Home Healthcare Coverage Guide

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Chapter 1

Introduction

Home care, also referred to as domiciliary care, social care, or in-home care, is supportive care provided in a person’s home. The care may be provided by licensed healthcare professionals or by professional caregivers. In-home medical care is more accurately termed home healthcare (HHC), to distinguish this care from nonmedical, custodial care or private-duty care, which refers to assistance and services provided by nonmedical personnel not requiring a license. Home healthcare may also extend to hospice care, for terminally ill patients.

Brief History of Home Healthcare

Home healthcare can trace its roots back to the early Nineteenth century. Research reveals that women in Nashua, NH became concerned with the health and welfare of their community’s poor and disadvantaged and in 1883 founded the Good Cheer Society, still in existence today. These early workers visited sick mill workers and their children, and in 1902, the Society hired its first nurse. (The History of Home Health and Hospice Care, 2018).

Thus, basic home care began in various parts of the U.S. when qualified nurses visited the homes of the poor and sick. The most basic duties included helping new mothers and treating patients inflicted with infectious diseases. Over time, the need for nurses who could provide professional medical help at home increased. Charitable institutions then began to sponsor these visiting nurses and in 1909, 1,413 licensed nurses worked for more than 500 organizations supporting the poor and the sick. In the same year, an insurance provider, Metropolitan Life Insurance Company, decided to offer the services of visiting nurses to their policyholders, and this gave birth to the world’s first organized home healthcare system. Soon after, the Red Cross starting a visiting nurse program for people in rural areas, which quickly spread through local chapters across the U.S. (Home Healthcare.net, 2018).

In 1965, Medicare was ratified to grant benefits to home care patients, and Medicaid followed, giving the poor provisions for HHC. In 1982, the National Home Care Association (NAHC) was established. The NAHC is a nonprofit professional organization representing the interests of the chronically ill, disabled and dying Americans of all ages, and the caregivers who provide them with in-home health and hospice services.

The term ‘home healthcare’ has been interchanged with ‘home health’, but more recently the two terms have been more accurately separated. Home healthcare is skilled nursing care provided by licensed caregivers, while home care refers to informal nonmedical care, given by nonlicensed persons. Home healthcare personnel can include registered nurses, therapists, homecare aides and companions/homemakers.

Today, home healthcare services in the U.S. are an integral part of the country’s healthcare system. The HHC industry comprises a variety of agencies and associations offering a wide range of services comprised of home health agencies, home care aid institutions, and hospice care.

Types of Home Healthcare Services

Home healthcare nurses provide a myriad of professional services and life assistance services, with the primary purpose being that patients be able to stay at home while receiving professional medical attention.

Any licensed healthcare provider, including but not limited to, nurses, therapists, caregivers or doctors, can provide home healthcare services. The types of services provided generally include the following:

•    Regular medical evaluation

•    Nursing

•    Pain Management

•    Personal hygiene, grooming, wound care, and other medically prescribed assistance

•    Disease education

•    Hospice care

•    Physical, speech or occupational therapy

•    Life assistance services, such as any of the six activities of daily living: eating, dressing, transferring, bathing, using the toilet, walking

Professional and licensed healthcare providers also help their patients live independently, and be able to function sufficiently to return to their respective communities by assisting them in the following activities:

•    Meal preparation

•    Taking medications

•    Housework

•    Shopping for food, groceries, clothes and other household items

•    Using public services such as telephones

•    Managing money

The overwhelming majority of persons availing themselves of HHC services are aged sixty-five or older, with the most common medical conditions being diabetes and cardio-vascular related illnesses. The remaining persons using by HHC generally need assistance for rehabilitation, are disabled, or have more than one chronic medical condition requiring care.

In the U.S. and elsewhere, the family is the most important care provider for the elderly and it is no surprise that the majority of primary home care providers in the U.S. are the patient’s family members. With the majority of today’s families depending on two wage earners, this caregiving causes great wage loss and leads most family caregivers to seek out professional HHC services. A physician’s approval is required to attain the services of a professional caregiver. The physician must declare and certify the need for a professional caregiver, but once approved the family can select from a wide number of agencies and companies offering the service. Physicians may recommend a provider as well, making it easier for the family to get care started.

Options in Home Healthcare

There are several options available to the family seeking a professional home healthcare service. HHC services may include all activities needed to satisfy the special requirements of the elderly such as assistance with activities of daily living, therapies (physical, speech, occupational), professional nursing care, counseling, social services and a wide array of supportive personal care.

Home healthcare helps senior citizens live independently despite the limitations of their age or condition. It may also include training the elderly to adjust to and overcome the physical and psychological limitations that accompany aging. HHC services can often delay or even eliminate the need to move the patient into a long-term nursing care facility.

Among the available options for the elderly, many adult daycare facilities offer HHC programs for patients needing medical care and companionship that requires more assistance and strict supervision throughout the day. An adult day care facility is not home healthcare; however home healthcare may be a separate program offered by an adult daycare facility. These HHC programs provide for the patient’s safety and care, granting family members the freedom to work and perform their daily activities.

In-home respite care is a HHC service that involves various services given to more impaired patients. Some of these services include:

Companion services – as labeled, this service is a nonmedical (social) service that helps the caregiver supervise, entertain, or counsel the elderly person.

Homemaking services – this service assists the patient with housekeeping, meal preparation, or shopping for food and medicines.

Personal care services – this service can provide a wide range of care, but generally assists the patient in getting around their home or in turning and positioning in their bed, bathing, grooming, dressing/undressing, personal hygiene and toileting. They may also provide assistance with medications per family member direction, apply and maintain prosthetics and orthotics, and may accompany the patient to medical appointments.

Skilled care services – these services in general assist the primary caregiver by providing care for services ordered by a physician to treat a condition, illness, disease or injury. These services must be provided by a registered nurse or licensed practical (vocational) nurse.

In the U.S., medical (skilled nursing) care and nonmedical (social) care are distinguished from each other as insurance and public medical funding strictly limits coverage to medical care. As such, more than one million Americans in assisted living facilities pay for healthcare using personal funds. Others seek financial assistance from family, friends or state agencies. Medicare does not include home care expenses unless there is a need for skilled nursing care, or the service is rendered inside nursing facilities. However, Medicare will cover some professional home healthcare when the person meets the requirements set by the Medicare home care health benefits.

While professional caregivers can be hired through various agencies, the costs are significant. Private caregivers may be less costly, but pose additional risks. For example, direct-hired caregivers are paid an hourly rate of between $8-$15, depending on the patient’s location, the number of hours of service rendered, and the caregiver’s healthcare experience. If the healthcare provider is hired through an agency, the hourly rates are 40 percent-70 percent higher.

In-home healthcare providers who reside with the patient are paid between $120 and $200 per day. Registered nurses providing HHC are paid $22 to $30 per visit, but some may charge as much as $45 to $55 and are entitled to receive $0.52 to $.58 per mile, tax-free.

Despite these costs, the overall cost of HHC is lower than that of inpatient facilities, according to the Centers for Medicare and Medicaid Services.

Home Healthcare Growth

From the period 2002-2015, home healthcare agencies increased by 11.8 percent from 11,819 agencies in 2002 to 13,214 in 2015. According to a study released in October 2017 by the U.S. Bureau of Labor Statistics (BLS), the compound annual growth rate for home healthcare services from 2016-2026 would be 3.1 percent, added to an actual increase of 4.4 percent for the period 2006-2016, projecting it as one of the fastest growing of all industries. (The only industries projecting similar or higher growth by the BLS are in the data processing and information services, software publishing, mining [except oil and gas], and telecommunications industries.)

By 2020, the BLS projects that approximately 1.3 million additional jobs within the homecare field will be added, with a projected 69 percent increase for those working in home health positions, and a 70 percent increase for those working in personal care aide positions.

According to the Centers for Disease Control and Prevention, as of 2014 there were 12,400 home health agencies, serving 4.9 million patients in 2013.

The U.S. Bureau of Labor Statistics projects HHC employment to grow 40 percent from 2016 to 2026, which presents a huge opportunity for insurers.

Chapter 2

ISO Home Healthcare Program

According to a publication from the National Research Council, the United States is seeing a major demographic shift, as people are generally living longer. Projections are that by 2050, the sixty-five and older age group will be 83.7 million, double the estimated 43.1 million reported in 2012. In response to the reported trend in the longevity of the elder population, ISO has introduced an ISO Home Healthcare Program specifically tailored to insure home healthcare businesses.

The Home Healthcare Coverage Part combines certain features of the ISO General Liability Coverage Form and certain features of select ISO Medical Professional Liability Coverage Forms under a single coverage form for home healthcare businesses:

•    Coverage A – General Liability – is designed to address liability coverage with respect to bodily injury, property damage, personal and advertising injury, and medical expenses, similar to that addressed under the ISO Commercial General Liability Coverage Form (CGL). Unlike the ISO CGL, coverage for personal and advertising injury liability is included within Coverage A and does not have a separate insuring agreement. In addition, the limit of insurance for personal and advertising injury liability is included within the General Liability Each Occurrence Limit.

•    Coverage B – Professional Liability – is designed to address liability coverage with respect to a wrongful act, similar to a medical incident addressed under the ISO Hospital Professional Liability Coverage Form and the Allied Healthcare Providers Professional Liability Coverage Form.

The sections of the Home Healthcare Liability Coverage Form HH 00 01 are formatted similar to the CGL:

•    Section I – Coverages (contains the Insuring Agreements for Coverage A – General Liability (GL), Coverage B – Professional Liability (PL) and Supplementary Payments that will not reduce the limits of insurance)

•    Section II – Exclusions (contains exclusions applicable to Coverage A, Coverage B, and those applicable to both Coverages A and B)

•    Section III – Who Is An Insured

•    Section IV – Limits of Insurance (provides occurrence based limit with respect to Coverage A and Coverage B, with medical expenses subject to the General Policy Aggregate Limit)

•    Section V – Conditions (similar to certain comparable conditions in the CGL and MPL Coverage Parts)

•    Section VI – Definitions (similar to certain comparable conditions in the CGL and MPL Coverage Parts)

Section I – Coverages

Coverage A—Insuring Agreement—General Liability

Coverage A addresses liability coverage with respect to bodily injury, property damage, personal and advertising injury and medical expenses, similar to that under the ISO Commercial General Liability (CGL) Coverage Form. However, unlike the ISO CGL, the ISO HH 00 01 provides this coverage under a single GL insuring agreement.

Paragraph A.1. General Liability

Under Coverage A, Paragraph A.1. the general liability insuring agreement, the insurer agrees to pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury, property damage or personal and advertising injury to which the insurance applies. The bodily injury or property damage must be caused by an occurrence that takes place in the coverage territory, and the form adds several provisions that describe when bodily injury or property damage will be deemed to have occurred relevant to the coverage. Personal and advertising injury must be caused by an offense arising out of the Named Insured’s business, but only if the offense was committed in the coverage territory, during the policy period.

The bodily injury, property damage and personal and advertising injury must arise from the premises/operations in conjunction with the insured’s home healthcare business; and bodily injury and property damage that applies to products/completed operations coverage must arise in conjunction with the insured’s business.

Each of the italicized terms is discussed in more detail later in this chapter.

Meaning of Legally Obligated

While some liability policies are only activated when the legal obligation to pay is determined by a court, such is not the case with the HH forms (as per the standard CGL). Yet, there are differences of opinion. In insurance custom and practice, the phraseology legally obligated to pay does not mean that adjudication can only be resolved by a court. Since most lawsuits do not go to trial, but are instead settled, the determination of whether the insured is obligated to pay is not made by the courts, but by the insurance company itself. In fact, many insurers would prefer not to get involved in litigation because the cost of defense often can far exceed the cost of indemnity. On the other hand, there are cases, such as Bacon v. American Insurance Co., 330 A.2d 389, (1974) where it was held that the policy term legally obligated to pay required the presentation of proofs in a court of competent jurisdiction and a finding by the court or jury of liability. The answer, therefore, is not definitive.

The expression legally obligated connotes legal responsibility that is broad in scope. It is directed at civil liability, rather than criminal liability, the latter being against public policy to insure. Civil liability can arise from either unintentional (negligent) or intentional tort, under common law, statute, or contract. Civil liability is the term used when a person commits a tort (personal injury), and must face the consequences, usually in the form of compensation to the injured person. Negligence torts are the most common type of civil liability. Negligence might occur if a person fails to take precautions and as a result, another person is injured. Negligence torts can include criminal and civil acts. Criminal negligence occurs when a law is broken through a negligent act, and as a result, a person is injured. For example, a home healthcare worker intentionally overmedicates a patient so they will not have to care for them, and the patient becomes ill due to the overdose. Because the overmedication is a criminal act, there would be no insurance coverage for this intentional tort.

Civil negligence occurs when a person does not exercise due diligence in their responsibilities, and as a result a person is harmed or injured. An example of civil negligence would be if a home healthcare worker failed to discard an injection syringe and a child found it and used it on another person.

In addition, legal liability is imposed in situations where there is strict liability. Strict liability occurs if a person puts another person in danger, even in the absence of negligence, simply because he is in possession of a dangerous product, animal or weapon. To prove strict liability, there does not have to be negligence or an intent to harm. An employer-employee relationship imparts strict liability on the