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In January 2011, the Center for Medicare Advocacy and Vermont Legal Aid filed a lawsuit in the District Court of Vermont challenging Medicare’s “Improvement Standard.” Jimmo v. Sebelius No. 11-cv-17 (D.Vt., filed 1/18/11). This case argues that the "Improvement Standard", which operates as a rule of thumb to terminate or deny Medicare coverage to beneficiaries who are not improving, violates substantive and procedural requirements of the Medicare statute, the Administrative Procedure Act, the Freedom of Information Act, and the Due Process Clause of the Fifth Amendment.

The Center for Medicare Advocacy, along with its co-counsel Vermont Legal Aid are pleased that the Settlement in the Medicare Improvement Standard case, Jimmo v. Sebeliuswas approved on January 24, 2013 during a scheduled fairness hearing, marking a critical step forward for thousands of beneficiaries nationwide.

With the settlement now officially approved, the Centers for Medicare & Medicaid Services (CMS) is tasked with revising its Medicare Benefit Policy Manual and numerous other policies, guidelines and instructions to ensure that Medicare coverage is available for skilled maintenance services in the home health, nursing home and outpatient settings.  CMS must also develop and implement a nationwide education campaign for all who make Medicare determinations to ensure that beneficiaries with chronic conditions are not denied coverage for critical services because their underlying conditions will not improve.

It is important to note that the Settlement Agreement standards for Medicare coverage of skilled maintenance services apply now – while CMS works on policy revisions and its education campaign. The Center is hearing from beneficiaries who are still being denied Medicare coverage based on an Improvement Standard, but coverage should be available now for people who need skilled maintenance care and meet any other qualifying Medicare criteria.


  • CMS Is to Establish a New Website For Medicare Secondary Payer Claims Information.

On January 10, 2013, President Obama signed Medicare legislation to establish a website for providing information to beneficiaries about their Medicare Secondary Payer (MSP) obligations.[1]  Under the MSP program, if the Medicare agency makes a conditional payment for Medicare-covered services for which a third party is liable, barring certain exceptions, Medicare expects to be reimbursed.[2]

Regulations to implement the new website are to be published in final form not later than 9 months form the date of enactment of the initiating clause of the legislation.[3] Under the new law, the Secretary must create a website through which final conditional payment amount information can be obtained by beneficiaries. To compile the necessary information, the beneficiary is to notify the Secretary, through the website, at any time beginning 120 days before the reasonably expected date of a settlement, judgment, or award, etc.  The information is also to be made available to a beneficiary’s authorized family member or other representatives, or to a plan with the consent of the beneficiary. In addition, the website is to provide a method for the receipt of secure electronic communications, including an official time and date that the information is transmitted. Within 18 months of enacting the provision, the Secretary is to modify the reporting requirements on the use of Social Security numbers and other identifying information in reporting MSP information (with the possibility of a 1 year extension). In addition, a plan is permitted but not required to access or report to the Secretary social security account numbers or health identification claim numbers of individuals.

Beginning in 2014, not later than November 15, the Secretary shall calculate and publish a single threshold amount for settlements, judgments, awards, or other payments for obligations arising from applicable liability issuance (including self-insurance) and for alleged physical trauma-based incidents (excluding alleged ingestion, implantation, or exposure cases) for that year.  A similar threshold amount is to be established for workers compensation cases.


  • 2013 Budget Timeline (source: Avalere Health): the budget debt/deficit reduction debate will likely continue throughout the year:
  • President releases proposed budget – Feb-March
  • Sequestration goes into effect – March 1 – include 2% provider cut in Medicare
  • FY2013 Continuing Resolution (CR) expires – March 27
  • House and Senate Budgets released and passed – April-May
  • Debt ceiling may need to be raised May-August
  • Medicare physician’s payment (sustainable growth rate, or SGR) expires Dec 31
  • For a summary of several Medicare reform proposals that would shift costs onto Medicare beneficiaries, see [previous Issue Brief – not yet posted on our website]  :
  • Advocates need to focus on proposals that achieve savings but don’t shift costs onto beneficiaries; see, e.g.:
  • Discussion on messaging about prescription drug savings


Over seven million people with Medicare and Medicaid comprise the “dual eligible” population. Dual eligible beneficiaries, some of the poorest and most vulnerable health care consumers, often receive uncoordinated care that is very costly. The Affordable Care Act created the Office for Medicare and Medicaid Coordination (MMCO) and the Center for Medicare and Medicaid Innovation (CMMI) to help address systemic problems in the delivery and financing of care for dual eligibles.

In July 2011, MMCO and CMMI announced the dual eligible integration demonstrations.  These demonstrations allow states to design new approaches to better coordinate care for dual eligibles. States were given the option of choosing between  a managed fee-for-service model or a capitated managed care model. The majority of states are moving forward with managed care models.  As of the most recent counting, twenty two states had submitted proposals to participate in the demonstration. Three states- Massachusetts, Washington and Ohio have entered into memorandums of understanding with CMS and will begin enrolling beneficiaries in April, 2013. Illinois and California are likely to be the next states to sign an MOU with CMS.

The demonstrations hold a great deal of promise to improve the quality and cost efficiency of care for dual eligibles. However, there is also great risk. It is important for advocates at the state level  be involved as stakeholders to ensure that adequate consumer protections in place. At the national level, advocates are working to ensure that an independent ombudsman is a feature of every state demonstration contract with CMS.

For more information about the dual eligible demonstrations, see:


  • Bagnall v. Sebelius (Observation Status) No. 3:11-cv-01703 (D. Conn., filed 11/3/2011). On November 3rd, the Center for Medicare Advocacy filed a class action lawsuit on behalf of individuals who have been denied Medicare Part A coverage of hospital and nursing home stays because their care in the hospital was considered "outpatient observation" rather than an inpatient admission. Here is a link to the Press Release announcing the suit:


[1] Title II of H.R. 1845, entitled “Strengthening Medicare Secondary Payer Rules,” amends 42 U.S.C. §1395y (b)(2)(B) of the Medicare Statute, Pub. Law No. 112-242 (January 10, 2013).  See The Bill Summary and status report are available at: The current Medicare Secondary Payer Recovery Contractor (MSPRC) website is located at .  For more detail, see the Center’s Weekly Alert on this issue which will be available on the Center’s website shortly at  Note, however, Title I, Section 101 of H.R. 1845, sets out a demonstration project under Medicare Part B for the payment of supplies and services related to the administration of Intravenous Immune Globin (IVIG) for the treatment of primary immune deficiency diseases.
[2] The Medicare Secondary Payer program is set out at 42 U.S.C. §1395y(b)(2).
[3] See §201of the Act, “VI) Effective date.


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