A Humane Medicare Rule Change

October 23, 2012
Author: New York Times

A proposed settlement of a nationwide class-action lawsuit should make it easier for tens of thousands of disabled and chronically ill people to qualify for Medicare coverage. It is clearly the humane thing to do for desperately sick people with little hope of recovery.

This change could add substantial costs to a program that needs to reduce projected spending to remain sustainable in the long run. The solution to Medicare’s cost problem is not to deny needed services but to make the delivery of care more efficient and less expensive, and to ensure better management of care for the chronically ill.

There may even be some savings under the settlement. If patients are able to get medical services and therapy in their homes, some may be able to avoid more expensive care in hospitals and nursing homes.

As Robert Pear reported in The Times on Tuesday, under the agreement, the Obama administration will end a longstanding practice of requiring many beneficiaries to show they are likely to improve before Medicare will pay for skilled nursing or therapy services.

Instead, Medicare will pay for the services if they are needed to maintain the patient’s current condition or to prevent or slow further deterioration — regardless of whether the patient is expected to improve medically or in ability to function. The agreement is expected to be approved by a federal district judge in Vermont, which is where the case was filed.

Lawyers for the beneficiaries say the settlement could help people with chronic conditions like Alzheimer’s, Parkinson’s, multiple sclerosis, strokes, spinal cord injuries and brain trauma. Often the prospects for improvement are slim, but there are ways to slow a patient’s deterioration and help the patient to live long enough to take advantage of new treatments as they are developed.

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.

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