On October 16, the US Department of Health and Human Services and disability rights attorneys entered into a proposed settlement of a class-action lawsuit (Jimmo v. Sebelius), that if approved by the Court will clarify the so-called "improvement standard" used in the past by Medicare providers (i.e. skilled nursing homes (SNFs), home health providers, or other outpatient providers) to deny Medicare coverage to beneficiaries who suffer from chronic conditions, such as Parkinson's disease, ALS and multiple sclerosis.
When receiving Medicare services, older adults (or people with disabilities) and their families usually encounter the onerous improvement standard when notified by the provider that Medicare will no longer pay for the services (e.g. skilled nursing or physical therapy) because they "not improving" or that, "they have platuaed in their progress and now only need maintenance services." Medicare beneficiaries with chronic conditions have often been denied covered services based solely on the diagnosis of the chronic condition.Understandably, besides the obvious impact of ceasing skilled nursing and therapy services, these denial of coverage letters prompt feelings of abandonment and hopelessness on the part of the recipient.
Curiously, the improvement standard is not supported by law and does not appear in Medicare regulations. To the contrary, Medicare SNF regulations state:
The services must be provided with the expectation, based on the assessment made by the physician of the patient's restoration potential, that the condition of the patient will improve materially in a reasonable and generally predictable period of time, or the services must be necessary for the establishment of a safe and effective maintenance program (emphasis added) 42 CFR §409.32(c)
In fairness to Medicare providers, I suspect that many denials of coverage were an over zealous response to the Federal governments continued efforts to combat Medicare fraud and abuse. Training guidelines for nursing home administrators and physical therapists are replete with warnings about providing unneccessary services (i.e. Medicare abuse). Also, although the Medicare manual provisions did not include an "improvement standard" they were sufficiently vague regarding services for those with chronic conditions that not only providers, but also administrative law judges found the subject confusing. Additionally, Medicare providers often assumed (falsely) that if they erred, the patient would appeal the denial of coverage. In practice, the mechanics of appealing the denial of coverage often seemed daunting for many older adults who perceived the effort to be an exercise in futility.
Under the proposed settlement, HHS will revise the Medicare Benefit Manuals to explicitly cover maintenance nursing and therapy and conduct a formal education campaign for Medicare providers, administrative law judges, suppliers and others.
As reported on by many industry journals, it is expected that implementation of the settlement will have a significant impact on the coverage of skilled services for Medicare beneficiaries with chronic conditions provided in home health, skilled nursing facilities, and outpatient therapy. Of course, the expansion in Medicare services means a concomitant expansion in Medicare expenditures, which as of this date has not been quantified.
What do you think? Have you ever received a Denial of Coverage letter from a Medicare provider or contractor? Learn more on Twitter @aginginchicago