Class Action Lawsuit Against the Federal Government Terminates Medicare Improvement Standard

More than a year after the lawsuit was filed, a pending Settlement Agreement will provide relief for some Medicare patients.

On January 18, 2011, AAPM&R, along with other plaintiffs, including Glenda R. Jimmo, Rosalie J. Berkowitz, the National Multiple Sclerosis Society, the Parkinson’s Action Network, Paralyzed Veterans of America and the National Committee to Preserve Social Security and Medicare filed a lawsuit in the U.S. District Court, District of Vermont, against the federal government to ensure Medicare beneficiaries could rightfully access the Medicare coverage and health care they are entitled to under Medicare law. The lawsuit challenged what is referred to as the “improvement standard” that the Centers for Medicare and Medicaid Services (CMS) routinely used to deny treatment in a variety of patient care settings under the Medicare program. In October 2011, the Chief Judge ruled that the AAPM&R did not have 'standing' to proceed as a plaintiff. Following months of meetings between plaintiffs’ counsel and government attorneys, on October 23, 2012, in a proposed settlement agreement, the administration agreed to halt the outdated policy that required many beneficiaries to demonstrate a likelihood of medical or functional improvement before Medicare would pay for skilled nursing and therapy services.

Under the agreement, which will amend certain Medicare coverage rules, Medicare will pay for such services if they are needed to “maintain the patient’s current condition or prevent or slow further deterioration,” regardless of whether the patient’s condition is expected to improve. In addition, federal officials agreed to revise the Medicare Benefit Policy Manual to clarify that Medicare coverage of nursing and therapy services “does not turn on the presence or absence of an individual’s potential for improvement,” but is based on a beneficiary’s need for skilled care.

AAPM&R was successful in making an impact statement that challenged the 'improvement standard’ which was a wrongful interpretation of the Medicare statute that led to the illegal denial of care for thousands of beneficiaries on the grounds that the individual’s condition was stable, chronic, not improving or a patient only needed "maintenance care." Now, thousands of beneficiaries with chronic conditions and disabilities may be able to qualify for Medicare coverage of potentially costly home health care, skilled nursing home stays and outpatient therapy under policy changes planned by the Obama administration.

We are optimistic that these changes will also be adopted by various private payers as well as by the Medicaid program. It is vital that the sickest patients have access to the medically necessary treatment needed to maintain functional status and prevent further deterioration, as this could mean the difference between independent living and long term care. All people with disabilities and chronic conditions deserve the best quality of life possible.

AAPM&R would like to enthusiastically acknowledge the exceptional work of the Center for Medicare Advocacy (CMA), Inc., whose legal staff and others provided their expertise for the lawsuit and participated in the draft settlement agreement. The Academy was an early supporter and played an important role. It was the tenacity of the CMA attorneys including Judy Stein and Gill DeFord who helped to take us to the ‘finish line’.

CMA, Inc. was established in 1986, and is a national nonprofit, nonpartisan organization that provides education, advocacy and legal assistance to help older people and people with disabilities obtain fair access to Medicare and necessary health care.

Jimmo v. Sebelius Proposed Settlement: Overview and Implications
Audio-only Webinar: This one-hour webinar on the Jimmo v. Sebelius settlement, regarding access to Medicare, outlines the settlement reached and describes the implications of the case. Click on the link below to launch and listen to this webinar.
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Jimmo-vs-Sebelius-Proposed-Settlement.wmvJimmo-vs-Sebelius-Proposed-Settlement87604 KB
Notice-of-Proposed-Settlement-Final-00011763.pdfNotice-of-Proposed-Settlement-Final-00011763104 KB

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