Updated on: April 1, 2021

Medicare Auditors Fail to Follow the Jimmo Settlement

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Original story posted on: March 30, 2021

Some Uniform Program Integrity Contractors (UPICs) have failed to follow the Jimmo settlement standard.

Auditors are not lawyers. Some auditors do not even possess the clinical background of the services they are auditing. I’m concentrating on the lack of legal licenses today. Because the standards to which auditors need to hold providers are found in the Medicare provider manuals, regulations, National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs). To add even more spice to the recipe, common law also governs Medicare and Medicaid policies, as in court cases.

For example, the Jimmo v. Selebius settlement agreement dictates the standards for skilled nursing and skilled therapy in skilled nursing facilities (SNFs), home health, and outpatient therapy settings, and importantly holds that coverage does not hinge on the presence or absence of a beneficiary’s potential for improvement. The Jimmo settlement dictates that:

“Specifically, in accordance with the settlement agreement, the manual revisions clarify that coverage of skilled nursing and skilled therapy services in the skilled nursing facility (SNF), home health (HH), and outpatient therapy (OPT) settings ‘…does not turn on the presence or absence of a beneficiary’s potential for improvement, but rather on the beneficiary’s need for skilled care.’ Skilled care may be necessary to improve a patient’s current condition, to maintain the patient’s current condition, or to prevent or slow further deterioration of the patient’s condition.”

This Jimmo standard – not requiring a potential for improvement – is essential for diseases that are lifelong and debilitating, like multiple sclerosis (MS). For beneficiaries with MS, skilled therapy is essential to prevent regression.

I have reviewed numerous audits by Uniform Program Integrity Contractors (UPICs) in particular that have failed to follow the Jimmo settlement standard and denied 100 percent of my provider-client’s claims – all for failure to demonstrate potential for improvement for MS patients. It seems ludicrous until you stop and remember that auditors are not attorneys. This Jimmo standard is found in a settlement agreement from January 2013. While we will win on appeal, it costs providers valuable money when auditors apply the wrong standards.

While an expectation of improvement could be a reasonable criterion to consider when evaluating, for example, a claim in which the goal of treatment is restoring a prior capability, Medicare policy has long recognized that there may also be specific instances where no improvement is expected – but skilled care is nevertheless required in order to prevent or slow deterioration and maintain a beneficiary at the maximum practicable level of function. For example, in the regulations at 42 C.F.R. §409.32(c), the level-of-care criteria for SNF coverage specify that the “. . . restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.” The auditors should understand this and be trained on the proper standards.

The Medicare statute and regulations have never supported the imposition of an “improvement standard” rule of thumb in determining whether skilled care is required to prevent or slow deterioration in a patient’s condition. A beneficiary’s lack of restoration potential cannot in itself serve as the basis for denying coverage, without regard to an individualized assessment of the beneficiary’s medical condition and the reasonableness and necessity of the treatment, care, or services in question.

When you are audited by an auditor – whether it be a RAC, MAC, or UPIC – make sure the auditors are applying the correct standards. Remember, the auditors aren’t attorneys or doctors.

Program Note: Listen to Knicole Emanuel’s RAC Report live every Monday during Monitor Mondays, 10 a.m. Eastern.

Knicole C. Emanuel Esq.

For more than 20 years, Knicole has maintained a health care litigation practice, concentrating on Medicare and Medicaid litigation, health care regulatory compliance, administrative law and regulatory law. Knicole has tried over 2,000 administrative cases in over 30 states and has appeared before multiple states’ medical boards.  She has successfully obtained federal injunctions in numerous states, which allowed health care providers to remain in business despite the state or federal laws allegations of health care fraud, abhorrent billings, and data mining.  Across the country, Knicole frequently lectures on health care law, the impact of the Affordable Care Act and regulatory compliance for providers, including physicians, home health and hospice, dentists, chiropractors, hospitals and durable medical equipment providers. Knicole is partner at Practus, LLP and a member of the RACmonitor editorial board and a popular panelist on Monitor Monday.

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