Attorneys from the Center for Medicare Advocacy, Vermont Legal Aid and the Centers for Medicare & Medicaid Services (CMS) have agreed to settle the “Improvement Standard” case, Jimmo v. Sebelius. A proposed settlement agreement was filed in federal District Court on October 16, 2012. When the judge approves the proposed agreement, a process that may take several months, CMS will revise the Medicare Benefit Policy Manual and other Medicare Manuals to correct all suggestions that Medicare coverage is dependent on a beneficiary “improving.” New policy provisions will state that skilled nursing and therapy services necessary to maintain a person’s condition can be covered by Medicare.

CMS will then undertake a comprehensive nationwide Educational Campaign to inform health care providers, Medicare contractors, and Medicare adjudicators they should not limit Medicare coverage to beneficiaries who have the potential for improvement. Instead, providers, contractors, and adjudicators must recognize “maintenance” coverage and a beneficiary’s need for skilled care that is performed or supervised by professional nurses and therapists. Jimmo will be certified as a nationwide class.

As advocates, beneficiaries, and their families have long known, the Improvement Standard has harmed thousands of older and disabled Medicare beneficiaries who need skilled care to maintain their conditions. Among those most affected are those with chronic conditions. The effects of the Improvement Standard on beneficiaries with chronic conditions is underscored by the organizations that joined individual Medicare beneficiaries in challenging the Improvement Standard in Jimmo – the National Multiple Sclerosis Society, Parkinson’s Action Network, Paralyzed Veterans of America, the Alzheimer’s Association, United Cerebral Palsy, and the National Committee to Preserve Social Security and Medicare.

In an October 24, 2012 editorial, “A Humane Medicare Rule Change,”[3] the New York Times recognized the proposed settlement as reversing an “irrational and unfair approach to medical services” that developed “over decades because of Medicare’s fragmented and loosely administered process for handling beneficiary claims.” The editorial praised the settlement as “clearly the humane thing to do for desperately sick people with little hope of recovery.”

An important point, also identified by the New York Times, is that significant cost savings could result from applying the corrected coverage standard. When Medicare beneficiaries receive medically necessary nursing and therapy services that enable them to maintain their functioning or prevent or slow their decline, many will be able to remain in their own homes and avoid expensive hospitalization and nursing home care.

A key current public health initiative – reducing avoidable hospitalizations and rehospitalizations – is based on evidence that avoidable hospitalizations not only often result in poor health outcomes for patients but also are enormously expensive for the Medicare program. Under the Improvement Standard, beneficiaries were able to obtain care and treatment under the Medicare program only after their health deteriorated, often to the point of rehospitalization. By preventing the inappropriate denial or premature discontinuation of Medicare coverage for beneficiaries, the Jimmo settlement should lead to smarter, and potentially less expensive, health care for many people and relief for their families.

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