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Jimmo Settlement Back in the News

on Friday, 7 April 2017 in Health Law Alert: Erin E. Busch, Editor

The Centers for Medicare and Medicaid Services (CMS) were too slow in carrying out a corrective action plan agreed to as a part of the 2013 settlement in Jimmo v. Sebelius (now captioned Jimmo v. Price).  The defendant Department of Health and Human Services had agreed to conduct a nationwide educational campaign through CMS to communicate the correct maintenance coverage standard for skilled nursing facilities, home health and outpatient therapy services.

As background, the plaintiffs in Jimmo alleged that the Department applied a standard by which claims were denied if the patient’s condition was unlikely to improve, or in retrospect failed to improve.  This is referred to as “the improvement standard.”  The correct standard for covered services is referred to as “the maintenance standard” under which services are covered if they are necessary to maintain the patient’s current condition or prevent or slow further deterioration.

In the recent action to enforce the Jimmo settlement, the U.S. District Court ordered CMS on February 2, 2017 to:

  1. Publicly and formally disavow the “improvement standard” as improper under Medicare policy by a court-approved “corrective statement.”  This statement was approved on February 17, 2017.
  2. Publish a new webpage devoted to explaining the Jimmo settlement, providing public access to relevant settlement documents, directing providers and suppliers with questions about individual claims to the appropriate Medicare Administrative Contractor, and summarizing the clarifications to Medicare policy that CMS issued as part of the settlement.
  3. Disseminate a clarified and corrected version of a previously issued summary of questions posed and answers provided during a 2013 post-settlement conference call for contractors and adjudicators regarding the effect of the settlement, and hold a national call to orally disseminate the corrected statement regarding the improvement standard.
  4. Direct Medicare Administrative Contractors and Medicare Advantage Organizations to conduct additional training on the Jimmo-related clarifications to the Medicare Beneficiary Policy Manual.

The Medicare Beneficiary Policy has been revised to formalize the “maintenance standard.”  A CMS Fact Sheet on the Jimmo Settlement Agreement is available on the CMS website explaining the relevant provisions.

Anecdotally, Medicare beneficiaries are still being denied coverage for therapy services based on the “improvement standard.”  The takeaway for all institutional providers, physicians, advanced practice professionals, therapists and coders is that the “maintenance standard” is in full force and effect.  Professional judgment and patient advice should be based on the “maintenance standard.”  Any denials based on the “improvement standard” should be appealed, and historic denials may also be “re-reviewed” for Medicare beneficiaries who received a denial of coverage based on the “improvement standard.”  These are subject to re-review under the Settlement even if they became final and non-appealable after January 18, 2011.  CMS discusses this process on its website.

Barbara E. Person


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