On October 16, 2012, representatives of the parties in the nationwide class action lawsuit styled, Glenda Jimmo, et. al vs. Kathleen Sebelius filed a proposed legal settlement with the chief judge of the Federal District Court in Vermont in an effort to resolve the lawsuit.  If finalized, the settlement would affect thousands of people with chronic conditions and disabilities who are potentially having issues currently qualifying for Medicare coverage of home health care, skilled nursing home stays and outpatient therapy because they are required to show a likelihood of medical or functional improvement before Medicare would pay for the services.

Under the lawsuit, plaintiffs alleged that the U.S. Department of Health and Human Services, Medicare contractors, and administrative review boards were arbitrarily limiting coverage for patients who did not show long-term improvement in their conditions, even though CMS regulations provide that these services should be covered.  Pursuant to the proposed settlement, Medicare will pay for the services at issue if they are needed to “maintain the current condition or prevent or slow further deterioration,”—and the patient would not be required to show that their condition is likely to improve.

If implemented, the changes will apply to the traditional Medicare program and to private Medicare Advantage plans.  They apply to people 65 and older, as well as to people under 65 who qualify for Medicare because of disabilities. The proposed settlement is available here.