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POLICY WATCH: In Lawsuit Settlement, Medicare Clarifies Coverage for Skilled Nursing Care

Shaw, Gina

doi: 10.1097/01.NT.0000424087.81920.a0


A proposed settlement to a nationwide class-action lawsuit may offer many patients with chronic neurologic conditions the opportunity to obtain Medicare coverage for skilled nursing and therapy services — which can often cost many thousands of dollars over the course of a patient's lifetime.

If approved by a judge as it is expected to be, the settlement in the suit — Jimmo v. Sebelius — will add language to the Medicare manual that makes clear that such coverage “does not turn on the presence or absence of an individual's potential for improvement,” but is instead based on the patient's need for the care. The new language will apply to traditional Medicare as well as Medicare Advantage programs.

In the past, Medicare coverage for home health care, skilled nursing home stays, and outpatient therapies has generally been contingent on the patient's expectation of improvement — a practice known as the “improvement standard.” Many people with chronic illnesses who are in need of such services, including those with progressive neurologic conditions such as Alzheimer's disease, Parkinson's disease, multiple sclerosis, and many others, obviously cannot be expected to improve over time.

The patients in the suit were represented by the nonprofit Center for Medicare Advocacy; a group of organizational plaintiffs included the Alzheimer's Association, the National Multiple Sclerosis Society, the Paralyzed Veterans of America, and the Parkinson's Action Network.



Medicare officials have denied that there has ever been a formal policy in place requiring that patients demonstrate that their conditions could improve in order to obtain coverage, but most neurologists know that this has been the case in practice.

Bruce A. Cohen, MD, professor of neurology at the Northwestern University Feinberg School of Medicine, treats relatively few Medicare patients, but said that his patients' private insurers have followed Medicare's lead on this policy as they generally do on others. “Every day, there's yet another file on my desk for a patient who has been denied rehabilitation and therapy services because their condition is not likely to improve,” he said.

“A lot of our patients have been denied care in skilled nursing facilities because the interpretation was that you needed to show there would be a significant improvement,” said Dawn Eliashiv, MD, a professor of neurology at David Geffen School of Medicine at the University of California, Los Angeles. She added that, because of the cost of such care and many patients' limited resources, denial of Medicare coverage has often meant denial of care entirely.

As an example, Dr. Cohen described a typical patient of his with a left hemiparetic brain tumor, which had been effectively treated so that the patient would not die of the disease. “He came in saying that his gait had gotten worse this year, and he's losing function in his arm,” he said. “I asked if he's been doing the stretching exercises that the physical therapist prescribed, and he said not really. So I sent him back to the physical therapist [PT] and after ten sessions he's made a functional recovery. He can't get coverage to see the PT even for maintenance anymore, because he's returned to maximum baseline and no further improvements are expected. You could argue that the patient has to take the responsibility to do the exercises himself, but what if it's a 75-year-old man who lives with his wife who is elderly and fragile herself, and they can't do the physical therapy without supervision?”

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On the surface, Dr. Cohen said, the Jimmo v. Sebelius settlement is great news for many patients with chronic and progressive neurologic conditions — and for the neurologists who have spent so much time appealing coverage denials. “But the devil is in the details,” he added.

The big question: who's going to pay for all this new coverage? The Department of Health and Human Services, when asked for a comment, responded, “Under this proposed settlement, Medicare policy would be clarified so that claims from providers will be reimbursed consistently and appropriately. Because this proposed settlement would clarify existing policy, we do not expect changes in cost relative to what has been projected.”

But most people in the field know that “existing policy” has not actually existed, and plenty of claims that would be covered under the clarified language have been denied. “Medicare doesn't have a bigger budget next year than it had this year,” Dr. Cohen observed. “No one has an estimate of how many millions of dollars this will involve, but all the dollars given over to this benefit will have to come out of someone else's pot.”

It's been suggested that coverage of skilled nursing care and outpatient therapies may save money in some cases, by keeping patients from deteriorating and preventing (or at least delaying or shortening) acute-care hospital stays. “Not providing adequate care for these patients increases the amount of time patients spend in hospitals, which increases acute care costs,” said Dr. Eliashiv.

As evidence for the potential savings, the Center for Medicare Advocacy points to the Veterans Affairs program, in which primary care teams are deployed to assist the highest cost patients — those with multiple chronic diseases — in their homes. With an average daily census of more than 27,000 patients in more than 250 locations, the program has reduced hospitalizations by over 60 percent and nursing home use by over 80 percent.

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Another “detail” that is still unclear has to do with some of the specific language in the proposed settlement. “It says that if the services can be managed by an unskilled worker, including the patient or a family member, then that's how it may need to be managed,” Dr. Cohen pointed out. That, he said, may suggest that some physical therapy services, such as stretching exercises for post-stroke patients with muscle contractures, will not be covered if an “unskilled” person can be given the duty.

“Even if you interpret the language broadly, there still will be limitations as far as number of days,” added Dr. Eliashiv. (Medicare will only cover 100 days of care in a skilled nursing home per benefit period; that does not change with the settlement.) “This settlement doesn't solve everything for patients who need years of ongoing coverage, but it's still a great step forward and means that we will see a much better continuum of care between the inpatient and outpatient setting.”

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