Volume 28, No. 6 July 2013

Landmark Settlement Agreement for Rehabilitation Providers

By Michelle K. Buford

A recent American Medical Rehabilitation Providers Assn. (AMRPA) Seminar in New Orleans discussed a very significant proposed Settlement Agreement that was filed in federal district court on October 16, 2012 – the Jimmo v. Sebelius “Improvement Standard” case. The Settlement must now be approved by the Court, which may take several months. Once approved, however, CMS will revise the Medicare Benefit Policy Manual and other Medicare Manuals to correct suggestions that Medicare coverage is dependent on a Beneficiary’s “actually improving.”

New Manual 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 healthcare providers, Medicare Contractors, and Medicare adjudicators that they should not limit Medicare coverage to only those beneficiaries with potential for improvement. Rather, 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.

The Jimmo Settlement does not change current law and regulations governing the Medicare program. With that in mind, healthcare providers should apply the maintenance standard and provide medically necessary skilled nursing and/or therapy services to patients who need them to maintain their function, or prevent or slow their decline. The most important question is whether the skilled services of a healthcare professional are needed, not whether the beneficiary will “improve.” It remains essential, however, that claims for skilled care coverage include sufficient documentation to clearly support that skilled care is required, that it was provided, and that the services are reasonable and necessary.

The proposed Settlement Agreement also establishes a process of “re-review” for Medicare beneficiaries who received a denial of skilled nursing facility care, home health care, or outpatient therapy services (PT, OT, or ST) that became final and non-appealable after January 18, 2011. Once the federal District Court approves the settlement, CMS will announce how beneficiaries can invoke the re-review process. A copy of CMS’ Fact Sheet on the Jimmo case may be viewed at: http://www.cms.gov/Medicare/Medicare-Fee-for- Service-Payment/SNFPPS/Downloads/Jimmo-FactSheet.pdf.

The proposed Settlement Agreement may be viewed at either of the links below:


The Jimmo Settlement Agreement represents a landmark outcome for the rehabilitation healthcare industry and individuals who need and can benefit from rehab care by preventing clinical deterioration. By preventing inappropriate denial or premature discontinuation of Medicare coverage for such beneficiaries, the Jimmo Settlement should lead to smarter, and potentially less expensive, healthcare for many individuals.