Source: https://www.medicareadvocacy.org/two-federal-courts-reject-improvement-standard-for-denying-medicare-coverage/
Timestamp: 2019-04-21 12:17:48+00:00

Document:
Within a month of each other, two federal district courts have rejected the Center for Medicare & Medicaid Services’ (CMS) beleaguered Medicare “Improvement Standard,” thereby adding to the chorus of federal judges who have found the standard unsupportable under the Medicare statute and regulations. Although CMS continues to claim formally that there exists no such policy as the “Improvement Standard” (by whatever term it is known), the courts have repeatedly and consistently repudiated it and CMS’s reliance on it. With two more adverse decisions on the issue, CMS is becoming hard-pressed to perpetuate the myth that it is not employing an illegal rule of thumb or condition of coverage.
In the first of the two cases, Papciak, a federal magistrate judge sitting as the district court reversed the decision terminating coverage to an 81-year-old woman who had been receiving skilled therapy after hip surgery. The agency’s view was that she had “met her maximum potential for her physical and occupational therapy.” Analyzing the beneficiary’s two arguments, that the Secretary had failed to apply the correct legal standard and that she had ignored evidence in the record to conclude that the beneficiary needed only custodial care, the court ruled favorably for the beneficiary on both grounds.
On the first point, the court pointed to a provision of a Medicare manual that bases coverage for skilled care on whether “‘the condition of the patient will improve materially in a reasonable and generally predictable period of time, or the services must be necessary for the establishment of a safe and effective maintenance program.'” The court noted that the Secretary had never considered the alternative basis for coverage in the need for a rehabilitative maintenance program. The court also relied on the regulation stating that “‘a patient may need skilled services to prevent further deterioration or preserve current capabilities.'” On this basis alone, the denial of coverage could not be affirmed.
In the second part of the decision, the court held that the agency had ignored evidence indicating that she was, in fact, improving. The court therefore remanded for an award of benefits.
The second case, Anderson, had an unusual history leading to the district judge’s repudiation of the Improvement Standard (which the court referred to as the “stability presumption”). The magistrate judge had issued a report and recommendation granting the beneficiary’s motion to reverse the decision denying further coverage for physical and occupational therapy, but solely on the ground that the Secretary’s analysis was not supported by substantial evidence. The magistrate judge had specifically rejected the beneficiary’s contention that the Secretary was applying an improper presumption. The Secretary did not file objections, but the beneficiary did, and the district judge largely agreed with the beneficiary.
These two decisions follow a host of decisions over the last 25 years repudiating the Improvement Standard. Nevertheless, CMS has taken little or no action to alter the policy. As part of its effort to change this culture, the Center for Medicare Advocacy has met on several occasions with CMS officials, but no substantive change has come of those meetings. The Center is now considering what other steps may be appropriate, including possible litigation, and is interested in hearing of beneficiaries who are being harmed by this policy. If you or someone you know has been affected by this unfair standard, send a brief description of the experience to the Center at improvement@medicareadvocacy.org.
 Papciak v. Sebelius, — F.Supp.2d —, 2010 WL 3885605 (W.D.Pa. 2010); Anderson v. Sebelius, 2010 WL 4273238, No. 09-16 (D.Vt., Oct. 25, 2010).
 The language by which coverage is denied usually employs some variation of the beneficiary being “stable” or “chronic,” having “plateaued,” not improving, or needing services for “maintenance only,” but the policy is the same: coverage is denied on the ground that the beneficiary is not improving.
 For a more complete discussion of the standard, see G. Deford, M. Murphy, J. Stein, How the “Improvement Standard” Improperly Denies Coverage to Medicare Patients with Chronic Conditions, 43 Clearinghouse Rev. 422 (Jan.-Feb. 2010) https://www.medicareadvocacy.org/Projects/Improvement/PublishedArticle.pdf; see also https://www.medicareadvocacy.org/Projects/Improvement/ImprovementMain.htm .
 2010 WL 3885605 at *1.
 Id. at *4. The decision provides a careful discussion of the difference between skilled nursing care and custodial care, which is not covered under Medicare. 42 U.S.C. § 1395y(a)(9). Id. at *2-*3.
Id. at 4 (quoting Medicare Skilled Nursing Facility Manual, Ch. 2, § 214.3(A)(1)). A similar approach employing the potential for improvement as an alternative basis for coverage of therapy appears in the home health regulations. 42 C.F.R. § 409.44(c)(2)(iii).
 Id. (quoting 42 C.F.R. § 409.32(c)).
 Id. at *6. It is unclear whether the two parts of the decision are in the alternative or are complementary. With respect to the first part of the decision, rejecting the improvement standard, the court only concluded that the Secretary was not entitled to a decision in her favor, but, with respect to the second part, the court ordered the award of benefits.
 The beneficiary had also complained that the application of the Improvement Standard violated due process and that she had been unable to prove that claim because the magistrate judge, in an earlier decision approved by the district court, refused to allow the beneficiary to carry out discovery. In the most recent decision, the district judge held that that prior ruling had to stand under the law of the case doctrine. Anderson, 2010 WL 4273238 at *4.
 Id. at *5-*6. The judge quoted at length from § 40.1.1 of the MPBM, which requires, inter alia, that the determination be “based solely upon the patient’s unique condition and individual needs,” and is identical to much of the relevant regulatory language in 42 C.F.R. § 409.44(b)(3)(iii).
 Id. at *6 (quoting from magistrate judge’s report and recommendation).
 Id. (quoting Folland ex rel. Smith v. Sullivan, 1992 WL 295230, at *7 (D.Vt., Sept. 1, 1992)).

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