Home health care and therapy agencies frequently apply an illegal “improvement standard” to deny service to Medicare patients with conditions deemed stable or not improving, according to a class action filed recently against the federal government, which usually affirms the denials. (Jimmo v. Sebelius, No. 5:11-cv-00017 (D. Vt. filed Jan. 13, 2011).)
Medicare regulations allow coverage for health care and therapy services that are “reasonable and necessary for the diagnosis or treatment of illness or injury,” with no requirement of improvement. The regulation governing skilled nursing facilities also specifies that the “restoration potential of a patient” is not a deciding factor in whether the service is covered, and coverage is allowed to prevent deterioration, even if improvement is not possible.
Nevertheless, the plaintiffs—five Medicare patients who were denied care and five patient advocacy organizations, led by the Center for Medicare Advocacy, Inc. (CMA)—claim that private contractors routinely use the so-called improvement standard to deny coverage. They say the contractors illegally refuse to accept Medicare patients if their conditions are stable, chronic, not improving, or involve “maintenance only” services, telling the patients that coverage is barred by Medicare regulations.
Rather than crack down on the practice, federal administrative law judges and appeals councils almost always agree with the contractors, the plaintiffs’ complaint says, calling the application of the standard a “clandestine policy that is condoned and implemented” by the Department of Health and Human Services (HHS).
For instance, the government approved denial of services for plaintiff KR, a 48-year-old woman suffering from congenital quadriplegia, epilepsy, depression, and mental retardation, even though her physician had certified her for physical therapy. The contractor found that KR hadn’t suffered an exacerbation of her chronic condition, and an administrative law judge agreed that she wasn’t covered because she was not likely to improve.
The CMA says most patients don’t realize they have been wronged and simply stop receiving the services. “If you don’t have an advocate, you assume the contractor is stating the law properly,” said Gill Deford, director of CMA’s litigation department.
Deford notes that to challenge a Medicare denial, patients must first pay for the treatment and then seek reimbursement, a process many Medicare patients can’t afford.
The lawsuit was filed after the Centers for Medicare & Medicaid Services—the division of HHS that enforces the regulations—ignored a May 2010 letter from 16 members of Congress, urging the agency to ban the practice. The plaintiffs seek an injunction prohibiting the HHS from applying the improvement standard and an order requiring the agency to review all adverse decisions, revise any rules or guidelines that support the standard, and monitor the contractors.