Improvement Standard

When I say “Medicare policy,” what’s the first word that comes to mind? Probably not “clear.” Unfortunately, that lack of clarity leaves Medicare rules super prone to misinterpretation and misapplication. Case in point: the so-called Medicare Improvement Standard.

To make a long story short, there have been some major developments regarding this quote-unquote “rule.” I’ll get into the nitty-gritty in a bit, but the meat of the story is that (a) most of what you think you know about this standard is probably false—or, at the very least, a little distorted—and (b) a federal judge recently slapped Medicare with a court-ordered directive to clarify its policy regarding patient improvement and launch a widespread educational campaign to ensure that going forward, all patients and providers interpret the policy correctly.

So, how did this issue make it all the way to federal court? Well, for years, both providers and Medicare beneficiaries have operated under the incorrect assumption that Medicare will only pay for rehab therapy or other skilled care if a patient shows improvement as a result of that care. In short, they believed that no progress meant no coverage—unless the patient’s condition deteriorated, in which case therapy could resume. Thus, even in cases where therapy would maintain a patient’s level of function by preventing a problem from worsening, therapists had to cease treatment until the problem actually got worse. Seems silly, right? More than silly, actually; for those unable to provide or receive therapy services due to this stipulation, it was downright maddening.

Not surprisingly, the issue eventually wound up in front of a federal judge as part of a class-action lawsuit, with the plaintiffs alleging that Medicare contractors were denying or approving claims based on an inaccurate improvement standard. On January 24, 2013, the US District Court for the District of Vermont approved a settlement agreement directing the Centers for Medicare & Medicaid Services (CMS) to clarify relevant portions of the existing Medicare Benefit Policy Manual—which actually do not require improvement as a condition of coverage—and roll out new educational materials aimed at correcting long-standing, widespread misconceptions about the Improvement Standard. CMS has until January 2014 to comply with this order.

Still, despite posting a two-page fact sheet about the case on their website in April, CMS has a ways to go when it comes to spreading the word about this important court decision. Many providers remain completely unaware of this case or the resulting settlement and continue to treat—or not treat—with the false belief that Medicare will not cover services if patients do not demonstrate improvement.

To help bring you up to speed, we’ve compiled the following list of important information regarding the settlement:

  • This ruling did not result in any new regulations, but rather a detailed clarification of existing standards. According to the written settlement: “Nothing in this Settlement Agreement modifies, contracts, or expands the existing eligibility requirements for receiving Medicare coverage...”
  • The settlement went into effect immediately for both Medicare proper and Medicare Advantage plans.
  • Medicare coverage for outpatient physical, occupational, and speech therapy services does not depend on a patient’s “potential for improvement from the therapy but rather on the beneficiary’s need for skilled care.” (Tweet this!)
  • Medicare covers skilled care—including therapy—that takes place in a patient’s home as long as the patient is homebound (although not necessarily confined to bed).
  • Medicare covers skilled therapy services—including home health services, outpatient therapy services, and services provided within a skilled nursing facility—if the services are “necessary to maintain the patient’s current condition or prevent or slow further deterioration.”
  • Medicare will reimburse therapists for “the establishment or design of a maintenance program,” “the instruction of the beneficiary or appropriate caregiver,” and the “necessary periodic reevaluations...of the beneficiary and maintenance program.”
  • Even if nursing home residents do not qualify for Medicare coverage of their stay in the facility, Medicare still may cover rehab therapy services for residents who meet the requirements for outpatient therapy. (Tweet this!)
  • The coverage standards clarified in this ruling do not apply to therapy services provided in inpatient rehabilitation facilities (IRFs) or comprehensive outpatient rehabilitation facilities (CORFs).
  • A special review process is in the works to reimburse patients whose claims Medicare denied due to lack of improvement after the lawsuit was filed on January 18, 2011.

Remember, the key to ensuring patients take full advantage of their Medicare benefits is making sure everyone clearly understands the policy for coverage. Now that you’re in the know, share this post with fellow therapists, patients, or anyone else who might be affected by the settlement.

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