Can Medicare Deny Coverage Based on Lack of Improvement?

Takeaways

• Medicare must cover skilled care needed to maintain your condition or slow decline, even if you aren’t expected to improve. Denials based only on “lack of improvement” are illegal.

• If denied coverage based on a lack of improvement, you can appeal.

For many years, Medicare contractors and reviewers used an informal rule known as the “Improvement Standard” to decide whether to pay for skilled care such as physical therapy or skilled nursing after an illness or surgery. Under this rule, Medicare often denied coverage if a patient was deemed unlikely to improve or make measurable progress. If someone’s condition was stable, chronic, or had plateaued, Medicare might say the care was no longer covered, even if that care was needed to maintain function or prevent further decline.

However, the Medicare Act and federal regulations support coverage for therapy and maintenance health care. Medicare law says that services are covered if they are reasonable and necessary for the diagnosis or treatment of illness or injury — language that does not turn solely on whether someone will get better.

Jimmo v. Sebelius: The Lawsuit That Changed Policy

In 2011, a group of Medicare patients and national advocacy organizations filed a class-action lawsuit, Jimmo v. Sebelius, in the U.S. District Court for the District of Vermont, arguing that Medicare’s frequent denials of coverage based on potential for improvement violated the law.

According to the plaintiffs, Medicare was wrongly denying coverage to people needing ongoing skilled care, particularly those with chronic or stable conditions, simply because they weren’t expected to improve. Rather than continuing protracted litigation, the Centers for Medicare & Medicaid Services (CMS) agreed to settle in January 2013.

Under the Jimmo settlement agreement, the CMS clarified the rejection of an improvement standard, reiterating that coverage depends on whether the services are medically necessary to maintain a beneficiary’s condition or to prevent or slow further deterioration, provided all other coverage criteria are met. This is called the “maintenance coverage standard.” Medicare policy manuals were revised to make this clear.

The settlement applies to skilled nursing facility care, home health services, and outpatient therapy services.

Why the Jimmo Settlement Matters

The Jimmo settlement is significant for older adults and beneficiaries with chronic, stable, or disabling conditions, such as Parkinson’s or Alzheimer’s. These individuals often need ongoing skilled care to maintain their current level of function or prevent worsening of their condition, even if they are not expected to improve. The settlement confirms that such care can be covered by Medicare. This means:

• You don’t have to demonstrate improvement to qualify for continued skilled care coverage.
• Medicare should cover services that help maintain function or slow decline when medically necessary.
• Denials based solely on lack of improvement are not legally valid.

What To Do If You Are Denied Medicare Benefits Based on Improvement

If Medicare denies payment for skilled care by saying you are not improving or not likely to improve, you have several options.

Ask for an Explanation of the Denial

Review the Medicare Summary Notice (MSN) or Explanation of Benefits (EOB) to understand why your claim was denied. Determine if the reason is lack of improvement or something unrelated, like missing documentation.

Appeal the Decision

Medicare has a multilevel appeals process that allows patients to challenge coverage denials. You can request:

• A redetermination with the Medicare Administrative Contractor (MAC) that handled your claim
• Reconsideration by a qualified independent contractor (QIC)
• A decision by the Office of Medicare Hearings and Appeals (OMHA)
• A review by the Medicare Appeals Council
• A judicial review by a Federal District Court

In your appeal, cite the Jimmo settlement and the maintenance coverage standard to argue that your skilled care should not have been denied simply because you were not expected to improve.

File a “Re-Review” Request

If you were denied covered services on or after January 18, 2011, and the decision became final, you may be eligible for a re-review under the Jimmo settlement terms, and the CMS can revisit the decision under the correct maintenance standard. Instructions and forms are available through the CMS and Center for Medicare Advocacy websites.

Seek Help From Your Provider

Your doctor, therapist, or case manager can document your medical need for skilled care (e.g., ongoing therapy), explain that it is necessary to safely maintain your current function or prevent decline, and support your appeal.

Get Assistance From an Attorney or Advocacy Group

Organizations like the Center for Medicare Advocacy and local legal aid groups can also help you understand and enforce your Medicare rights. In some cases, attorneys specializing in Medicare appeals can be especially helpful.

Coverage Should Be About Need, Not Improvement

The improvement standard was an informal policy that never had legal backing in Medicare law. Through Jimmo v. Sebelius, Medicare acknowledged it should not deny coverage simply because a patient isn’t expected to improve. Instead, medically necessary skilled care to maintain current health or prevent decline can be covered under Medicare.

By understanding your rights and the appeals process, you can fight inappropriate denials and get the health care services you need.

For additional reading, check out the following articles:

• Medicare Coverage Basics: What You Need to Know
• Know Your Options Before You Enroll in a Medicare Plan
• Do Medicare Benefits Cover Skilled Nursing Care?
• Medicare’s Coverage of Mental Health Services
• Pairing Medicare With Your Current Health Insurance Coverage
• What Durable Medical Equipment Does Medicare Part B Cover?