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Medicare beneficiaries, patient advocacy organizations, and providers have long objected to the improvement standard and consider it the reason agencies and contractors deny Medicare coverage of SNF care, home health care, physical therapy (PT), speech therapy (ST), and occupational therapy (OT). Many Medicare coverage denials occur because a patient’s condition is deemed to be stable, chronic, or not improving, or because the skilled services only maintained the patient’s condition. The improvement standard is not contained in or suggested in either the Medicare statute or the implementing regulations. In fact, the regulations related to criteria for these services and the need for skilled services actually specify that the “restoration potential of a patient is not the determining factor in whether skilled services are needed.” 

On January 24, 2013, the U. S. District Court for the District of Vermont approved a settlement agreement in the case of Jimmo v. Sebelius​ (hereinafter Jimmo) that Medicare contractors were inappropriately applying an “improvement standard” in making claims determinations for Medicare coverage involving skilled care (e.g., SNF, home health and outpatient therapy benefits). The goal of the settlement is to ensure that claims are processed consistently so that Medicare beneficiaries receive the full coverage to which they are entitled. Thus, such coverage depends on whether skilled care is required, not on the beneficiary’s restoration potential. 

The Centers for Medicare and Medicaid Services (CMS) agreed to finalize and issue revised materials and to undertake an educational campaign.  CMS has since released the long anticipated revised program manual guidance in accordance with the Jimmo settlement agreement.  Read CMS Change Request (CR) 8458 to the Medicare Benefit Policy Manual with an accompanying MLN Matters article (MM8458) on December 6, 2013.  These documents were subsequently revised on December 13.  In addition, CMS held a one-hour National Provider Call on December 19 to provide an overview of the clarifications to the Medicare program manual.

AHCA Says Providers need to proceed cautiously…read more