April 1, 2013 Departments

Policy Analysis: Medicare Must Cover Services That Maintain Function

Policy Analysis

Medicare must cover services that prevent deterioration and maintain functional levels—not just those that result in functional progress—according to a settlement recently accepted by a federal judge.

Under the change, Medicare may not deny speech-language pathology services (and occupational and physical therapy) simply because the beneficiary shows no functional progress.

This change represents a major expansion of Medicare coverage, which has long defined "reasonable and necessary"—a criterion for coverage—to include the expectation that the patient's condition will improve significantly in a reasonable period of time.

This settlement will likely have a ripple effect across some state Medicaid programs and also could affect private insurance coverage decisions. Experts anticipate that the resulting increased services to patients with chronic diseases—such as Parkinson's or multiple sclerosis—will decrease Medicare expenditures by reducing inpatient hospitalization and the need for other costly health care services.

The settlement of Jimmo v. Sebelius, approved in late January, requires the Centers for Medicare and Medicaid Services to revise its policy manuals by January 2014 to reflect the elimination of the "Medicare Improvement Standard," which requires patients to show functional progress to continue to receive rehabilitation services. The services must require skilled care.

The settlement specifies that outpatient services are covered, as are those provided in skilled nursing facilities and inpatient rehabilitation facilities and by home health agencies. The settlement also applies to Medicare Advantage plans, which are private insurers that contract with practitioners to manage Medicare benefits.

This clarified scope of coverage is also expected to apply to accountable care organizations, but CMS has not yet issued this guidance.

It's unclear whether nonfunctional progress therapy minutes for Medicare Part A patients in skilled nursing facilities will count toward their total therapy minutes, and thus their rehabilitation status, for billing purposes.

The original case involved plaintiff Glenda Jimmo, a 71-year-old Vermont resident who had a below-the-knee amputation and suffered from a number of other chronic conditions. The suit was initiated by five plaintiff organizations—the Parkinson's Action Network, Paralyzed Veterans of America, National Multiple Sclerosis Society, National Committee to Preserve Social Security and Medicare, and American Academy of Physical Medicine and Rehabilitation—that were joined by five plaintiff Medicare patients. The Center for Medicare Advocacy and co-counsel Vermont Legal Aid filed the class-action lawsuit against the U.S. Department of Health and Human Services in January 2011.

Re-review of claims

The settlement allows the "re-review" of therapy services claims denied for lack of significant functional progress after Jan. 17, 2011. Several conditions, however, apply:

  • The patient must seek the re-review on his or her own behalf; providers and suppliers may not request it.
  • The claims should not have been paid by other third-party payers (excluding Medicaid).
  • The original denial must have been based solely on the maintenance standards and have been independent of any other reasons for denial.

Patients pursuing re-review may need documentation from providers, including speech-language pathologists, that indicates medically necessary services were rendered.

ASHA warns that despite beneficiaries' and advocates' pressure on providers to seek coverage immediately for maintenance therapies, such claims should be submitted with great caution. These claims will be difficult to adjudicate until CMS provides guidance on implementation.

Preparing for implementation

ASHA and other professional therapy associations are scheduling meetings with CMS and relevant consumer advocacy groups to discuss implementation issues and policy manual changes. ASHA, for example, is developing clinical examples that differentiate skilled maintenance services (covered) from nonskilled maintenance services (not covered), and will submit the scenarios to CMS.

Although the deadline for revisions is January 2014, CMS reportedly plans to complete the updates by July 2013. Under the settlement, CMS must distribute educational materials to Medicare administrative contractors, Advantage organizations, providers and suppliers, recovery audit contractors, and administrative law judges. The plaintiff's counsel will have 21 days to review and provide written comments on the manual and educational materials and may request to review subsequent changes; the settlement requires CMS to make a good faith effort to use the plaintiff's reasonable recommendations for coverage standards.

After the manual is revised, CMS must conduct a variety of educational sessions, including open-door forums and national calls, to explain and clarify the changes.

The Leader will provide clarification as information becomes available. Read the 31-page settlement agreement [PDF].

Mark Kander, is ASHA director of health care regulatory analysis. mkander@asha.org

cite as: Kander, M. (2013, April 01). Policy Analysis: Medicare Must Cover Services That Maintain Function. The ASHA Leader.


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