Ending a form of discrimination that affected millions of Medicare recipients, the Bush administration is extending Medicare coverage to victims of Alzheimer's disease and other dementias. The new policy means that a diagnosis of dementia cannot bar beneficiaries from receiving coverage of mental health services, physical and occupational therapy, hospice care, home care, and other services to help them cope with their disease. As a result, many patients will be able to live at home longer and avoid institutionalization.

In the past, many companies that review and pay Medicare claims (called 'carriers') automatically denied claims of patients who had a diagnosis of dementia because treatment was viewed as futile. In fact, some patients with such a diagnosis could not receive Medicare coverage of an unrelated condition, like a broken hip or a stroke.

But responding to new scientific studies showing that Alzheimer's patients can benefit from physical and occupational therapy, psychotherapy and other services, the administration quietly issued the new policy last fall. Doctors can now diagnose Alzheimer's in its early stages, when patients can make the most gains from the types of therapies now covered. For example, patients with a mild to moderate form of the disease have been shown to benefit from psychotherapy to help them cope with depression, anxiety and memory loss.

'It's a necessary, long-overdue corrective,' Robert Hayes, president of the Medicare Rights Center, told ElderLawAnswers. Hayes says the new policy should allow dementia sufferers to receive services like physical, occupational and speech therapy, as long as the services are determined to be medically necessary. Such treatments 'could make a big difference in the quality of life' of dementia victims, he says.

But Hayes says that the policy change 'does not give a person with dementia a blank check for services.' Home care may still not be an option because recipients must require skilled nursing care and be homebound, criteria that not all Alzheimer''s patients would meet. Moreover, Medicare still does not provide assistance in several areas of great need for dementia patients: custodial in-home care, care management and prescription drugs.

The new services could cost Medicare several billion dollars a year, but these added costs will be offset in part by savings to other parts of Medicare and to Medicaid because patients will be able to live longer on their own.

The new policy came after two years of lobbying by the Alzheimer's Association and the American Bar Association's Commission on Legal Problems of the Elderly . 'This is great news for people with Alzheimer's disease and other dementias,' said Stephen R. McConnell, the Alzheimer's Association's chief executive.

The Centers for Medicare and Medicaid Services' Program Memorandum to Medicare carriers can be downloaded from the following Web link: http://www.hcfa.gov/pubforms/transmit/AB01135.pdf