Court Approves Settlement with HHS Requiring Coverage For Maintenance Therapy Services [02-07-13]

Filed under: Industry Updates — Editor @ 9:58 am

Glenda JimmoA previous Marden Industry Update Post on November 12, 2012 reported on a proposed settlement with the U.S. Department of Health and Human Services (“HHS”) in a class-action lawsuit concerning Medicare coverage for medical rehabilitation services. The proposed settlement of the case, Jimmo et. al. v. Health and Human Services Secretary, was given final approval by Chief Judge Christina C. Reiss in the U.S. District Court in Vermont on January 24, 2013. Under the settlement HHS will be required to apply a revised standard when determining coverage for rehabilitation services.  This impacts all services settings including SNFs, outpatient clinics and home health.

The Jimmo case was a nation-wide class action in which over 10,000 plaintiffs joined, including thousands of individual Medicare beneficiaries whose claims for skilled nursing and therapy services were denied before January 18, 2011. The certified class of plaintiffs also included organizations such as the National Multiple Sclerosis Society, the Parkinson’s Action Network, the Paralyzed Veterans of America, and the National Committee to Preserve Social Security and Medicare.

Specifically, under the settlement, Medicare will be required to pay for skilled nursing and therapy services for beneficiaries if such services are needed to “maintain the patient’s current condition or prevent or slow further deterioration.” This new standard would replace the “Improvement Standard” that has purportedly been improperly utilized. Furthermore, federal officials have agreed to rewrite the Medicare manual so that it no longer contains language employing the “Improvement Standard.” The modifications to the Medicare manual will apply to the traditional Medicare program, as well as to private Medicare Advantage plans and to those who are 65 and older, as well as those who are 65 and under but qualify for Medicare because of a disability. Plaintiffs in the class action litigation will have an opportunity to have denied claims reviewed under the revised standard. Judge Reiss has retained jurisdiction to enforce this agreement for up to 4 years.

Please note several things concerning the settlement:Judge Christina Reiss

First, CMS must now modify the Medicare Benefit Policy Manual as well as other relevant agency policies and guidelines, to ensure that Medicare coverage is provided for skilled maintenance services in outpatient facilities, skilled nursing facilities, and home health agencies. Thus far, CMS has not provided a time frame for making the necessary modifications although the settlement agreement contemplates that these activities be completed by next January.

Second, it is anticipated that CMS will undertake a nationwide campaign to educate parties responsible for making Medicare coverage determinations about the requirements of the settlement.

Third, even though CMS has not issued the requisite policy revisions, Medicare rights advocates such as the Center for Medicare Advocacy argue that beneficiaries with claims dating back to January 2011 will be able to have their claims reassessed under the new standard (The Jimmo lawsuit was filed in January 2011). These organizations encourage beneficiaries to appeal any claims lodged after that date that are denied on the ground that the services were maintenance therapy or because the patient was showing no improvement.

Fourth, the settlement does not change any other Medicare requirements governing rehabilitation services. For example, the settlement has no effect on the 100 days per benefit period limitation on care in a skilled nursing facility.

Fifth, the Center for Medicare Advocacy has “self-help packets” on its website to assist beneficiaries in appealing coverage denials based on maintenance therapy grounds.

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