Court Case Settlement May Broaden Skilled Services

The post-acute and long term care sector is closely following Medicare’s decision to start paying nursing facility, home care and physical therapy bills for some patients who were previously denied coverage.  Historically, Medicare regulations eliminated coverage of skilled nursing and home care services if patients were not shown to be improving. The care in question might have been physical therapy for stroke victims, home nurse visits for those with Alzheimer’s or post-hospital nursing facility care for diabetics.  Once their health status no longer reflected improvement or started deteriorating, Medicare would stop paying.

In a case filed in U.S. District Court in Vermont, patient advocates argued that the requirement for improvement was not supported by law or regulation. This month, the Obama administration and the Center for Medicare Advocacy agreed to a settlement that would modify the rules. U.S. District Judge Christina C. Reiss must approve the settlement, which was recently reported by the New York Times.

The Court is now considering the proposed settlement provisions for fairness and reasonableness; it is expected to be finalized in 2013.  When the settlement is finalized, it is expected that CMS will clarify  the coverage standards for benefits when a patient has no restoration or improvement potential but still needs SNF, home health (HH) and outpatient therapy (OPT) services (e.g., “maintenance coverage standards”) by revising the Medicare Benefit Policy Manual as follows:

  • SNF, HH and OPT coverage of therapy to perform a maintenance program 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.  
  • SNF and HH coverage of nursing care to perform a maintenance program does not turn on the presence or absence of a beneficiary’s potential for improvement from the nursing care, but rather on the beneficiary’s need for skilled care.  
  • These revisions will not apply to therapy services provided in an inpatient rehabilitation facility (IRF).  Again, upon approval of the Court, it is expected that CMS will clarify that an IRF claim cannot be denied because a patient cannot be expected to  a) achieve complete independence in the domain of self-care or b) return to his/her prior level of functioning.

The settlement may also bring some fiscal relief to the Medicaid program since Medicaid is in most respects the payer of last resort.  If Medicare skilled coverage expands, Medicaid may see some lowering of expenditures.

VHCA will continue to pass along updates about this important case as new information becomes available.