Jimmo Lawsuit Update


 On December 6, 2013, in accordance with the Jimmo v. Sebelius Settlement Agreement, the Centers for Medicare & Medicaid Services (CMS) has revised portions of the relevant chapters of the Medicare Benefit Policy program manual used by Medicare contractors to clarify that coverage of skilled nursing and skilled therapy services 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.  The changes will take effect on January 7, 2014.

The Jimmo v. Sebelius Settlement Agreement was approved on January 24, 2013 by the U.S. District Court for the District of Vermont.  In Jimmo, the Center for Medicare Advocacy (CMA) alleged that Medicare claims involving skilled care were being inappropriately denied by contractors based on a rule of thumb “improvement standard,” under which a claim would be summarily denied due to a beneficiary’s lack of restoration potential even though the beneficiary did in fact require a covered level of skilled care in order to prevent or slow deterioration in his or her clinical condition.  CMS last April posted a Fact Sheet on the settlement agreement.

As stated in the December 6, 2013 CMS Manual Update, the following are some significant aspects of the manual clarifications:

§  No “Improvement Standard” is to be applied in determining Medicare coverage for maintenance claims that require skilled care.  Medicare has long recognized that even in situations where no improvement is possible, skilled care may nevertheless be needed for maintenance purposes (i.e., to prevent or slow a decline in condition).  The Medicare statute and regulations have never supported the imposition of an “Improvement Standard” rule-of-thumb in determining whether skilled care is required to prevent or slow deterioration in a patient’s condition.  Thus, such coverage depends not on the beneficiary’s restoration potential, but on whether skilled care is required, along with the underlying reasonableness and necessity of the services themselves.  The manual revisions now being issued will serve to reflect and articulate this basic principle more clearly.

§  Enhanced guidance on appropriate documentation.  Portions of the revised manual provisions now include additional material on the role of appropriate documentation in facilitating accurate coverage determinations for claims involving skilled care.  While the presence of appropriate documentation is not, in and of itself, an element of the definition of a “skilled” service, such documentation serves as the means by which a provider would be able to establish and a Medicare contractor would be able to confirm that skilled care is, in fact, needed and received in a given case.  Thus, though the Jimmo settlement does not explicitly reference documentation requirements, CMS has nevertheless decided to use this opportunity to introduce additional guidance in this area, both generally and as it relates to particular clinical scenarios.  An example of this material appears in new section of the revised chapter 8, in the guidelines for SNF coverage under Part A.

The Settlement Agreement.  The Jimmo v. Sebelius settlement agreement itself includes language specifying that “Nothing in this Settlement Agreement modifies, contracts, or expands 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.  By contrast, coverage in this context would not be available in a situation where the beneficiary’s maintenance care needs can be addressed safely and effectively through the use of nonskilled personnel.  As such, the revised manual material now being issued does not represent an expansion of coverage, but rather, provides clarifications that are intended to help ensure that claims are adjudicated accurately and appropriately in accordance with the existing policy.