HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Wednesday, October 24, 2012

Medicare Reportedly Settles on Coverage for Rehabilitative Services

For many years, Medicare has refused to pay for physical or occupational therapy unless patients could show "improvement."  Although this policy is a cost-saver, it has devastating effects on patients for whom these therapies are critical to maintaining current levels of functioning or preventing declines.  The "benefits" of care extend far beyond "improvement."

Over the years, there have been some changes.  For example, many local Medicare carriers routinely denied ANY physical therapy to patients with a diagnosis of Alzheimer's disease, apparently on the theory that people with declining cognitive capacities cannot benefit from the service.  Leslie Fried, an lawyer at the ABA's Commission on Law and Aging (at the time the Commission on the Legal Problems of the Elderly) and partially funded by the Alzheimer's Association, took on these policies,  A photograph of President Reagan leaving physical therapy after his hip replacement (and long after the public announcement of his diagnosis of Alzheimer's) helped her to get Medicare to change such across-the-board denials.  However, the overall policy that patients must show "improvement" continued.  The Medicare Part B manual (current as of spring, 2012), reads:  "Rehabilitative therapy includes recovery or improvement in function and, when possible, restoration to a previous level of health and well-being. Therefore, evaluation, re- evaluation and assessment documented in the progress report should describe objective measurements which, when compared, show improvements in function or decrease in severity or rationalization for an optimistic outlook to justify continued treatment."

This policy was challenged in federal district court in Vermont by lawyers at the Center for Medicare Advocacy.  The Obama administration reportedly agreed earlier this week to settle the case, by stating in the Medicare manual that coverage for rehabilitative services:  "does not turn on the presence or absence of a beneficiary's potential for improvement from the therapy, but rather on the beneficiary's need for skilled care." News reports indicate that Medicare is describing this as a "clarification" of existing policy.  If it is such a clarification--and the language quoted above from the current manual would suggest it is far more than that--it is a welcome one, with the potential to benefit many Medicare recipients with chronic or disabling conditions.


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