Improving Coordination of Home Health Services and Durable Medical Equipment for Medicare-Medicaid Enrollees in the Financial Alignment Initiative

Both Medicare and Medicaid cover home health services and durable medical equipment (DME) for Medicare-Medicaid enrollees (“dual eligible individuals”), but which program covers which service, when, and under what circumstances is governed by a variety of rules in the two programs that have developed over time—and largely separately—in the fee-for-service (FFS) system. This overlapping coverage can lead to confusion, uncertainty, and frustration for Medicare-Medicaid enrollees, service providers, and payers. The Centers for Medicare & Medicaid Services (CMS) Financial Alignment Initiative capitated model gives managed care plans an opportunity to provide home health services and DME to Medicare-Medicaid enrollees in a more unified, coordinated, simplified, and cost-effective way. This technical assistance brief outlines some of the problems with the current system and some options for alleviating or removing them in the Financial Alignment Initiative and other initiatives that combine coverage for Medicare and Medicaid services under one accountable entity.