Medicare Settlement Clarifies Coverage of Services That Maintain Function

(February 15, 2013)

Medicare will be prohibited from denying skilled therapy in most settings simply because there is a lack of functional progress. A settlement agreed to by the Centers for Medicare and Medicaid Services (CMS) in October 2012, related to the elimination of the "Medicare Improvement Standard," was approved by a federal judge on January 24, 2013. By January 2014, CMS must revise its policy manuals to allow coverage of therapy services that prevent deterioration. These services must require skilled care (i.e., the specialized knowledge and judgment of a qualified therapist) although coverage is not dependent on the potential for improvement from therapy. This is a major expansion of Medicare coverage because, prior to this change, significant functional progress was a basis for coverage. The settlement specifies outpatient services as well as skilled nursing facility, home health, and inpatient rehabilitation facility services.

Experts expect that the resulting increased services to chronic disease patients (e.g., Parkinson's, ALS) will decrease Medicare expenditures by reducing inpatient hospitalization and the need for other costly health care services.

Additional Information

The settlement does not affect the therapy cap; therefore, the annual limit and the exceptions process will continue to apply to all covered services.

The settlement allows the "re-review" of claims that were denied for services without significant functional progress after January 17, 2011. The stipulations for re-review are as follows.

  • The patient must seek the services on their own behalf—it excludes providers or suppliers from requesting the re-review.
  • Other third-party payers (excluding Medicaid) should not have paid.
  • The denial must be based on the maintenance standards and independent of any other reasons for denial.

For prior services, ASHA recommends that if a patient feels he or she wishes to pursue re-review, the SLP may need to supply the patient with documentation that indicates medically necessary services were rendered. The provider cannot request the re-review.

The settlement also applies to Medicare Advantage plans—private insurers that contract with practitioners to manage Medicare benefits. This Medicare revision will likely have a ripple effect across some state Medicaid programs and could impact private insurance coverage decisions as well.

The 31-page settlement agreement is posted on the Center for Medicare Advocacy, Inc. website [PDF].

Preparation for Implementation

ASHA is in the process of developing clinical examples that differentiate skilled from nonskilled maintenance services. These will be submitted to CMS to assist in the development of policy manual revisions. ASHA, jointly with the other professional associations, is also communicating with CMS and relevant consumer advocacy groups to schedule future meetings to discuss implementation issues and policy manual changes. The final manual revisions are required by January 2014.

ASHA Resource

For more information, please contact Mark Kander, ASHA's director of health care regulatory analysis, by e-mail at [email protected].

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