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Medicare Annual Limits on Therapy Lifted

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Last month Congress approved the federal budget agreement and it was signed by the President on February 9th. One of the provisions should help the health of the 59 million Americans who have Medicare.

Under the budget agreement, annual caps are removed on the amount Medicare pays for physical, occupational or speech-language therapy. The medical review process has also been streamlined. These changes apply to people in traditional Medicare and those with private Medicare Advantage policies.

Beginning January 1, 2018, Medicare beneficiaries can receive these types of therapy indefinitely provided their physician confirms their need for therapy, and they continue to meet requirements like the services are medically necessary as justified by appropriate documentation in the medical record.

Under the Jimmo Settlement Agreement of January 2013, there was clarification that “the Medicare program covers skilled nursing care and skilled therapy services under Medicare’s skilled nursing facility, home health, and outpatient therapy benefits when a beneficiary needs skilled care in order to maintain function or to prevent or slow decline or deterioration (provided all other coverage criteria are met). See https://www.cms.gov/Center/Special-Topic/Jimmo-Center.html. The manual was revised to make clear that there was a “maintenance coverage standard” for skilled nursing and therapy services. Coverage for skilled nursing and skilled therapy services in the Skilled Nursing Facility, Home Health and Outpatient Therapy turns on the beneficiary’s need for skilled care, not whether or not the beneficiary has potential for improvement.

If care is ordered by the physician and it is medically necessary to have a skilled person provide this therapy to maintain the beneficiary’s condition, prevent or slow decline, there is not a limit on the duration or how much Medicare will pay. Patients won’t lose coverage just because they have a chronic disease that does not improve. The Centers for Medicare & Medicaid Services (“CMS”) has a post that explains the change. See https://www.cms.gov/Center/Provider-Type/All-Fee-For-Service-Providers-Center.html.

While this is great news, we’re over five years post Jimmo and we still see incorrect application of the former “improvement standard” instead of the “maintenance coverage standard.” We are cautiously optimistic that this lifting of the Medicare annual limits will be rapidly incorporated into the Medicare system and benefit those who need this therapy and care.