicaid, a hospice must meet the Medicare conditions of participation applicable to hospices and have a valid provider agreement. The provision of care is generally in the home to avoid an institutional setting and to improve the individual's quality of life until he or she dies. However, individuals eligible for Medicaid may reside in a nursing facility (NF) and receive hospice care in that setting.

In order to be covered, a plan of care must be established before services are provided. The following are covered hospice services: nursing care; medical social services; physicians' services; counseling services; home health aide; medical appliances and supplies, including drugs and biologicals; and physical and occupational therapy. In general, the services must be related to the palliation or management of the patient's terminal illness, symptom control, or to enable the individual to maintain activities of daily living and basic functional skills.

Additionally, there are other services that may be provided under the hospice benefit, subject to special coverage requirements. Continuous home care may be provided in a period of crisis. This consists of primarily nursing care to achieve palliation or management of acute medical symptoms. A minimum of 8 hours of care must be provided during a 24-hour day.

Also, short-term, inpatient care is covered, as long as it is provided in a participating hospice unit or a participating hospital, or NF that additionally meets hospice standards. Services provided in an inpatient setting must conform to the written plan of care. General inpatient care may be required for procedures necessary for pain control or acute or chronic symptom management, which cannot be provided in other settings. Respite care is short-term, inpatient care provided to the individual only when necessary to relieve the family members or other persons caring for the individual at home. It may only be provided on an occasional basis and may not be reimbursed for more than 5 days at a time. Respite care may not be provided when the hospice patient is a nursing home resident.

The Omnibus Budget Reconciliation Act of 1990 (OBRA 90) modified the Medicaid statute relating to hospice services. Prior to OBRA 90, when a Medicaid eligible individual elected the Medicaid hospice benefit, he or she waived the right to Medicaid payment for services other than those described earlier. As modified, the law would allow an individual to receive payment for Medicaid services related to the treatment of the terminal condition and other medical services that would be equivalent to or duplicative of hospice care, so long as the services would not be covered under the Medicare hospice program. This means that Medicaid can cover certain services which Medicare does not cover.


Medicaid reimbursement for hospice care will be made at one of four predetermined rates for each day in which an individual is under the care of the hospice. The four rates are prospective rates; there are no retroactive adjustments, other than an optional application of a "cap" on overall payments and the limitation on payments for inpatient care, if applicable. The rate paid for any particular day would vary, depending on the level of care furnished to the individual. The four levels of care are classified as routine home care, continuous home care, inpatient respite care, or general inpatient care. Payment rates are adjusted for regional differences in wages.

Payments to a hospice for inpatient care must be limited according to the number of days of inpatient care furnished under Medicaid. During the 12-month period beginning November 1 of each year and ending October 31, the aggregate number of inpatient days (both for general inpatient care and inpatient respite care) may not exceed 20 percent of the aggregate total number of days of hospice care provided to all Medicaid recipients during that period. The State may exclude recipients with AIDS in making this calculation. Any excess reimbursement must be refunded by the hospice. Additionally, if a Medicaid hospice patient resides in a NF, the State must pay an amount equal to at least 95 percent of the NF rate to the hospice to pay for the room and board services provided by the NF. 

Rehabilitation Services

Rehabilitation services are an optional Medicaid benefit that must be recommended by a physician or other licensed practitioner of the healing arts, within the scope of practice under State law, for the maximum reduction of a physical or mental disability and to restore the individual to the best possible functional level. The services may be provided in any setting and generally include mental health services such as individual and group therapies and psychosocial services. In addition, States also provide services aimed at improving physical functional abilities, including physical, occupational and speech therapies. 

Physical Therapy, Occupational Therapy, and Services for Individuals with Speech, Hearing and Language Disorders

All of these services are optional Medicaid services States may choose to provide. Physical therapy services are prescribed by a physician or other licensed practitioner of the healing arts within the scope of his or her practice under State law and provided to a recipient by or under the direction of a qualified physical therapist. Included are any necessary supplies and equipment.

Occupational therapy services are prescribed by a physician or other licensed practitioner of the healing arts within the scope of his or her practice under State law and provided to a recipient by or under the direction of a qualified occupational therapist. Included are any necessary supplies and equipment.

Services for individuals with speech, hearing, and language disorders means diagnostic, screening, preventive, or corrective services provided by or under the direction of a speech pathologist or audiologist, for which a patient is referred by a physician or other licensed practitioner of the healing arts within the scope of his or her practice under State law. Included are any necessary supplies and equipment.

Qualifications for providers of physical therapy, occupational therapy and services for individuals with speech, hearing, and language disorders,are specified in Federal regulations at 42 CFR 440.110(c). 

Targeted Case Management Services

States may provide optional targeted case management services to recipients under its Medicaid State plan. The statute defines targeted case management services as "services which assist an individual eligible under the plan in gaining access to needed medical, social, educational and other services." This section enables States to reach out beyond the bounds of the Medicaid program to coordinate a broad range of activities and services necessary to the optimal functioning of a Medicaid client. States desiring to provide these case management services may do so by amending their State plans. Given the targeted nature of the program, States must submit a separate plan amendment for each target group.

Home Health Services

Home health services are a mandatory benefit for individuals who are entitled to nursing facility services under the State's Medicaid plan. Services must be provided at a recipient's place of residence, and must be ordered by a physician as part of a plan of care that the physician reviews every sixty days. Home health services must include nursing services, as defined in the State's Nurse Practice Act, that are provided on a part-time or intermittent basis by a home health agency, home health aide services provided by a home health agency, and medical supplies, equipment, and appliances suitable for use in the home. Physical therapy, occupational therapy, speech pathology, and audiology services are optional services that States may choose to provide.

To participate in the Medicaid program, a home health agency must meet the conditions of participation for Medicare.

Source: Health Care Financing Administration

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