Medicare *Improvement Standard - Long Term Care Discussion Group

Roshunda Drummond-Dye, JD
American Physical Therapy Association
Glenda Jimmo, et. al vs. Kathleen Sebelius
Case was filed on
January 18, 2011
Proposed settlement
agreement filed in
federal District Court
on October 16, 2012
Preliminary Order to
Approve Settlement
filed November 20,
2012 (Contingent
upon fairness
Fairness hearing
held January 24,
2013 and final
approval was given
on that date
Brought on behalf of four individuals from Vermont, Connecticut,
Rhode Island, and Maine and five organizations
Contractors interpretation: "Improvement Standard" provider
must show a “material improvement” in patient’s condition over a
determined period in order to establish medical necessity
Upheld right of patients to continue to receive reasonable and
necessary care to maintain condition or prevent or slow decline
Determinant factor is not whether the Medicare beneficiary will
Decision covers nursing and therapy services provided under
both inpatient and outpatient settings
Mandates a review of all denials subsequent to original filing date
Basis of medical necessity under the Medicare program
Social Security Act §1862(1) states in part, “payment may
not be made under [Medicare] part A or part B for any
expenses incurred for items or services – which are not
reasonable and necessary for the diagnosis or treatment of
illness or injury or to improve the functioning of a
malformed body member.”
Services must be:
o Safe, effective, not experimental
o Appropriate in duration and frequency;
o Furnished in accordance with accepted standards of
medical practice for the condition;
o In an appropriate setting
o Ordered and furnished by qualified personnel
o Appropriate to meet the need, but does not exceed the
o Potential for improvement in response to therapy
Local Coverage Determinations – issued by Medicare
Administrative Contractors, Carriers and Fiscal
o 90 % of Medicare coverage
o Specific coverage requirements for your local area
o Cannot conflict with national Medicare regulations
o Examples: outpatient physical therapy services
National Coverage Determinations –issued by CMS on a
national basis
o 10 % of Medicare coverage
o Examples: cardiac and pulmonary rehabilitation and urinary
Medicare statute does not mandate a showing of
improvement to determine medical necessity
Statutory criteria for treatment of an illness or injury applies
regardless of where covered service is provided
Includes: outpatient, home health, skilled nursing facility,
inpatient rehabilitation facility
42 CFR § 409.32 Criteria for skilled services and the need
for skilled services (SNFs)
(a) (c) The restoration potential of a patient is not the
deciding factor in determining whether skilled services are
needed. Even if full recovery or medical improvement is not
possible, a patient may need skilled services to prevent
further deterioration or preserve current capabilities.
42 CFR §409.44(b)(3)(iii) Skilled Services Requirement
(Home Health)
“(iii) There must be an expectation that the beneficiary's
condition will improve materially in a reasonable (and
generally predictable) period of time based on the
physician's assessment of the beneficiary's restoration
potential and unique medical condition, or the services
must be necessary to establish a safe and effective
maintenance program required in connection with a specific
disease, or the skills of a therapist must be necessary to
perform a safe and effective maintenance program.
42 CFR §409.44(b)(3)(iii) Skilled Services Requirement
(Home Health)
If the services are for the establishment of a maintenance
program, they may include the design of the program, the
instruction of the beneficiary, family, or home health aides,
and the necessary infrequent reevaluations of the
beneficiary and the program to the degree that the
specialized knowledge and judgment of a physical
therapist, speech-language pathologist, or occupational
therapist is required.”
Medicare Home Health Prospective Payment System Calendar
Year 2011 final rule
Clarifies that therapy coverage criteria has always been based on
the inherent complexity of the service which the patient needs
“The unique clinical condition of a patient may require the
specialized skills of a qualified therapist to perform a safe and
effective maintenance program required in connection with the
patient's specific illness or injury. When the clinical condition of
the patient is such that the complexity of the therapy services
required to maintain function involve the use of complex and
sophisticated therapy procedures…by the therapist… or the
clinical condition of the patient is such that the complexity of the
therapy services required to maintain function must be delivered
by the therapist
Injunctive provisions –
o Revise relevant portions of Medicare Benefits Policy Manual
(MPBM, Pub. 100-02, Ch. 1, 7, 8 and 15)
o Clarify coverage standards for SNF, HH, IRF and OPT benefits
o Set forth “maintenance coverage standard”
o Does not expand current coverage benefit or eligibility criteria
o Rescind any current conflicting language from manuals
o Plaintiffs counsel will have 21 days to review manual revisions
(1st draft) submit written comments
o Comments will be taken into consideration and subsequent
14 day review and comment period before finalized
Target Audience: Medicare Administrative Contractors
(MACs), Medicare Advantage (MA) Organizations, Qualified
Independent Contactors (QICs), Recovery Audit Contractors
(RACs), Administrative Law Judges (ALJs), Medicare Appeals
Council, Providers and Suppliers
Medium: Written materials, MLN articles, Medicare
customer service, national calls, open door forums, PPT
posted to CMS website
Claims review through established protocol of sampling of
QIC claims
Bi- annual meeting with plaintiffs counsel on claims review
Expedited review and resolution of errors and denials
Effect on coverage of
services under the state
Medicaid programs?
Effect on future outcomes
reporting under value-based
purchasing and the
Physician Quality Reporting
Effect on rebasing and other
efforts to “curb” utilization
of therapy services under
the Medicare home health
and SNF benefit?
Effect on reporting of
functional limitations under
new outpatient therapy
rules and current functional
reassessment requirements
under home health?
Contact Information:
Roshunda Drummond-Dye, JD
American Physical Therapy Association
Director, Regulatory Affairs
(703) 706-8547
[email protected]

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