In 2013, a settlement was reached in Jimmo v. Sebelius, Docket No. 11-cv-17 (D.Vt., January 18, 2011), a nationwide federal class-action lawsuit. Under the settlement, Medicare coverage rules changed significantly. Prior to the settlement, a decades-old practice, called the “improvement standard,” required beneficiaries to show medical or functional improvement before Medicare would pay for covered services, i.e., skilled nursing and therapy services. Coverage was denied under the “improvement standard” when a beneficiary had “plateaued,” was “medically stable,” had a condition which is “chronic,” or needed services for “maintenance only.” Millions of beneficiaries have been wrongly told that Medicare can’t cover continued services because the patients failed to show improvement.

The “improvement standard” was abolished under the settlement in Jimmo v. Sebelius and a new “maintenance coverage standard” established. Under the new standard, Medicare will pay for skilled nursing and therapy services if those services are needed to “maintain the patient’s current condition or prevent or slow further deterioration,” regardless of whether the patient’s condition is improving. Under the “maintenance coverage standard,” it is unnecessary to improve in order to get coverage under the Medicaid laws and related regulations.

Older patients with chronic and progressive diseases, such as dementia, Parkinson’s disease or heart failure, are particularly vulnerable to coverage denials under the “improvement standard” as they are unlikely to improve over time. Yet the same patients would be covered under the “maintenance coverage standard” since therapy might help those patients maintain their current condition or slow further decline. (I posted a blog article about the settlement in the Jimmo v. Sebelius case here.)

Over the years, coverage providers and contractors reviewing Medicare claims have continued to wrongly deny coverage when beneficiaries didn’t demonstrate improvement, despite the settlement. As a result, the plaintiffs in the Jimmo case went back to court, seeking to enforce the settlement.

Under the 2013 settlement,  the Center for Medicare and Medicaid Services (CMS) was required to rewrite its manuals and to begin an educational campaign to publicize the change in Medicare’s coverage rules. Last year, the federal judge overseeing the settlement ruled that CMS had to mount a better educational campaign informing health care providers and Medicare adjudicators that the “improvement standard” was no longer in effect.

On February 16, 2017, the Jimmo v. Sebelius court approved a Corrective Statement to be used by CMS to affirmatively disavow the use of an “improvement standard” for Medicare coverage.  The government will use the statement as part of its Corrective Action Plan, which was ordered by the Court in February 2017 to remedy noncompliance with the Jimmo Settlement.

A portion of the court-approved CMS Corrective Statement follows:

The Centers for Medicare & Medicaid Services (CMS) reminds the Medicare community of the Jimmo Settlement Agreement (January 2014), which clarified that the Medicare program covers skilled nursing care and skilled therapy services under Medicare’s skilled nursing facility, home health, and outpatient therapy benefits when a beneficiary needs skilled care in order to maintain function or to prevent or slow decline or deterioration (provided all other coverage criteria are met). Specifically, the Jimmo Settlement required manual revisions to restate a “maintenance coverage standard” for both skilled nursing and therapy services under these benefits:

Skilled nursing services would be covered where such skilled nursing services are necessary to maintain the patient’s current condition or prevent or slow further deterioration so long as the beneficiary requires skilled care for the services to be safely and effectively provided.

Skilled therapy services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a qualified therapist (“skilled care”) are necessary for the performance of a safe and effective maintenance program.  Such a maintenance program to maintain the patient’s current condition or to prevent or slow further deterioration is covered so long as the beneficiary requires skilled care for the safe and effective performance of the program. (Emphasis Added)

Accordingly, if a reader of this blog requests Medicare coverage for therapy or other medical service and is denied because of an alleged “failure to improve,” the decision should be appealed. The form readers should use to seek review of a denial of coverage based on a “failure to Improve” is available here: Request for Re-Review of Medicare Claims Related to the Settlement Agreement in Jimmo v. Sebelius

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