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The Politics of Health Care

Medicare Class Action Suit Settled

Published April 18, 2013 9:39 AM by Michael LaMagna

There are big changes to your Medicare benefit that will assist you to obtain a longer stay at a rehabilitation center or more outpatient therapy. Medicare just settled a lawsuit, Jimmo v Sebelius, which clarifies when a rehabilitation center, home health care or outpatient therapy provider can discontinue services paid by Medicare.

As most readers know, your Medicare Part A benefit pays for rehabilitation after a 3 day hospital stay for a period up to 100 days, day 1 to 20 at 100%, day 21 to 100 at 80% (you are responsible to pay the 20% co-pay of $148/per day or a supplemental plan will cover the daily fee). Prior to the recent settlement of the Jimmo lawsuit, Medicare providers would discharge beneficiaries, thus denying them more services during the 100 days if there wasn't any "Improvement." This rule of thumb "Improvement Standard" meant that the provider would determine that there wasn't any further rehabilitation or restoration potential, leaving the beneficiary to pay privately (at $400 to $500 per day), be discharged or appeal the decision.

Jimmo, which was a class action lawsuit against Medicare based on this very issue, was just settled. Effective immediately, Medicare can no longer deny a claim because of a lack of rehabilitation potential, but is expanded to pay for rehabilitation which prevents or slows further deterioration in a beneficiaries' clinical condition. This new standard will allow many Medicare beneficiaries to continue on with their therapy, even if they do not show restorative potential, but require more time to prevent further physical deterioration. This should save beneficiaries thousands of dollars and more importantly, allow beneficiaries to obtain the therapy they need to prevent them from further harm after discharge.

Therefore, if you are currently obtaining Medicare paid rehabilitation services in a rehabilitation center or at home and you are being discharged because of a lack of improvement, you may be able to stop the discharge by reminding the provider of the new Medicare policy clarification.

This article is provided for informational purposes only. Nothing in this article shall be construed as legal advice or should be relied upon as such. Michael LaMagna is a Partner at LaMagna & Associates, PC, practicing Elder Law/Probate/Disability/Wills, Trusts and Estates, Health Care Regulatory, Medicare Appeals, Social Security and General Legal practice in both New York and Connecticut. Michael was just appointed to the ACO Task Force of the American Health Lawyers Association. Email him at Mlamagna@nyandctlaw.com, call him at 914-437-5955 or visit Attorney LaMagna's website at www.nyandctlaw.com for more information.

posted by Michael LaMagna


My mother Shirley Southern was just discharged from Innovative Senior Care because she wasn't making progress.  The lawsuit means nothing if they continue to not provide paid care by Medicare when "progress" is not being made in physical therapy.

Cyndi Shofner January 21, 2014 1:19 PM
Houston TX

It's a sad scenario when the government has issued caps on rehab services to our elders,which in retrospect will cause more falls, less management of chronic diseases, more hip fractures, and therefore increasing higher healthcare costs. The government needs to be more proactive in maintaining the health of our seniors across the country, as the nation's elder population will become a majority within the next ten years. People need to appeal to their legislators about the spending cuts that are ever increasing for the populus of this great nation.

Lori Morell, Wellness - Sr.Mgr Healthy Aging, Francis E. PArker July 25, 2013 10:18 AM
Highland Park NJ

Thank you for this information. I have a background in Rehabilitation nursing and have seen firsthand how the elderly in rehab may not show gains at first but given time have walked out of our hospital after debilitating strokes. When the reimbursement regulations changed in the early 2000's, I saw so many people denied the time they needed to get their lives back.

Anne Miller, Nursing Education - RN, HACC May 4, 2013 8:39 AM
Lancaster PA

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