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 Federal Jimmo Settlement May Have Coverage Implications, Eventually

Dianne De La MareThe ZPICs’ fascination with therapy progress hints at a potential for application of the recent court ruling in Jimmo v. Sebelius, settled in federal court on Jan. 24, 2013.

The settlement agreement, which indicates that Medicare coverage is available for skilled services to maintain an individual’s condition, appears to reject the so-called “improvement standard,” the American Health Care Association (AHCA) said in a recent memo to its members on the Jimmo settlement.

As explained in AHCA’s memo, “improvement standard” is a term used to encompass all Medicare coverage denials issued “because a patient’s condition is stable, chronic, or not improving, or because the agency or contractor perceives that skilled services only ‘maintain’ the patient’s condition.”

Historically, the term has been used by Medicare agencies and contractors to deny coverage of skilled services, including home health care, skilled nursing facility care, physical therapy, speech therapy, and occupational therapy.

In addition, as Elise Smith, AHCA’s senior vice president of finance policy and legal affairs, points out in the memo, “neither the Medicare statute nor the implementing regulations refer to or suggest an improvement standard.”

In fact, says the memo, the skilled nursing facility regulations’ criteria for skilled services actually specify that the “restoration potential of a patient is not the determining factor in whether skilled services are needed” [42 CFR Section 409.32(c) 2011].

The memo explains that “under the maintenance coverage standard articulated in the Jimmo settlement, Medicare coverage turns on whether the skilled services of a health care professional are needed, not whether the Medicare beneficiary will ‘improve.’”

In other words, “Jimmo emphatically rejects the so-called ‘improvement standard’ for skilled services.”
Although there are implications of the settlement for providers, the Jimmo settlement is not “self-implementing and instead requires CMS to implement it through revised manual provisions,” AHCA advised its members in the memo.

“CMS must now revise its ‘Medicare Beneficiary Policy Manual’ and numerous other guidance and instructions to ensure that Medicare coverage is available for skilled maintenance services in the home health, nursing home, and outpatient settings,” says AHCA’s Dianne De La Mare.

“CMS also has to implement a nationwide education campaign for all entities that make Medicare determinations to ensure that beneficiaries with chronic conditions are not denied coverage because their underlying condition will not improve.”

Since the agency has promised to finalize the manual revisions and educational campaign within one year of the settlement date, “the likelihood of Jimmo having an impact any time soon on audits and coverage decisions is very small,” De La Mare says.
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