Legal Dispute Continues Over Medicare Coverage Of Physical Therapy

Four years after Medicare officials agreed in a landmark court settlement that seniors can't be denied coverage for physical therapy and other skilled care simply because their condition isn't improving, patients are still being turned away.

As a result, federal officials and Medicare advocates have renewed their federal court battle, acknowledging that they cannot agree on a way to fix the problem. Earlier this month, each submitted ideas to the judge, who will decide — possibly within the next few months — what measures should be taken.

Several organizations report that the government's initial education campaign following the settlement has failed. Many seniors have only been able to get coverage once their condition worsened. But once it improved, treatment would stop — until the people got worse and were eligible again for coverage.

Every year thousands of Medicare patients receive physical therapy and other treatment to recover from a fall or medical procedure, as well as to help cope with disabilities or chronic conditions including multiple sclerosis, Alzheimer's or Parkinson's diseases, stroke and spinal cord or brain injuries. Although the settlement removes the necessity to show an improving health condition, it doesn't affect other criteria and limitations on Medicare coverage.

"We still regularly get calls from people who are told they are being denied coverage," said Peter Schmidt at the National Parkinson Foundation, based in Miami. Denials sometimes occur because physical therapy providers use a billing code that still requires the patient to show improvement. Although Parkinson's is a degenerative brain disease, Schmidt said physical therapy and exercise can help slow its progress.

The agreement, approved in 2013, settled a class-action lawsuit against the Centers for Medicare & Medicaid Services filed by Center for Medicare Advocacy and Vermont Legal Aid on behalf of five Medicare beneficiaries, including Glenda Jimmo, and six nationwide patient organizations. Coverage doesn't depend on the "potential for improvement from the therapy but rather on the beneficiary's need for skilled care," the Jimmo settlement said.

In August, U.S. District Court Chief Judge Christina Reiss in Vermont ordered the government to work with the beneficiaries' attorneys to strengthen its education campaign about the policy aimed at companies that process bill, claims reviewers, providers, appeals judges, people who staff the 800-MEDICARE help line and others. (Beneficiaries, however, weren't included.) After working during the fall, both sides acknowledged this month they could not reach a compromise on the best path for getting the message out.

"There was a long-standing kind of mythical policy that Medicare contractors put into place that said Medicare only pays for services if the patient could progress," said Roshunda Drummond-Dye, director of regulatory affairs for the American Physical Therapy Association. "It takes extensive effort to erase that."

Medicare's proposals include such educational efforts and a special webpage with "frequently asked questions" spelling out the proper procedures for handling claims. The government would also issue a clear statement confirming that Medicare covers physical, speech and occupational therapy along with skilled care at home, and in other settings, even if the patient has "reached a plateau" — a term seniors still hear — and isn't improving.

Attorneys for the seniors want to monitor how Medicare officials implement these new measures and have offered to write the policy statement disavowing what's known as the "improvement standard." They also want the government to repeat its 2013 conference call with providers, contractors and others involved in the process in order to correct mistakes, according to papers filed with the court Jan. 13.

"The major problem for us is that they do not want the plaintiff's counsel to have any say or involvement in what they do," said Gill DeFord, litigation director at the Center for Medicare Advocacy in Connecticut. "We think that's exactly the reason the educational campaign was so riddled with inaccuracies in the first place."

But in its filing, the government said, "The Plaintiffs' plan seeks to address perceived deficiencies that were specifically not guaranteed under the [settlement] Agreement." It added accepting the advocates' plan "would also grant their counsel undue control in developing CMS educational materials and an outsize role in CMS's corrective action efforts."

A Medicare spokesman declined to comment under agency protocol because the case is still pending.

The settlement affects care provided by a trained professional in a patient's home, nursing home or the provider's private office that is medically necessary to maintain the patient's condition and prevent deterioration.

Kaiser Health News is an editorially independent news service that is part of the nonpartisan Henry J. Kaiser Family Foundation. You can follow Susan Jaffe on Twitter: @susanjaffe.

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