CMS Clarifies Medicare Coverage of Maintenance Therapy

As previously reported, 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, in which the plaintiffs alleged that Medicare contractors were inappropriately applying an “Improvement Standard” in making claims determinations for Medicare coverage involving skilled care (e.g., the skilled nursing facility (SNF), home health (HH), and outpatient therapy (OPT) benefits). The settlement agreement sets forth a series of specific steps for the Centers for Medicare & Medicaid Services (CMS) to undertake, including issuing clarifications to existing program guidance and new educational material on this subject.

CMS never established a standard for improvement that said Medicare payments would be withheld for treatment given strictly to maintain, rather than improve, a resident's condition, the agency stated in a recently posted Fact Sheet.  Therefore, the settlement in the case did not eliminate the improvement standard or otherwise expand Medicare coverage.  Instead, CMS agreed to take specified actions to ensure that claims are correctly evaluated in accordance with existing Medicare policy.

As addressed in the Fact Sheet, nursing facilities along with other affected providers, must sufficiently document the need for skilled care in order to obtain Medicare coverage for so-called maintenance therapy.  CMS has also indicated that Medicare Advantage health plans are strongly encouraged to review the Fact Sheet and to ensure that claims for these skilled services are being properly reviewed and adjudicated.

Guidance provided in the Fact Sheet focuses on the condition that any Medicare coverage or appeals decisions concerning skilled care coverage must reflect the requirement that providers demonstrate that the needs of the resident can only be met through skilled rather than non-skilled care.  “In this context, it is also essential and has always been required that claims for skilled care coverage include sufficient documentation to substantiate clearly that skilled care is required, that it is in fact provided, and that the services themselves are reasonable and necessary, thereby facilitating accurate and appropriate claims adjudication.”

To meet the conditions specified in the settlement agreement, CMS plans to first update program manuals used by Medicare contractors to clarify that the need for skilled care is the determining factor in whether maintenance therapies will be covered.  The agency will then undertake an educational campaign using tools such as Medicare Learning Network articles and national conference calls with providers and suppliers.