The “Improvement Standard” and Medicare Skilled Nursing and Therapy

By J. Gregory Wallace
March, 2014

In January 2013, a federal judge approved a settlement to end Medicare’s longstanding practice of requiring beneficiaries to show a likelihood of improvement in order to receive coverage of skilled care and therapy services for chronic conditions. The case was Jimmo v. Sebelius and was out of Vermont. Although not based in either statute or regulations, the “urban myth” that improvement is required for coverage is widely believed and staunchly followed.

As part of the settlement, the Centers for Medicare and Medicaid Services (CMS) revised its Medicare benefit policy manuals. See CMS Pub. 100-02, Transmittal 179, dated January 14, 2014. A Program Manual Clarifications Fact Sheet issued by CMS explains that

coverage of skilled nursing and skilled therapy services in the skilled nursing facility (SNF),
home health (HH), and outpatient therapy (OPT) settings “… does not turn on the presence or absence of a beneficiary’s potential for improvement, but rather on the beneficiary’s need for skilled care.” Skilled care may be necessary to improve a patient’s current condition, to maintain the patient’s current condition, or to prevent or slow further deterioration of the patient’s condition.

Nothing in the Settlement Agreement is said to modify, contract or expand the existing eligibility requirements for receiving Medicare coverage. Rather the intent is to clarify Medicare’s “longstanding policy” that when skilled services are required in order to provide care that is reasonable and necessary to prevent or slow further deterioration, coverage cannot be denied based on the absence of potential for improvement or restoration.

Therefore, no “improvement standard” is to be applied in determining Medicare coverage for maintenance claims in which skilled care is required. This will likely require careful coding by the providers to document accurate coverage for claims involving skilled care. Documentation will need to justify the necessity of the skilled services provided, including objective evidence or a clinically supportable statement of expectation that:

– In the case of rehabilitative therapy, the patient’s condition has the potential to improve or is improving in response to therapy; maximum improvement is yet to be attained; and, there is an expectation that the anticipated improvement is attainable in a reasonable and generally predictable period of time.

– In the case of maintenance therapy, the skills of a therapist are necessary to maintain, prevent, or slow further deterioration of the patient’s functional status, and the services cannot be safely and effectively carried out by the patient personally, or with the assistance of non-therapists, including unskilled caregivers.

The language of denials may change and we may not see decisions in writing declaring that the patient is not improving. Judith Stein of the Center for Medicare Advocacy says, “if you hear from the provider that the person wasn’t improving, but then the written decision is that it wasn’t skilled care [that was needed], put two and two together.” And do not hesitate to appeal a denial of skilled services to the Carolinas Center for Medical Excellence at 800-228-3365.