In a landmark decision that will dramatically alter the amount of Medicare coverage received by people with chronic conditions and disabilities, the Federal government has agreed to end the practice of requiring Medicare beneficiaries to show a likelihood of medical or functional improvement before Medicare would pay for skilled nursing or therapy services. In the settlement of a class action lawsuit that will affect all Medicare beneficiaries (Anderson v. Sebelius, 2010 WL 4273238, No. 09-16 (D.Vt., Oct. 25, 2010)), Medicare’s coverage rules will be amended to permit payment for services that are needed to “maintain the patient’s current condition or prevent or slow further deterioration.” Neither the Medicare law nor the regulations have an improvement standard. Unfortunately, the contractors who process Medicare eligibility determinations use Medicare manuals and guidelines that suggest that a patient should not be entitled to Medicare coverage if a patient is not improving or has “plateaued”. Disability accompanies many chronic conditions such as Alzheimer’s disease and Parkinson’s disease. Rehabilitation, physical therapy, home health care and other forms of skilled care help maintain a person’s functional ability and quality of life. They also serve to help avoid more expensive care in hospitals and nursing homes. The clarified standard of review will allow more disabled patients to obtain and stay on Medicare. Experts have predicted that the cost of such expansion could be substantial. These changes will apply to traditional Medicare recipients and to private Medicare Advantage Plans. They will apply to those 65 years of age and older as well as to those who qualify for Medicare due to a disability that renders them eligible for Social Security Disability for a period of two (2) years. The Federal District Court in Vermont is expected to approve the settlement agreement, negotiated by the Justice Department, the Department of Health and Human Services along with the Plaintiffs. This settlement is also likely to resolve the similar class action lawsuit in Pennsylvania, entitled Papciak v. Sebelius.