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Attorneys from the Center for Medicare Advocacy, Vermont Legal Aid and the Centers for Medicare & Medicaid Services (CMS) have agreed to settle the "Improvement Standard" case, Jimmo v. Sebelius, No. 11-cv-17 (D.VT), filed January 18, 2011.  A proposed settlement agreement was filed in federal District Court on October 16, 2012.  When the judge approves the proposed agreement, a process that may take several months, CMS will revise the Medicare Benefit Policy Manual and other Medicare Manuals to correct suggestions that Medicare coverage is dependent on a beneficiary "improving." New policy provisions will state that skilled nursing and therapy services necessary to maintain a person's condition can be covered by Medicare.

CMS will then undertake a comprehensive nationwide Educational Campaign to inform health care providers, Medicare contractors, and Medicare adjudicators  that they should not limit Medicare coverage only to beneficiaries who have the potential for improvement.  Instead, providers, contractors, and adjudicators must recognize "maintenance" coverage and make decisions based on whether a beneficiary needs skilled care that must be performed or supervised by a professional nurse or therapist.  Jimmo will be certified as a nationwide class.

As advocates, beneficiaries, and their families have long known, the Improvement Standard has harmed thousands of older and disabled Medicare beneficiaries who need skilled care to maintain their conditions.  Among those most affected are those with chronic conditions.  The effects of the Improvement Standard on beneficiaries with chronic conditions is underscored by the organizations that joined individual Medicare beneficiaries in challenging the Improvement Standard – the National Multiple Sclerosis Society, Parkinson's Action Network, Paralyzed Veterans of America, the Alzheimer's Association, United Cerebral Palsy, and the National Committee to Preserve Social Security and Medicare.

In an October 24, 2012 editorial, "A Humane Medicare Rule Change,"[3] The New York Times recognized the proposed settlement as reversing an "irrational and unfair approach to medical services" that developed "over decades because of Medicare's fragmented and loosely administered process for handling beneficiary claims."  The editorial praised the settlement as "clearly the humane thing to do for desperately sick people with little hope of recovery."

An important point, also identified by The New York Times, is that significant cost savings could result from applying the corrected coverage standard.  When Medicare beneficiaries receive medically necessary nursing and therapy services that enable them to maintain their functioning or prevent or slow their decline, many will be able to stay their homes and avoid expensive hospitalization and nursing home care.  

A key current public health initiative – reducing avoidable hospitalizations and rehospitalizations – is based on evidence that avoidable hospitalizations not only often result in poor outcomes for patients but also are enormously expensive for the Medicare program.  Under the Improvement Standard, beneficiaries were able to obtain care and treatment under the Medicare program only after their health deteriorated, often to the point of rehospitalization.  By preventing the inappropriate denial or premature discontinuation of Medicare coverage for beneficiaries, the Jimmo settlement should lead to smarter, and potentially less expensive, health care for many people and relief for their families.

What Can Beneficiaries Expect Now?

As CMS recognizes, the settlement does not change the underlying law and regulations governing the Medicare program.  Accordingly, since the underlying Medicare law is not changed, health care providers should implement the maintenance standard now

Patients should discuss with their health care providers the Medicare maintenance standard and whether it is applicable to them.  Health care providers should apply the maintenance standard and provide medically necessary nursing services or therapy services, or both, to patients who need them to maintain their function, or prevent or slow their decline.  Under the maintenance standard articulated in the settlement, the important issue is whether the skilled services of a health care professional are needed, not whether the Medicare beneficiary will "improve."

What Can Beneficiaries Do If They Were Denied Care Under the Improvement Standard?

The Jimmo settlement also establishes a process of "re-review" for Medicare beneficiaries who received a denial of skilled nursing facility care, home health care, or out-patient therapy services (physical therapy, occupational therapy, or speech therapy) that became final and non-appealable after January 18, 2011 because of the Improvement Standard.  Shortly after the federal district court approves the settlement, CMS will announce how beneficiaries can invoke the re-review process.  As more information becomes available, the Center for Medicare Advocacy will post information on its website.

Winning this historic class action lawsuit is just the beginning.
We need your support now to ensure the settlement is effectively implemented and communicated, ensuring full and fair access to Medicare and necessary health care for older and disabled Americans.
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