The Jimmo Effect
By Alan Polack
Medicare Part A provides limited coverage for a stay in a licensed nursing home for patients discharged from a hospital.
The coverage is limited to skilled nursing care, usually some kind of therapy required by the patient post-hospitalization.
Medicare pays 100 percent of the first 20 days of such skilled care and partial payment for up to an additional 80 days for a total of 100 days.
In 2013, the Medicare co-payment for the 21st through the 100th day is $148 per day.
There is a long-standing myth that Medicare coverage is not available for beneficiaries who have an underlying condition from which they will not improve.
The Medicare Act states that no payment will be made except for items and services that are “reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member.” 42 USC Section 1395 y(a)(1)(A).
This language does not limit Medicare coverage only to services, diagnosis or treatments that will improve illness or injury.
Unfortunately, beneficiaries are often denied coverage on the grounds that they are not likely to improve or are stable or chronic or require maintenance services only.
These are not legitimate reasons for Medicare denials.
Medicare recognizes that skilled care can be required to maintain an individual’s condition or functioning or to slow or prevent deterioration [42 CFR Section 409.32(c)] including physical therapy to maintain the individual’s condition or function [42 CFR Section 409.33(c)(5)].
In January 2011, the Center for Medicare Advocacy, along with its co-counsel Vermont Legal Aid, filed an action in the U.S. District Court for the District of Vermont [Jimmo v Sebelius, 11 CV-17 (D. VT)] to decide the issue of whether the so-called “improvement standard” which operates as a rule of thumb to terminate or deny Medicare coverage to beneficiaries who are not improving, violates substantive and procedural requirements of the Medicare statute.
The Secretary of Health and Human Services (HHS) filed a motion to dismiss on various grounds.
The court denied the motion and HHS filed an answer.
The proceedings were stayed while the parties entered into settlement discussions.
On Oct. 16, 2012, the parties filed a proposed settlement agreement with the district court. That settlement agreement was approved on Jan. 24, 2013.
The court retained jurisdiction to enforce the agreement in the future as requested by both parties.
Now that the settlement has been officially approved, the Centers for Medicare and Medicaid Services (CMS) must revise relevant portions of the Medicare Benefit Policy Manual to eliminate any suggestion that a beneficiary must show a potential for improvement, with the need for skilled care being the determinative factor.
CMS must also engage in a nationwide educational campaign to communicate the corrected maintenance coverage standards to providers, contractors and adjudicators.
CMS must also do random samplings of qualified independent contractor decisions (i.e., nursing homes) to determine if the corrected policy is being applied.
The new rules, policies, guidelines and instructions to insure that Medicare coverage is available for skilled maintenance services applies to home health, nursing home and outpatient settings.
The bottom line is that skilled nursing providers under the Medicare Part A nursing home coverage cannot terminate therapy and Medicare coverage by asserting that the patient is “not making progress” or “is not improving.”
In the future, this should be known as the Jimmo effect.
It should result in substantial additional days of skilled care covered by Medicare in the nursing home setting.
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Alan F. Polack is a Shelby Township attorney who formerly served as president of the Macomb County Probate Bar Association.
