How Nebraska Medicaid Pays for Adult Day Health: The AD Waiver's New Six-Hour Day, an $81.22 Rate, and a 150 Percent Cost Cap

Nebraska licenses twenty adult day services, and the Medicaid benefit that pays them changed on July 1, 2026. The renewed Aged and Disabled Waiver raised the threshold for a billable day from four hours to six, added an hourly unit, published the first statewide maximum rate for adult day health — $81.22 a day, $13.53 an hour — and put a 150 percent cost cap on each participant’s total waiver spending. Eight weeks later the State Auditor released a report on the whole waiver that reads like a checklist of what Medicaid reviewers look for. Here is how the benefit works now for a licensed Nebraska adult day service.

ElderSuite serves adult day care centers nationwide. This piece is Nebraska-specific — Adult Day Health Services under the AD Waiver for adults 18 and older, not day services under the developmental disabilities waivers.

One waiver, one service

The AD Waiver, NE.0187.R08.00, was approved by CMS on June 17, 2026 for five years beginning July 1, 2026. Its day service is Adult Day Health Services, and the only provider type is a “Licensed Adult Day Service Agency” — licensed under 175 NAC 5. The approved waiver defines the service as “structured social and health activities outside of the participant’s home to support health, safety, and community engagement,” and lists what it contains: hands-on assistance or cuing with activities of daily living; health assessment and health-related activities, including non-complex nursing interventions for stable conditions; meals when the plan calls for them, though not three a day; and recreational therapy and structured activities. The provider must work with the participant’s person-centered planning team to develop an Adult Day Health Service Plan.

What it does not contain matters as much. Transportation is a separate waiver service. Physical, occupational, and speech therapy are not included. And adult day health cannot be authorized at times that overlap with personal care, companion, respite, independence skills building, transportation, supported residential living, or a relative’s personal care — nor can another waiver service send staff into your center to meet a participant’s needs there. Under DHHS’s July 2026 service summary, the provider “must have a licensed nurse on staff, or contract with a licensed nurse,” to perform the health assessment, the nursing component, and supervision of personal care.

The six-hour day

Nebraska now bills adult day health two ways. “A daily rate is required for six hours or more but less than 24 consecutive hours”; shorter attendance is billed by the hour. The AD/TBI Waivers Fee Schedule effective July 1, 2026 lists Adult Day Health under service code 9245 at a maximum allowable rate of $81.22 for a day of six or more hours and $13.53 per hour. One protection is written into the service summary: when a participant “must leave the facility due to an unplanned need and has been there less than six hours, this is considered a full day for reimbursement purposes.”

Before July 1 the day threshold was four hours and there was no hourly unit; the January 2024 version of the same DHHS summary said adult day was provided “for at least four, but less than 24 hours per day.” The Medicaid regulation at 480 NAC 5 still carries the four-hour language, but the CMS-approved waiver and DHHS’s current summary govern. The $81.22 figure is also the first time DHHS has published a statewide maximum for the service; Provider Bulletin 26-02 explains that the federal Ensuring Access rule now requires states to post fee-for-service rates publicly. Under the waiver, the adult day rate is a fixed statewide rate set by DHHS and adjusted, when it is adjusted, through the Legislature’s biennial budget.

Who qualifies, who authorizes, and the new cap

A participant must be Medicaid-eligible, 65 or older or living with a disability, and meet nursing-facility level of care — under the waiver, a limitation in at least three activities of daily living combined with a risk factor, a medical condition, or a cognitive limitation, or one ADL limitation combined with both a risk factor and a cognitive limitation, assessed with the interRAI Home Care instrument. Adult day health is available from age 18.

Every participant has a services coordinator: DHHS staff for people under 65, and for people 65 and older a choice between DHHS and the local Area Agency on Aging. The coordinator meets the participant at least monthly, builds the person-centered plan, and, under the AD/TBI Provider Policy Manual, “completes service authorizations to assign funding to AD and TBI providers chosen by the participant.” An authorization must be in place before service starts, covers up to twelve months, and cannot be backdated. Participants must use at least one waiver service every 90 days to stay enrolled.

The renewal’s most contested change is the cap. Under the approved waiver, “participants shall be limited to no more than 150% of the average NF institutional costs for home and community-based services only” — $138,657 for the current year, based on a $92,438 nursing facility average — with exceptions only for personal care needs tied to immediate health and safety. For most adult day participants that ceiling is far above what a full week of attendance costs, but it is now the number every services coordinator is working under.

Licensed, and the license expires every July 31

Nebraska licenses adult day services under the Health Care Facility Licensure Act. Section 71-404 defines an adult day service as a program providing care and support services for less than 24 hours “to four or more persons who require or request such services due to age or functional impairment”; a 2026 law, LB 1057, added PACE centers to the exclusions. Under 175 NAC 5, the license fee runs $200 for a capacity of 4 to 16, $250 for 17 to 50, and $300 for 51 and up; every license “expires on July 31 of each year”; and a change of ownership or premises terminates it. The DHHS licensure page adds that the Department has 30 working days to conduct the initial on-site inspection after a complete application, may inspect unannounced at any time afterward, and must be notified in writing ten days before a service is sold, leased, discontinued, or moved.

The licensure rules set no numeric staffing ratio — the standard is staff sufficient to meet consumer needs — and no nursing requirement; the licensed-nurse requirement comes from Medicaid, not the license. Licensure does require a criminal background check and registry checks before hire, a health screening before client contact, an administrator or equally qualified backup on site during operating hours, a written agreement of participation and service plan before services begin, medication administration by a licensed professional or a registered medication aide, locked medication storage, menus planned to a recognized dietary guide, and one toilet fixture for every ten consumers. Medicaid layers its own requirements on top: at least one full-time trained staff person on site at all times, direct care staff with training or a year of experience plus CPR and first aid, the licensed nurse, and — new this year — abuse and neglect training for every waiver provider.

Billing: the state system, not a clearinghouse

This is where Nebraska differs from most states. Adult day health claims do not go to the Medicaid claims system at all. The approved waiver lists Adult Day Health among the services “processed through the state-mandated web-based case management system,” and states that “billings flow directly from providers to the state-mandated web-based case management system.” On May 1, 2025, AD Waiver providers moved to that system for electronic claiming and authorizations, and paper claims stopped being accepted for services after that date. A provider acknowledges each authorization in the system, delivers the service, and submits the claim there — within six months of the date of service under 471 NAC 3, with nothing payable more than two years out. Any share of cost is billed to the participant.

Because the claim itself is entered in the state system rather than transmitted through a clearinghouse, the software job in Nebraska is the record behind the claim: whether the participant crossed the six-hour line, what time they arrived and left, and what the nurse and staff documented that day. Your attendance tracking and nursing documentation are what turn a day into a billable unit.

Two more billing facts. Home- and community-based waiver services are excluded from Heritage Health managed care and “will continue to be provided under the State’s fee-for-service program,” per the Heritage Health member FAQ, so no health plan stands between you and DHHS. And electronic visit verification does not apply: the waiver names personal care, a relative’s personal care, in-home respite, and companion as the EVV services, and places adult day health explicitly in the non-EVV billing stream.

The records behind every billed day

The provider manual states the minimum for a claim: “Start and end times of services provided” and, where the service involves community integration, the location. Waiver providers keep records supporting payment for six years; the licensure rules require seven years for the consumer record, which must contain “daily documentation of care, treatment, services and supervision provided” and any unusual event. Agencies use the state system for the medication administration record, billing and attendance, safety plans, and health records, and the Adult Day Health Service Plan is reviewed at least semiannually with a copy to the services coordinator. Reportable incidents — abuse or neglect allegations, exploitation, medication errors that lead to a poison-control call or emergency care, unexplained deaths — go to the coordinator, who files a General Event Report.

The State Auditor’s August 24, 2026 report is the best guide to what reviewers now look for. It found the AD Waiver had grown from $64.8 million in 2016 to $434.1 million in 2025, that 158 participants used adult day health in 2025 at a cost of $1.45 million, and that $181,199 in overpayments were identifiable from the data alone — services billed for more than 24 hours in a day, duplicate billings, and, in one case, a personal care provider billing for the same participant at the same time an adult day center was billing. Since the waiver forbids exactly that overlap, a center whose attendance record shows arrival and departure times has already answered the question.

Where to check

• The approved AD Waiver NE.0187.R08.00 and DHHS’s public comment and renewal page
• The AD/TBI Waivers Fee Schedule, the Adult Day Service Summary, and the AD/TBI Provider Policy Manual on DHHS’s AD provider page
• DHHS’s adult day service licensure page and 175 NAC 5
• The State Auditor’s AD Waiver report