[This article was originally published on October 25, 2012. The links were updated on August 24, 2018.]
Attorneys and other advocates involved in the proposed settlement to end Medicare’s longstanding practice of requiring beneficiaries to show a likelihood of improvement in order to receive coverage of skilled care and therapy services fleshed out some of the settlement's details at a media briefing after the news broke. (See “Medicare to End Practice of Requiring Patients to Show Progress to Receive Nursing Coverage.”)
Gill Deford, Director of Litigation for the Center for Medicare Advocacy, which spearheaded the suit, said the settlement is expected to be finalized “sometime this winter.” At that point, the Department of Health and Human Services (HHS) will have one year to issue revisions to its Medicare Benefit Policy Manual and to carry out an educational campaign.
According to the terms of the proposed settlement, HHS will revise the relevant portions of Chapters 7, 8 and 15 and relevant portions of Chapter 1, Section 110, of the Manual. The revisions will clarify that skilled nursing facility, home health and outpatient coverage of therapy “does not turn on the presence or absence of a beneficiary’s potential for improvement from the therapy, but rather on the beneficiary’s need for skilled care.” In addition, changes will reflect that an inpatient rehabilitation facility claim cannot be denied because a patient could not be expected to achieve complete independence in the domain of self-care or could not be expected to return to his or her prior level of functioning.
Nationwide Educational Campaign
HHS must also mount a nationwide educational campaign to communicate these coverage standards to Medicare providers and contractors through “written materials and interactive forums.” Among the campaign’s recipients will be administrative law judges, Quality Improvement Organizations and Medicare Administrative Contractors. The campaign will include two national calls, one for providers and suppliers and the other for contractors and adjudicators, and both will employ PowerPoint slides to assist in communicating the “policy clarifications.”
After the campaign, HHS will review samples of claims to determine any problems in the application of the coverage standards.
Regarding notice to beneficiaries, Judith Stein, Executive Director of the Center for Medicare Advocacy, said “we want to get the word out that Medicare should be available if they need skilled care to maintain their condition.”
Re-Review of Denied Claims
Also under the proposed settlement, a nationwide class of beneficiaries will be certified and many class members will have an opportunity to have their previously denied claims reviewed according to the clarified Medicare standards. Those who received a final non-appealable denial of Medicare coverage after January 18, 2011 (the date the lawsuit was filed), up to the end of the educational campaign are entitled to a re-review of their claim denial.
Stein could not say whether most of the denials are for patients in nursing homes or home care recipients or how many Medicare beneficiaries might be ultimately affected by the change -- perhaps tens of thousands, perhaps hundreds of thousands. She said that Medicare’s regular cap on the duration of coverage for a skilled nursing stay (100 days) and the cap on therapy (typically $1,800), will remain in place, although she noted that beneficiaries can go beyond the therapy cap by requesting an exception.
To What Extent Will Dementia Care Be Covered?
It is unclear to what extent the policy change will increase Medicare coverage for those suffering from dementia who could benefit from skilled care to slow the progression of their condition.
Quoted in the New York Times, Peter Thomas, a lawyer in private practice who is the outside counsel for the American Academy of Physical Medicine and Rehabilitation, said, “I think the settlement opens coverage up to pretty much any condition that creates functional impairment.” Thomas likened it to the Americans With Disabilities Act, which is not restricted to particular diagnoses. “In that respect, it’s probably a more expansive settlement than some people might think.”
HHS will pay the plaintiffs’ attorneys fees, but post-settlement approval work will be capped at $300,000, a limit to which the plaintiffs objected but agreed.
For the Center for Medicare Advocacy’s page on the settlement, including the proposed settlement, click here.
For a New York Times editorial on the proposed settlement, calling it “clearly the humane thing to do for desperately sick people with little hope of recovery,” click here.
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