When Can a Resident of a Rehab Facility, Assisted Living or Nursing Home be Denied Medicare Coverage?

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Medicare covers the cost of skilled nursing for twenty days and then eighty additional days on a co-payment basis for a total of one hundred days of coverage. However, sometimes a patient will be told by a facility that they do not qualify for skilled nursing under Medicare and that their benefits are being terminated early.

What is the appropriate standard for terminating coverage?

An important court decision was made in January 2013 in the Vermont case of Jimmo v. Sebelius. In that case, a lawsuit was settled between the Center for Medicare Advocacy (CMA) and Medicare contractors which dealt with the correct standard for Medicare coverage of skilled care services.

Under the Code of Federal Regulations (CFR), skilled care services are those required to be administered by a skilled professional.  In Jimmo, the defendant Medicare contractors were allegedly applying an “improvement” standard in making coverage determinations.  That is, they asserted that coverage would be available based upon a “rule of thumb” determination of a recipient’s prospects for recovery from his or her condition – if there were no potential for recovery, coverage would be denied.

The Medicare statute and regulations reject the imposition of an improvement standard in determining skilled care coverage.  For example, CFR 409.32(c) states:

The restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.

Rather, a coverage determination should be based upon whether skilled care is required.  Whether skilled care is required depends on whether such services are reasonable and necessary to prevent or slow down further deterioration of the patient’s conditions.  This determination cannot be based solely on a patient’s potential for a recovery.

As part of the settlement agreement, the Center for Medicare & Medicaid Services (CMS) is required to:

  • Revise program manuals used by Medicare contractors to provide that coverage of therapy “does not turn on the presence or absence of a beneficiary’s potential for improvement from the therapy, but rather on the beneficiary’s need for skilled care.”
  • Undertake an educational campaign for contractors, adjudicators, providers, and suppliers to communicate policy clarifications regarding eligibility for skilled care coverage.
  • Engage in accountability measures, such as random sampling of coverage decisions and individual claims determinations for compliance with skilled care determination procedures.

Although this agreement was made in January 2013, there are still many incidents of patients being wrongly held to an improvement standard and thereby, improperly denied coverage.  For that reason, it is important for facilities and patients and their families alike, to ensure that they are advocating for the application of the correct standard and that they are receiving the skilled nursing coverage to which they are entitled.

For more information on skilled nursing coverage under Medicare and long-term care planning in general, contact a Cleveland elder law lawyer.