Imagine a loved one is depending on Medicare to cover their rehabilitation, but then Medicare suddenly decides to discontinue coverage because your loved one does not show any signs of improvement. Where do you go from there? How do you pay for the continued rehabilitation that is needed? This was a problem that many clients faced in the past, but there is good news on the horizon.

On October 16, 2012 a proposed settlement agreement was filed in federal District Court for the “Improvement Standard” case, Jimmo v. Sebelius. The new Medicare policy will state that Medicare can cover skilled nursing and therapy necessary to maintain a patient’s condition. Previously, Medicare only covered these services if they were anticipated to improve the patient’s current condition. There was no Medicare statute or regulation that directly stated that proof of patient improvement was needed to continue services. However, home health care agencies and nursing homes contracting with Medicare often terminated the services of those who did not seem to be improving. Part of the settlement requires Medicare to revise its manual to unambiguously state that their coverage “does not turn on the presence or absence of an individual’s potential for improvement.”

Chief Justice Christina Reiss of the District of Vermont signed an order preliminarily approving the proposed settlement on November 20, 2012. A Fairness Hearing will be held on January 24, 2013 “to determine whether the settlement agreement is fair, reasonable and adequate,” and then the Judge will decide whether or not to permanently approve the agreement.

The Center for Medicare Advocacy states that, “As CMS recognizes, the settlement does not change the underlying law and regulations governing the Medicare program. Accordingly, since the underlying Medicare law is not changed, health care providers should implement the maintenance standard now.” They advise that patients should speak with their health care providers to determine whether or not the Maintenance Standard is applicable to them. For those who were previously denied care under the Improvement Standard, there will be a process of “re-review.” The guidelines for this will be announced when the federal district court officially approves the settlement.