How to Integrate the End of Medicare’s “Failure to Improve” Standard into Your Clinical Practices

If a Medicare patient has achieved their maximum level of recovery, and additional therapy would not help them improve beyond that point, then additional treatment isn’t warranted or medically necessary. Plus, Medicare surely won’t foot the bill.  You, their PT, think that additional therapy would help them from getting worse, but that’s not the standard. It’s time to discharge them, right?


This lesson is important.  So important that a recent New York Times article highlighted the frequent and lingering belief of many therapists that treatments are only warranted if they will help the patient improve.  Although, maybe that just means that those therapists believe that the wouldn’t be covered by insurance.  And, more often than anyone would like, the concepts of health care and health insurance get conflated, and they can heavily influence treatment (more on that another time).

The two standards I discuss here are the Improvement Standard (for treatment to be covered, patient must be capable of improvement) and the Maintenance Standard (for treatment to be covered, it must maintain patient’s current level of function or slow the progression of their condition).

For years, Medicare recipients have seen their “maintenance therapy” coverage requests denied, as the front-line decision-makers uniformly applied the Improvement Standard to all claims.  This was in error.

Medicare 101 (just the relevant stuff).

I’m sharing Medicare facts on a need-to-know basis (i.e., I really want you to read this whole post):

Medicare is administered by the Center for Medicare and Medicaid Services (CMS). CMS has an Educational Campaign, whose purpose it is to communicate important information the contractors who make front-line patient-care decisions.

Various layers of regulation apply here:
(1) Title XVIII of the Social Security Act, which is the federal law which creates and codifies the Medicare program;
(2) the implementing regulations, known as the “CFR” (Code of Federal Regulations), promulgated by the Department of Health and Human Services through CMS; and
(3) CMS’ policies, and the policies of the contractors making coverage decisions.

What the law says:

The threshold for Medicare coverage is its medical necessity requirement: “no payment may be made … for any expenses incurred for items or services which … are not reasonable and necessary for the diagnosis or treatment of illness or injury….” (42 U.S.C. 1395y(a)(1)(A))

The federal regulations also clearly provide for a “maintenance standard.” The federal regulation provides that coverage should not be denied just because a patient may not improve:

The Medicare Benefit Policy Manual formerly stated that “skilled care may, depending on the unique condition of the patient, continue to be necessary for patients whose condition is stable.” (Internet Only Manual (IOM) 100-02, MBPM, ch. 7, §§ 20.3, 40.2).

But, it turns out that the lower level decision-makers reviewing claims rarely followed these prohibitions against the Improvement Standard and instead relied on “Local Coverage Determination” policies (LCDs).  LCDs are created by individual contractors to provide guidance to those under their jurisdiction reviewing claims, and they often includedImprovement Standard language.  For example, one LCD stated: “There must be an expectation that the condition will improve significantly in a reasonable and generally predictable period of time…” (LCD ID # L23604). Another said: “The documentation supports the expectation that the beneficiary’s condition will improve significantly in a reasonable and generally predictable period of time.” (LCD ID # L340).

As many providers know, the application of the Improvement Standard alone became common practice.  But this “rule of thumb” disregards the law, and it imposes a much stricter condition of coverage eligibility that, once denied, most patients will not appeal.

The revised CMS policy manual states that: “No ‘Improvement Standard’ is to be applied in determining Medicare coverage for maintenance claims in which skilled care is required.”

The People v. Medicare

People got angry, and some brave patients sued in Jimmo v. Sebelius.  Patients of all types brought forth their claims that they’d been denied necessary care.  CMS fought the case, but the parties ultimately entered into a settlement agreement, which the judge committed to writing.  The judge ordered CMS to take “corrective action,” and a failure to do so would land the parties back in court.

CMS changed their policy manual to state that:

[C]overage of skilled nursing and skilled therapy services … 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.

You can read the entire altered manual here: Click for manual.

CMS also initiated a “nationwide educational campaign” that was so ineffective that it did land them back in court, where the judge found that they had breached the settlement agreement by failing to convey accurate information about the maintenance coverage standard.

Back in court, the case turned on CMS’ disastrous failure to educate stakeholders about the new coverage standard. The judge ruled (in August of 2016) that “at least some of the information provided by the Secretary [of the Department of Health & Human Services] in the [CMS] Educational Campaign was inaccurate, nonresponsive, and failed to reflect the maintenance coverage standard.”  CMS has now been sternly instructed to launch an effective Educational Campaign.

Lessons for Providers:

1. If your patient’s request for coverage for therapy has been denied because they are not improving, they should appeal that decision.  The re-review form specifically applicable to confusion over this standard is available here: Click for form.

2. This doesn’t just apply to physical therapy. It applies to inpatient rehabilitation facilities, skilled nursing facilities, home health, and to outpatient therapies.

3. When a patient’s needs change from “improvement” to “maintenance,” the Medicare Benefits Policy Manual states that they must obtain a new referral.

4. A group of advocates and attorneys have organized to form the Jimmo Implementation Council. They intend to oversee the implementation of the court’s orders in Jimmo (namely the enforcement of the settlement agreement), and to hold CMS’ feet to the fire. Check out their website for updates or advice: Click here to open their site in a new window.

5. If you’re a Medicare provider, I strongly encourage you to participate in one of the CMS Education Campaign calls.  Learn about how or if this changes the way you provide care to Medicare recipients.

6. When you provide maintenance therapy to patients, PREACH its benefits to your colleagues, at conferences, on podcasts, and on your blog. Participate in research studies documenting the benefits of maintenance therapy.  Essentially, give it “good press” and support.


Read the Jimmo order enforcing the settlement agreement in Jimmo v. Sebelius, No. 5:11-cv-00017 (D. Vt. Aug. 2016) here:

Center for Medicare Advocacy, Improvement Standard Update: CMS Revises Medicare Policy to Ensure Coverage for Skilled Maintenance Care (Dec. 9, 2013),

Paula Span, Failure to Improve Is Still Being Used, Wrongly, to Deny Medicare Coverage, New York Times (Sept. 12, 2016),

Read the plaintiffs’ complaint in Jimmo v. Sebelius, No. 5:11-cv-00017 (D. Vt. Jan. 18, 2011)) here:

CMS, MLN Matters No. MM8458 (Revised), Manual Updates to Clarify…Coverage Pursuant to Jimmo v. Sebelius,

This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.

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© 2016 Jackson LLP

Erin K. Jackson is Jackson LLP’s Managing Partner. She is responsible for all aspects of firm management, is a sought-after speaker for healthcare conferences, and is a published author. She is specifically focused upon the intersection of the patient experience in healthcare with the legal and ethical responsibilities of providers. 

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