Jimmy Jones, a 78-year-old, was hospitalized due to broken ribs and other injuries sustained when he fell in the middle of the night while going to the bathroom. Jimmy was released from the hospital to Good Care Rehabilitation Center. Medicare paid for the hospitalization. Initially, it also paid for the rehab care. However, one day when Jimmy’s wife, Janey, arrived to visit, she was approached by the facility’s social worker, Karen. Karen informed her that Medicare would no longer pay for Jimmy’s care because he was no longer making improvement. Jimmy would be discharged on the following Monday unless Janey was willing to private pay for the services being rendered.

            Janey was horrified. She and Jimmy didn’t have the money to private pay and she was certain she could not provide the care Jimmy needed at home. She was afraid that, without the care he was receiving, his health would decline. What were they to do?

Jimmo v Sebelius and Removal of the Medicare Improvement Standard

            The case of Jimmo v. Sebelius, filed by the Center for Medicare Advocacy (CMA), dealt with whether Medicare would pay the charges of the rehabilitation facility if a patient released from the hospital to that facility after the patient failed to show continued improvement. This reason for denial of Medicare coverage had been dubbed the “Improvement Standard.”

             On January 13, 2013, a settlement agreement stipulated that Medicare could not deny payment for rehabilitation care merely on the basis that the patient did not show continued improvement. Instead, if a patient required skilled services reasonable and necessary to prevent or slow deterioration in general health status - even if no longer improving - Medicare should continue to pay the cost of that care.

            In accordance with the settlement, the Centers for Medicare & Medicaid Services (CMS) were required to issue clarifications to existing programs and add educational materials to ensure that claims were correctly determined by Medicare consistent with this policy. These changes were supposed to be implemented to insure that beneficiaries receive the full coverage to which they are entitled.

            Even after the settlement was reached, patients continued to be wrongfully discharged, so much so, that the CMA went back to court in 2016, seeking to enforce the settlement. The court found that the manual provisions that directed Medicare employees making decisions regarding coverage for rehabilitation were inaccurate and failed to reflect the proper standard required. In response, the court ordered the CMS to submit a corrective action plan for review. Although the plan was submitted on September 30, 2016, it is still in review.

Wrongful Denials and Discharges Continue Despite Court Order

            Based upon the failure of the CMS to have properly corrected its training materials, a large number of improper denials of Medicare coverage are still occurring. These denials of coverage result in discharges of those patients who cannot afford to pay and result in unnecessary improper payment out-of-pocket for those who can afford private pay.

Improper Determinations Must Be Challenged 

            It is essential that patients, their families and their attorneys challenge a denial of Medicare coverage and/or a discharge from a rehabilitation facility on the basis that the patient has not met the “Improvement Standard” if the care provided is needed to prevent or slow deterioration in the general health of the patient.

            Patients, families and attorneys can consult the Center for Medical Advocacy website for information on how to make these challenges. See http://www.medicareadvocacy.org/self-help-packet-for-expedited-skilled-nursing-facility-appeals-including-improvements-standard/denials.

            If the patient has been receiving home health care and a denial on the “Improvement Standard” has been issued, instead consult http://www.medicareadvocacy.org/self-help-packet-for-expedited-home-health-care-appeals-including-improvement-standard-denials.

 Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm in Fort Worth. She lives and practices in beautiful Somervell County, near Chalk Mountain