October 01, 2014

Update on Jimmo v. Sebelius Medicare Standards for Skilled Nursing Care

Morris Klein

(Note: The pdf for the issue in which this article appears is available for download: Bifocal, Vol. 36, Issue 1.)

 

Jimmo v. Sebelius challenged the legality of the “improvement” standard.

One of the few Medicare benefits available for long-term services and supports is payment for up to 100 days of skilled care in a nursing home.1 Medicare pays the entire amount for the first 20 days and the excess of $152 per day ($157.50 effective January 1, 2015) for the remaining 80 days.2

Medicare does not guarantee the entire 100 days of coverage, however, and the patient’s need for skilled care services is under constant review. Until recently, the criteria for continued skilled care have been based on informal Medicare policy guidelines asserting that a patient must demonstrate “improvement” from receiving skilled care services. This policy resulted in many Medicare beneficiaries losing their benefit far short of the full eligibility period.

In Jimmo v. Sebelius, No. 11-CV-17 (D. Vt.), various individuals and organizations challenged the legality of the “improvement” standard by filing a class-action lawsuit against the U.S. Department of Health and Human Services. Plaintiffs argued that the “improvement” standard was not based on federal Medicare law and regulations.

The government settled the lawsuit after it failed to win its motion to dismiss. The government agreed to clarify in its manuals and directives to providers to say that the eligibility for the continuation of skilled care services should be based not on the beneficiary’s “improvement” but on whether the beneficiary requires skilled care and whether such services themselves are reasonable and necessary. The federal district court judge presiding over the litigation approved the settlement on January 24, 2013, and CMS agreed to make the necessary changes within one year.

On December 9, 2013, CMS revised its Medicare Benefit Policy Manuals. It also started its promised educational campaign.3 The manuals and educational campaign now make it clear that improvement is not necessary for coverage of skilled nursing and therapy services. The fact a patient has a chronic condition or lacks “improvement” or “restoration potential” should not be deciding factors for access to continued coverage. Such skilled therapy services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a qualified therapist are necessary for the performance of a safe and effective maintenance program. Other skilled nursing services would be covered when necessary to maintain the patient’s current condition or prevent or slow further deterioration as long as the beneficiary requires skilled care for the services to be safely and effectively provided.

The Center for Medicare Advocacy, the lead counsel in Jimmo, reports that beneficiaries and providers are still reporting denials based on the old “improvement” standard. It also notes there are more denials for services that are “not skilled” or “not medically necessary.”

The lead plaintiff in the original Jimmo settlement did not automatically receive Medicare benefits as a result of the litigation. Glenda Jimmo, who is legally blind and has a partially amputated leg, initially appealed her original denial of coverage, as per the terms of the settlement agreement. Last April, the Medicare Appeals Council, the last step in the Medicare administrative appeals system, affirmed her denial on the grounds that she was not improving. She responded by filing a second lawsuit in federal court, and on October 29, 2014, twenty-one months after the original settlement, Medicare agreed to cover her care.

Advocates need to scrutinize Medicare skilled care denials with care to determine if the beneficiary still qualifies for skilled care, and, if necessary to appeal.4

Separately, the settlement also permits Medicare beneficiaries whose denial of coverage became final and nonappealable after January 18, 2011, because of the improvement standard, to have their claims re-reviewed under the revised manual provisions. The review process is not automatic, and a beneficiary must fill out and submit a Request for Re-Review form. If the claim became “final and non-appealable” from January 18, 2011 through January 24, 2013, the deadline for filing is July 23, 2014. If it became “final and non-appealable” from January 25, 2013, through January 23, 2014, the deadline is January 23, 2015. Claims that became final and nonappealable after January 23, 2014, are not eligible for re-review.

The Center for Medicare Advocacy has posted self-help packets online5 to help patients and advocates determine whether the basis for the denial is appealable and how to prosecute the appeal.

Note that the settlement affects only the standard to receive skilled care. Other Medicare eligibility rules remain the same. The 100-day limit on skilled nursing care rule has not changed. Also, skilled care services will continue to be provided only when such care is reasonable and necessary. Moreover, someone whom the hospital did not formally admit for at least three days but instead classified as at the hospital only for “observation” does not qualify for any skilled care subsidy.6

The Jimmo settlement represents affirmation of what the law has always required Medicare to provide in benefits and a step forward in the quest by patients to remain as healthy as possible for as long as possible. It is now up to advocates to continue to make sure the settlement is followed.

 

Medicare also will pay for physician-authorized skilled care to a home-bound beneficiary on an intermittent basis, or for inpatient care in a rehabilitation facility. Skilled care includes physical, occupational and speech therapy, wound therapy, and observation of changing conditions.

The nursing home stay must commence within 30 days of discharge from a hospital where the patient had been admitted for at least three days.

Links to the manuals are: http://www.cms.gov/RegulationsandGuidance/Guidance/Transmittals/Downloads/R179BP.pdf and http://www.cms.gov/OutreachandEducation/MedicareLearningNetworkMLN/MLNMattersArticles/Downloads/MM8458.pdf.

An expedited appeal must commence by noon of the next calendar day of issuance of the notice of denial of benefits.

The link is http://www.medicareadvocacy.org/medicare-info/improvement-standard/.

In Bagnall v. Sebelius (No. 3:11cv01703, D. Conn), advocates challenged the use of the observation status, but the court dismissed the lawsuit. ■

Morris Klein

Morris Klein, CELA, CAP, practices law in Bethesda, Maryland.  He is a member of the NAELA Public Policy Steering Committee.

Reprinted from the August/September 2014 issue of NAELA News. Reprinted with permission. Copyright, National Academy of Elder Law Attorneys, www.NAELA.org. The CAPsules column is provided by members of the Council of Advanced Practitioners (CAP).