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October 6, 2008

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Medicare Adult Day Legislation

Medicare Demonstration Project Update

After years of effort, spearheaded by NADSA, Medicare payment for Adult Day Services is closer to reality. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 was passed by both the United States House of Representatives and the Senate and is supported by the President. As part of this Act, a "Demonstration Project for Medical Adult Day-Care Services" was established by the Secretary of the US Department of Health & Human Services (Secretary). This demonstration project permits a home health agency, directly or under arrangement with a medical adult day facility to provide medical adult day services as a substitute for home health services that would otherwise be provided in a beneficiary's home. Only Medicare beneficiaries that have home health services prescribed by a physician are eligible for this substitution of services. Payment for these adult day services will be equal to 95% of the amount that would be paid for services provided in the home.

The ADS demonstration project will provide Centers for Medicare and Medicaid (CMS) with the data needed to evaluate the efficacy and cost effectiveness of adult day services as a substitute option for home health care services. The demonstration project will last three years, with an evaluation completed no later than six months after the end of the three years. Medicare beneficiary participation will be voluntary and will be conducted in no more than five sites in states selected by the Secretary, that license or certify adult day services providers. To make the data collection more manageable, the total number of participants may not exceed 15,000 at any one time. The Secretary may waive Home Health Conditions of Participation as he deems appropriate. The outcome of the data derived from the demonstration project will result in recommendations regarding the extension, expansion, or termination of Medicare coverage for adult day services.

Since the time of the passage of the Medicare Modernization Act of 2003 (MMA), NADSA has been working closely with the Research and Demonstration Division of CMS. Below are the highlights of the information that has been shared thus far:
  • CMS selected five sites nationwide. However, the word "site" means "home health agency," not "adult day services provider."
  • Each site has contractual arrangements with multiple adult day services providers.
  • In order to be eligible for the demonstration, a Medicare beneficiary must be a current recipient of home health services and be enrolled in an adult day program.


Demonstration Project Timeline

Spring 2005 National RFP notification will become public through the Federal Register with an appropriate proposal deadline
Summer/Fall 2005 Proposals will be reviewed by the application review panel and submitted to the CMS Administrator for final selection
Late 2005 Demonstration project will begin
Late 2008 Demonstration project will end
July 1, 2009 Final report due to Congress


The full text of the legislation is available at:
http://waysandmeans.house.gov/Special.asp?section=43. Click on: "Legislative Text of the Medicare Conference Agreement". Go to: Section 703, pp 443-446, "Demonstration Project For Medical Adult Day-Care Services".

Medical Adult Day Care Services Demonstration Update February 2008 Adobe PDF
National Adult Day Services Association, Inc., 85 South Washington, Suite 316, Seattle WA 98104
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