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Important Change Made in Medicare Payments for Skilled Care

Published May 19, 2014

An important change has taken place in Medicare payments for certain types of skilled care, such as physical therapy. Thanks to the terms of a settlement in a class-action lawsuit, no longer will Medicare payments be discontinued because a patient’s condition has stopped improving. This is a significant benefit for many patients whose conditions may not be improving, but who need skilled care to keep their conditions from deteriorating. However, the change was made quietly, without informing Medicare beneficiaries, so many people are not aware of the new rules.

The change affects many Medicare beneficiaries with chronic diseases such as Alzheimer’s, Parkinson’s and multiple sclerosis. The requirement that patients show improvement has been removed from Medicare’s policy manual, meaning that Medicare will cover skilled care from physical, speech and occupational therapists, as well as nursing home care and home health care, for patients who need such care to prevent their conditions from deteriorating.

The new rules may be most beneficial to seniors who want to maintain their independence for as long as possible. If seniors are able to get skilled care for chronic conditions while they are living at home, they may be able to avoid the need for institutional care.

Of course, Medicare still has eligibility requirements. Treatment must be ordered by a doctor, and there is a $1,920 annual cap on physical and speech therapy provided in a nursing home or outpatient facility. However, exceptions to the cap are available if a doctor certifies that the treatment is medically necessary. There is another, separate cap on occupational therapy costs, with the same limits and exceptions. In the case of home health care, the caps do not apply if a patient is “homebound,” which means that leaving home requires considerable effort and cannot be done without the help of another person or an assistive device.

The terms of the settlement also require that Medicare perform a review of claims from the past three years that were denied because patients were not improving. Patients who paid for such care themselves can request reimbursement. For claims with a final denial dating from Jan. 18, 2011 to Jan. 24, 2013, the deadline to request reimbursement is July 23, 2014. For claims with a final denial dating from Jan. 25, 2013 to Jan. 23, 2014, the deadline is Jan. 23, 2015.

After Jan. 23, 2014, Medicare should not deny claims solely for the reason that a patient’s condition is not improving or has plateaued. If medical providers suggest that care will not be covered for that reason, they should be directed to the Centers for Medicare and Medicaid Services website, which has a fact sheet outlining the terms of the settlement.

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