Medicaid hospital-at-home waiver drives state adoption amid risks

Florida health systems are waiting for Medicaid hospital-at-home reimbursement to kick in as the state joins a growing group reimbursing for such services, though other states remain cautious about paying for a program with an uncertain future.

Approximately 330 hospitals across 37 states offer at-home acute care services through a waiver the Centers for Medicare and Medicaid Services created during the COVID-19 pandemic for Medicare and fee-for-service Medicaid. The waiver lets hospitals provide acute-level care at home through in-person visits, telehealth and remote patient monitoring at the same reimbursement rate as a hospital stay. But the waiver expires at the end of this year, leaving the program's future in question even as support builds in Congress to extend it. Still, hospitals are lobbying more states to cover the program under Medicaid.

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About a dozen state Medicaid plans reimburse hospitals for acute-care in the home. North Carolina began covering it in November. South Carolina and New Jersey approved coverage of home-based hospital care under their Medicaid programs in January. Florida’s legislature approved Medicaid coverage for hospital-at-home in March and will begin paying for home-based hospital care once it updates its reimbursement procedures. Massachusetts, Texas, Oregon, Arizona, Arkansas, South Dakota, Michigan and Oklahoma also cover home-based hospital care.

New Jersey's Medicaid program is in the process of implementing the state’s hospital-at-home law but has not yet issued payment guidance, according to a spokesperson from the New Jersey Department of Human Services

While New Jersey hospitals negotiate reimbursement rates with the state and manged care organizations, Virtua Health's five hospitals have been ramping up hospital-at-home for Medicaid patients. Nearly 30 patients have gotten in-home hospital care since the state approved the program in January, according to Michael Capriotti, senior vice president of integration and strategic operations. Capriotti said in an email Medicaid coverage has helped the Marlton, New Jersey health system serve younger patients and better address health equity.

“By providing services in the home, we can better understand social determinants that contribute to their health status, such as looking in their refrigerator first-hand to better understand their food security status or getting a better understanding of their housing or interpersonal relationships,” Capriotti said.

Some hospitals credit Medicaid coverage of acute-level care at home for helping them scale up their programs and offer additional services. UMass Memorial Health in Worcester, Massachusetts is among them. Medicaid patients have been eligible for hospital-level care at home since the provider began offering the service under the CMS waiver in November 2020. In January, the hospital launched a postpartum hospital-at-home program for new mothers, including those on Medicaid, following cesarean sections. The program has a high patient satisfaction rate and no hospital readmissions, said Dr. Taki Michaelidis, the program's medical director.

Still, many states are taking a wait-and-see approach to covering home-based hospital care. Concerns over the program's benefits and its potential to increase Medicaid expenditures are reasons states might be hesitant to cover home-based hospital care, said Michael Lutz, senior consultant at healthcare advisory firm Avalere.

“The Medicaid agencies by their very nature, and I think justifiably, are very conservative,” Lutz said. “They are going to want to make sure that this is best for the beneficiary, is cost effective, is not another strain on the budget dollars they have available, and is operationally successful.”

New York decided to scratch a proposal to include Medicaid coverage of hospital-at-home in its 2025 budget. The New York State Department of Health supported hospital-level care in the home and will continue to assess the concept, according to a spokesperson.

The state's decision not to cover home-based acute care was a huge disappointment to Dr. Ania Wajnberg who heads the hospital-at-home program at Mount Sinai Hospital in New York. The provider has offered acute-level care at home to more than 2,000 patients under the CMS waiver since 2020.

“I would love to offer this to everyone, especially patients that are vulnerable and could really use the service in their homes,” Wajnberg said. “The more we can do for everyone, the better it will be for scale, education, buy-in and then, of course, for the patient.”

Hospitals in Illinois have also been lobbying for Medicaid coverage of home-based acute care, but that effort remains “a work in progress,” according to Chris Manson, vice president for government relations at Peoria, Illinois-based OSF Healthcare.

Congress could give states more clarity on the concept this fall when it decides whether the Acute Hospital Care at Home waiver will be extended, made permanent or ended. Momentum is building in Congress for an extension, at a minimum. Bipartisan bills are pending in both the House and Senate to extend the program for at least five years.

But even a five-year extension may not be enough to convince some states to cover home-based hospital care, said Harold Miller, president and CEO of the Center for Healthcare Quality and Payment Reform.

“Most health plans are very cautious about adding new things because the concern is once you add it, it is hard to take it away,” Miller said. “Whenever you are dealing with anything new there is a reluctance to do that.”

Correction: An earlier version of this article incorrectly stated that South Carolina and New Jersey began covering home-based hospital care under their Medicaid programs in January.