Medicare expanded to cover maintenance nursing home and home health care effectively adding substantial higher costs

Government, Healthcare, Medicare Leave a comment

Since the start of health insurance there has been an exclusion for care that does not treat and illness or injury, but rather maintains an individual’s status and helps with the chores of everyday living when an individual is disabled and unable to perform those chores such as bathing, dressing, etc. Medicare applies the same limitation on coverage.  While the care now covered under a recent court settlement is beyond basic custodial care, the fact care provided no longer must be associated with any improvement or recovery by the patient brings more expensive treatment within the realm of custodial.

By agreeing to a settlement in a class action lawsuit the Obama administration has effectively added custodial (maintenance) care to Medicare. The change is expected to add substantial costs to Medicare and to Medicare Advantage plans which must also comply with the settlement. There are tens of thousands, perhaps hundreds of thousands of people who will be affected and eligible for the these benefits. The significant change is that no longer must a patient be expected to show any improvement from the care received in a nursing home or through home health care. Chronic conditions like Alzheimer’s, Parkinson’s, multiple sclerosis, strokes, spinal cord injuries and brain trauma frequently require long-term, expensive care that is not active medical care likely to lead to improvement or recovery.

The New York Times characterized the settlement (expected to be approved by the judge in the case) as follows.

The lawsuit stems from a bizarre practice that arose over decades because of Medicare’s fragmented and loosely administered process for handling beneficiary claims. The Medicare law and regulations state that coverage is available for health care and therapy that is “reasonable and necessary for the diagnosis or treatment of illness or injury.”

But at lower levels of Medicare’s review process, where a vast majority of decisions on coverage are made, some Medicare contractors — companies that review and pay medical claims for the government — terminated or refused coverage if there was no prospect of patient improvement or if there were signs that the patient’s condition was deteriorating

The administration itself, in a separate case in Pennsylvania, argued that coverage for skilled nursing care required some expectation that the beneficiary will improve materially in a reasonable and generally predictable period of time. The proposed settlement will reverse this irrational and unfair approach to medical services.

Contrary to the opinion of the NYT, the current practice is neither bizarre nor irrational and unfair, it follows the long-standing practice followed by virtually all health insurance plans which is exactly why the need for separate long-term care insurance was identified. The Times further characterizes the change as humane. In fact, the new coverage lifts a huge financial burden from individuals and families, but places that burden on Medicare and Medicare beneficiaries who will pay for these costs through their premiums.  Medicare advocates are delighted with the settlement calling past practices illegal and seeing a great victory in having tens of thousands of denied claims recalculated and paid.

With Medicare facing serious fiscal problems and already knowing that a major cost factor is end of life care, expanding these benefits has the potential to greatly accelerate Medicare’s problems. The flood gates are open and ripe for abuse. Virtually all nursing home and home health care will potentially be reimbursed by Medicare as providers and families learn how to manipulate the system.  The Department of Health and Human Services is required to launch an extensive communication campaign to get the word out to both patients and providers about this change.

While the settlement does not mention long-term care or even intend to cover “long-term care” as such, the results in terms of costs to Medicare are likely to be similar…huge.  There is also no requirement to add to the number of days of skilled nursing home care under Medicare.  Humane or otherwise this change has added an expanded benefit, and added substantially to Medicare costs without any Congressional involvement.   Following are relevant sections of the settlement agreement.

Maintenance Coverage Standard for Therapy Services under the SNF, HH, and OPT Benefits

6. Manual revisions will clarify that SNF, HH, and OPT coverage of therapy to perform a maintenance program 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.

a. The manual revisions will clarify that, under the SNF, HH, and OPT maintenance coverage standards, skilled therapy services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a qualified therapist (“skilled care”) are necessary for the performance of a safe and effective maintenance program. Such a maintenance program to maintain the patient’s current condition or to prevent or slow further deterioration is covered so long as the beneficiary requires skilled care for the safe and effective performance of the program. When, however, the individualized assessment does not demonstrate such a necessity for skilled care, including when the performance of a maintenance program does not require the skills of a therapist because it could safely and effectively be accomplished by the patient or with the assistance of non-therapists, including unskilled caregivers, such maintenance services will not be covered under the SNF, HH, or OPT benefits.

b. The manual revisions will further clarify that, under the standard set forth in the previous paragraph (Section IX.6.a.), skilled care is necessary for the performance of a safe and effective maintenance program only when (a) the particular patient’s special medical complications require the skills of a qualified therapist to perform a therapy service that would otherwise be considered non-skilled; or (b) the needed therapy procedures are of such complexity that the skills of a qualified therapist are required to perform the procedure.

c. The manual revisions will further clarify that, to the extent provided by regulation, the establishment or design of a maintenance program by a qualified therapist, the instruction of the beneficiary or appropriate caregiver by a qualified therapist regarding a maintenance program, and the necessary periodic reevaluations by a qualified therapist of the beneficiary and maintenance program are covered to the degree that the specialized knowledge and judgment of a qualified therapist are required.

d. The maintenance coverage standard for therapy as outlined in this section does not apply to therapy services provided in an inpatient rehabilitation facility (IRF) or a comprehensive outpatient rehabilitation facility (CORF).

Maintenance Coverage Standard for Nursing Services under the SNF and HH Benefits

7. Manual revisions will clarify that SNF and HH coverage of nursing care does not turn on the presence or absence of an individual’s potential for improvement from the nursing care, but rather on the beneficiary’s need for skilled care. a. The manual revisions will clarify that, under the SNF and HH benefits, skilled nursing services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a registered nurse or, when provided by regulation, a licensed practical (vocational) nurse (“skilled care”) are necessary. Skilled nursing services would be covered where such skilled nursing services are necessary to maintain the patient’s current condition or prevent or slow further deterioration so long as the beneficiary requires skilled care for the services to be safely and effectively provided. When, however, the individualized assessment does not demonstrate such a necessity for skilled care, including when the services needed do not require skilled nursing care because they could safely and effectively be performed by the patient or unskilled caregivers, such services will not be covered under the SNF or HH benefits.

b. The manual revisions will further clarify that, under the standard set forth in the previous paragraph (Section IX.7.a.), skilled nursing care is necessary only when (a) the particular patient’s special medical complications require the skills of a registered nurse or, when provided by regulation, a licensed practical nurse to perform a type of service that would otherwise be considered non-skilled; or (b) the needed services are of such complexity that the skills of a registered nurse or, when provided by regulation, a licensed practical nurse are required to furnish the services. To be considered a skilled service, the service must be so inherently complex that it can be safely and effectively performed only by, or under the supervision of, professional or technical personnel as provided by regulation, including 42 C.F.R. 409.32.

c. The maintenance coverage standard for nursing services as outlined in this section does not apply to nursing services provided in an inpatient rehabilitation facility (IRF) or a comprehensive outpatient rehabilitation facility (CORF).

IRF Coverage Standard

8. Manual revisions will clarify that an IRF claim could never be denied for the following reasons: (1) because a patient could not be expected to achieve complete independence in the domain of self-care or (2) because a patient could not be expected to return to his or her prior level of functioning.

Related articles

Leave a Reply