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Medicare Coverage Expanded for Nursing Home Therapy – Keystone Elder Law – Mechanicsburg, PA

Last April, we told you that settlement of a federal law suit would increase the amount of days of care for which an older person could expect to receive Medicare payment for therapy provided in a skilled nursing facility.  Now, nearly a year after the January 2013 settlement of Jimmo v Sebelius, provision of maintenance therapy is more clearly allowed as a service Medicare will pay for in nursing homes.

 According to statements by the U.S. Health and Human Services Secretary Kathleen Sebelius at the time of last year’s Jimmo settlement, improvement during therapy has never been necessary to receive Medicare payment for therapy.   Part of the Jimmo settlement was a promise that the Centers for Medicare & Medicaid Services (CMS) would clarify their written policy.   On December 13, CMS published revisions to the Medicare Benefit Policy Manual which become effective January 7, 2014. 

 The CMS written standards now clarify that maintenance, not improvement, can be enough to justify Medicare payment.  Section 20.1.2 of the CMS manual now states:  “Coverage of skilled nursing care or therapy to perform a maintenance program does not turn on the presence or absence of a patient’s potential for improvement from the nursing care or therapy, but rather on the patient’s need for skilled care.”  This means that many older persons who have been discharged from a hospital to a nursing home should expect to get more days of Medicare coverage than before this clarification was made. Typically a minimum of 20 and a maximum of 100 days of Medicare coverage in a nursing home are available.

CMS has basic requirements for a getting Medicare in a nursing home, beginning with the need for a doctor’s order and facility’s certification.  The patient generally must be admitted to the nursing home within thirty days, following having spent three midnights being admitted in a hospital. Finally, the CMS handbook lists eight examples of direct skilled nursing services that the patient must be receiving which, as a practical matter, are only be available in a nursing home on an inpatient basis.

Despite Secretary Sebelius’s statements last year, Medicare recipients, and especially those with Medicare Advantage or Part C type of coverage, until now have been denied Medicare coverage for ongoing rehabilitation once improvement cannot be documented.    Private insurance companies manage the payment of Medicare Advantage or Part C Medicare claims.   Because Medicare payment for the provided care has been denied by insurance companies, nursing homes have been reluctant to continue providing therapy with no assurance of payment being available for services.

There is a process for a patient to appeal what is thought to be a wrongful denial of a Medicare claim.   Written instructions for appeal are provided by the nursing home at the time that Medicare coverage is denied.   The initial appeal is made immediately by phone to a Quality Improvement Organization, which most Medicare recipients have heard reference to as a “QIO.” 

Further appeal of an initial telephone denial can be made in writing to the QIO and, ultimately, to an Administrative Law Judge.  Appealing the denial of Medicare coverage past the initial QIO stage can be time consuming and expensive.  Appeals rarely have been pursued since there is little to recover from an insurance company or QIO for denying a claim wrongly since usually a patient will choose to discontinue therapy services when the telephone appeal fails, rather than to pay privately. 

It is tempting to see the insurance companies in the role of villains because of their ongoing denial of Medicare coverage for claims that Secretary Sebelius said should have been covered according to federal policy.  But the Medicare reimbursement system is complicated, and it is probably unfair to make the insurance companies the lonely scapegoat.    As nursing homes become aware of the new CMS standards, there should be more claims submitted for maintenance therapy.  Families who advocate for the care of their loved ones need to have higher expectations and be prepared to use the new language of the CMS policy manual to appeal therapy claims which seem to have been wrongfully denied.

By Dave Nesbit, Attorney