Settlement Proposed to Broaden Medicare Coverage

Sick and disabled Americans who rely on Medicare may gain new access to care with the proposed settlement of a lawsuit that challenged the government's practice of denying some coverage to patients whose condition was not improving.
by | October 25, 2012

Sick and disabled Americans who rely on Medicare may gain new access to care with the proposed settlement of a lawsuit that challenged the government's practice of denying some coverage to patients whose condition was not improving.

Under the terms of the settlement _ expected to be approved by a federal judge in Vermont in coming months _ Medicare would not deny skilled nursing care and various forms of therapy for beneficiaries, regardless of their prognosis.

Medicare is required by law to cover health care services that are "reasonable and necessary for the diagnosis or treatment of illness or injury." But the 47-year-old program does not cover what is called custodial care, including much nursing home care, delivered by nonskilled aides who perform services such as helping seniors get dressed or feed themselves.

In practice, Medicare has also at times denied coverage for skilled care for beneficiaries whose condition was not considered likely to improve under what came to be known as the "improvement standard." Under this standard, someone on Medicare with multiple sclerosis or Parkinson's disease, for example, might have been denied coverage for physical therapy that could help keep them stable or prevent declines in their health.

"These individuals have been denied Medicare coverage and access to medically necessary care for decades," said Judith Stein, executive director of the Center for Medicare Advocacy, which represented plaintiffs in the case. "We have finally been able to eliminate this illegal, harmful, unfair application of the law."

The lead plaintiff, 76-year-old Glenda Jimmo, has been blind since she was 19 and uses a wheelchair because of a below-the-knee amputation. She was denied coverage for skilled nursing services in her home because she was deemed unlikely to improve.

It is unclear how many Medicare beneficiaries were affected by the improvement standard.

Patient advocates said they could not determine that, in part because health care providers often told beneficiaries that certain services would not be covered, so claims were never filed.

Health and Human Services Department spokeswoman Erin Shields Britt said the impact would be minimal. "This settlement clarifies existing Medicare policy," she said in a statement. "We expect no changes in access to services or costs."

But advocates said they believed tens of thousands, even hundreds of thousands, of Medicare beneficiaries had probably been denied care over the years, despite efforts to change the standard.

Rep. Joe Courtney, D-Conn., who led an unsuccessful push in Congress to overturn the improvement standard, called the proposed legal settlement "a milestone moment."

The deal, first reported by The New York Times, would put an end to the improvement standard, which was never written into law but had been included in the Medicare benefit manual.

The Health and Human Services Department agreed to revise the manual to make it clear that skilled nursing care and therapy will be covered at home, in an outpatient clinic or in a nursing home. The department also promised to undertake a nationwide educational campaign to make the benefits known to medical providers and beneficiaries.

An uptick in claims could add costs at a time when federal policymakers are struggling to restrain Medicare expenses.

But Stein and plaintiffs in the lawsuit, Jimmo v. Sebelius, emphasized that more skilled nursing care and therapy at home or in a nursing home could help prevent hospitalizations, which are typically much more expensive.

"We know that people go without this care when they can't get it covered by Medicare," Stein said.

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