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As the New York Times reported on March 31, 2002 (p.1), Medicare advocates have been successful in convincing the Centers for Medicare and Medicaid Services (CMS) to loosen Medicare's denial practices for people with Alzheimer's disease and other cognitive impairments.

Unfortunately, Medicare has a decades-long policy of denying coverage to people who need services which are covered by the Medicare Act on the grounds that the individuals are "chronic and stable" and will not improve. These are not valid reasons for denial.

Of equal value to dispelling the myth that Alzheimer's patients cannot benefit from certain kinds of medical, mental health, and therapy services would be dispelling the myth that Medicare covers only services that are intended to result in improved functioning. This is not a requirement of Medicare law, but is a standard often applied in coverage determinations. In fact, Medicare covers services that are needed to attain or maintain functioning and so can be used to prevent or postpone the loss of physical and mental capabilities. Unfortunately, too few people, including Medicare service providers are aware of this aspect of the law so that beneficiaries without well informed advocates go without needed services if they are unable to pay for them privately.

Medicare's recognition of the impropriety of denying coverage for a host of services to people simply because they have Alzheimer's disease is appropriate and just. CMS should also insist upon ending such denial practices for beneficiaries with multiple sclerosis, Parkinson’s disease, stroke-related deficits, and other long-term and chronic conditions.

Successful advocacy over the past twenty years has improved this situation, but greater visibility for this aspect of Medicare coverage would enhance the lives of millions of older people and people with disabilities.

The Medicare Program Memorandum Regarding Coverage for Beneficiaries with Dementia

Medicare will not pay for items, services or procedures covered by the Medicare program if it determines that the items, services or procedures are not "reasonable and necessary." For years, some Medicare carriers determined that medical services were not reasonable and necessary and automatically refused to pay for them solely because the claim was submitted on behalf of a beneficiary with a diagnosis of Alzheimer’s disease or other dementia.

On September 25, 2001 the Centers for Medicare and Medicaid Services (CMS) issued a program memorandum, Program Memorandum AB 01-135, Medical Review of Services for Patients with Dementia, to address the problem. Effective September 1, 2001, Medicare will not use the dementia diagnostic codes alone as a basis for determining whether Medicare covered services are reasonable and necessary.

What the Program Memorandum Does

The new Program Memorandum explains that due to advances in diagnostic techniques, physicians and psychologists can diagnose individuals with certain dementias at the earliest stages of the disease. It makes clear that individuals with Alzheimer’s disease may benefit from pharmacological, physical, occupational, speech and other therapies. Therefore, Medicare will cover evaluation and management visits and therapies if these therapies are reasonable and necessary for the beneficiary. Medicare will cover services that are reasonable or necessary for an illness or injury unrelated to the dementia diagnosis. If an individual with Alzheimer’s disease has an unsteady gait and physical therapy is necessary, Medicare will pay for it.

As a result of the Program Memorandum, Medicare payment of covered medical services and procedures will be determined based on the individual assessment and needs of the beneficiary, rather than denied solely because of the dementia diagnosis.

What the Program Memorandum Does NOT Do

The new Program Memorandum does not change Medicare coverage rules. It does not add Medicare coverage of additional items and services that would help a beneficiary with dementia, such as prescription drugs, adult day care, or custodial care. The Program Memorandum only affects how Medicare will determine whether a covered service is reasonable and necessary for an individual with a diagnosis of Alzheimer’s disease or other dementia.

The Program Memorandum is available at:

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