Proposed Settlement in Jimmo Case to Clarify Medicare Coverage Standards for Post-Acute Skilled Care and Allow for Re-Review of Certain Claim Denials

On October 16, 2012, a proposed settlement was filed with the Federal U.S. District Court in Vermont in the case of Jimmo et al. v. Sebelius, a class action complaint initially submitted against the Secretary of the Department of Health and Human Services (“DHHS”) by five individual plaintiffs and five institutional plaintiffs represented by attorneys from the Center for Medicare Advocacy, Inc. and Vermont Legal Aid. The initial complaint noted that DHHS and its contractors employed an unlawful “rule of thumb,” commonly referred to as the Medicare “Improvement Standard,” to terminate, limit, or deny certain skilled services provided to Medicare beneficiaries who fail to make measurable functional improvements or who require such services in order to maintain function, thereby depriving these beneficiaries of coverage for reasonable and necessary services in violation of the federal statute and regulations. If the proposed settlement agreement is approved by the court, the Centers for Medicare & Medicaid Services will be required to clarify its payment policies for the coverage of skilled services in the skilled nursing facility, home health, outpatient therapy, and inpatient rehabilitation facility settings.

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