For years I have counseled clients that if they enter rehab after a hospital stay that for a practical perspective they will only get 20 days of skilled cared (covered under Medicare) unless they can show they are "improving". This so-called "improvement standard" was never law, and now Medicare is changing its rules to make it clear that no such standard exists.
Why was this happening. My best guess is that most acute care facilities are in nursing homes. When you are providing "skilled care' you are covered by medicare, and the nursing home must accept the medicare rates. However, the sooner "skilled care" ends, and "companion care" begins the sooner the nursing home can get paid the private pay rate, which may be more profitable.
A quick summary care of this sweeping change from www.eldercareanswers.com:
In a major change in Medicare policy, the Obama administration has agreed to end Medicare’s longstanding practice of requiring that beneficiaries with chronic conditions and disabilities show a likelihood of improvement in order to receive coverage of skilled care and therapy services. The policy shift will affect beneficiaries with conditions like multiple sclerosis, Alzheimer’s disease, Parkinson’s disease, ALS (Lou Gehrig’s disease), diabetes, hypertension, arthritis, heart disease, and stroke.
For decades, home health agencies and nursing homes that contract with Medicare have routinely terminated the Medicare coverage of a beneficiary who has stopped improving, even though nothing in the Medicare statute or its regulations says improvement is required for continued skilled care. Advocates charged that Medicare contractors have instead used a "covert rule of thumb" known as the “Improvement Standard" to illegally deny coverage to such patients. Once beneficiaries failed to show progress, contractors claimed they were delivering only "custodial care," which Medicare does not cover.
In January 2011, the Center for Medicare Advocacy and Vermont Legal Aid filed a class action lawsuit, Jimmo v. Sebelius, against the Obama administration in federal court, aimed at ending the government’s use of the improvement standard. After the court refused the government’s request to dismiss the case, and the administration lost in a similar case in Pennsylvania, it decided to settle.
As part of the settlement, Medicare will revise its manual to make clear that Medicare coverage of skilled nursing and therapy services “does not turn on the presence or absence of an individual’s potential for improvement” but rather depends on whether or not the beneficiary needs skilled care.