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Settlement in Jimmo Case Would Expand Coverage of Maintenance Skilled Care

Maintenance Skilled Care

(October 26, 2012):  Recently, the trade press reported a proposed settlement between the Federal government and Medicare beneficiaries that, if approved by the Court, will require the Medicare program to pay for skilled nursing and therapy services if they are needed to “maintain the patient’s current condition or prevent or slow further deterioration,” rather than requiring that the patient’s condition be expected to improve.  See Jimmo et al. v. Sebelius, Civil Action No. 5:11-CV-17-CR.  Previously, although not required by either the statute or regulations, contractors interpreted certain manual provisions to require that a patient’s condition be expected to improve as a condition of Medicare coverage of skilled care services.

The proposed settlement would cover skilled nursing and therapy services provided as part of home health services, skilled nursing facility services, and outpatient therapy services.  Additionally, the proposed settlement agreement addresses services in an inpatient rehabilitation facility (“IRF”), albeit in a different manner.  For IRFs, the settlement would provide that a claim would not be denied because “a patient could not be expected to achieve complete independence in the domain of self-care or … return to his or her prior level of functioning.”

Under the proposed settlement agreement, the Medicare program would revise its manuals, conduct an educational campaign of Medicare contractors, ALJs, the Medicare Appeals Council, providers and suppliers, and others, and potentially issue a CMS Ruling.  The proposed Settlement Agreement also provides for accountability measures on the part of CMS, including sampling of QIC decisions and bi-annual meetings with attorneys for the Plaintiffs in the case.

Under the proposed Settlement Agreement, the class would cover Medicare beneficiaries who received skilled nursing or therapy services in an SNF, HHA, or outpatient setting, were denied coverage based on a lack of improvement potential “in violation of the [SNF, HHA, or outpatient therapy] maintenance coverage standards [under the settlement agreement] and that denial became final and non-appealable on or after January 18, 2011.”  Beneficiaries who fall within the class will be able to seek re-review of these claims.

Of significant interest, the class only covers individuals who seek Medicare on their own behalf, and “specifically excludes providers or suppliers of Medicare services or a Medicaid State Agency.”  The settlement agreement would specifically preclude providers, suppliers, and a Medicaid State Agency from receiving a re-review of claims on behalf of, or under assignment from, a beneficiary class member.  That having been said, if the settlement agreement is approved by the Court, providers will certainly argue that the “revised” standard should apply to future claims or those that are currently in the denial or appeal process.  Moreover, we can expect additional litigation where the government attempts to deny a re-review by applying a different standard for coverage of beneficiary claims than it does for those assigned to a provider.

As noted, above, the proposed Settlement Agreement is awaiting approval of the Court in Jimmo and will not be effective until, and if, it is approved.  However, it should have a significant impact on Medicare coverage of skilled care services provided in home health, skilled nursing facilities, and outpatient therapy.

Providers seeking information on how this new standard will affect their current and future claims or current or past appeals, should contact Michael Cook.

Healthcare LawyerMichael Cook is an experienced health lawyer and is Co-Chair of the firm’s growing health care practice.  He has over 30 years of health law experience and is a recognized expert in post-acute care representation.  Should you have questions regarding Jimmo, Medicare coverage of skilled care services, or any other health law issues, please call Michael at (202) 298-8750.

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