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Medicare lawsuits could impact long-term-care delivery

Two recent Medicare court cases — in Pennsylvania and Vermont — may significantly change what Medicare can pay for in the home or a nursing facility. The outcomes of Papciak vs. Sebelius and Anderson vs. Sebelius have the potential to allow Medicare payments to maintain a person’s level of functioning.

The implication these cases offer is that Medicare is not just a program for people whose condition is improving, but can be used to prevent further deterioration in a person’s condition. Previously, Medicare would stop paying for a person’s home health care or nursing facility care if the person was considered “stable.” This would force seniors to pay out of their own pocket or stop receiving the care, resulting in the possible deterioration of their health.

In Papciak vs. Sebelius, a Sept. 28 ruling by a federal court in Pennsylvania claimed Medicare officials improperly denied Medicare benefits to Wanda Papciak, 81, in a skilled nursing facility.

Medicare officials had concluded that no matter how much more therapy Papciak received, she was not going to achieve a higher level of function.

After undergoing hip replacement surgery April 28, 2008, Papciak developed a urinary tract infection and was readmitted to the hospital. She was discharged June 3, 2008 to a skilled nursing facility, where she received physical and occupational therapy.

Upon Papciak’s admission to the nursing facility, she was unable to walk unassisted and could not use a walker due to numbness of her hands caused by what was later diagnosed as carpal tunnel syndrome. Papciak also had a history of cellulitis, anemia, chronic atrial fibrillation, hypertension, anxiety and depression.

Though Papciak received therapy five days a week, she made slow progress during her stay. Her therapy included physical and occupational therapy, treatment, self care and therapeutic exercises and activities.

Her initial treatment was primarily for ambulation. Medicare paid for the skilled care Papciak received from June 3 through July 9, 2008. On July 10, 2008, it was determined that Papciak no longer needed skilled care because she had made only minimal progress in some areas, had regressed in other areas, and had been determined to have met her maximum potential for her physical and occupational therapy.

As a result, Medicare denied payment from July 10 through July 19 because Papciak was only receiving “custodial care,” not the skilled nursing services required for Medicare coverage.

The proper legal standard to be applied to determine if a patient is entitled to Medicare benefits in a skilled nursing facility is whether the patient needs skilled services to enable him or her to maintain a level of functioning.

According to the Centers for Medicare & Medicaid Services Skilled Nursing Facility Manual, “The services must be provided with the expectation, based on the assessment made by the physician of the patient’s restoration potential, that the condition of the patient will improve materially in a reasonable and generally predictable period of time, or the services must be necessary for the establishment of a safe and effective maintenance program.”

A common misunderstanding about Medicare’s skilled nursing facility benefit is that the patient must show “progress” in order for Medicare to pay for care. Indeed, federal regulations state 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.”

After Medicare denied her appeal for payment, Papciak won relief from a federal district court, which stated that she needed skilled services to prevent her condition from deteriorating and to “enable her to maintain her level of functioning.”

On Oct. 25, in another case, Anderson vs. Sebelius, a federal judge ruled that Medicare improperly denied coverage to Sandra Anderson for home health services after she suffered two strokes.

Anderson began receiving home health services in 2004. She was then 60 years old and had just returned home after being hospitalized for her second stroke. She suffered from urinary incontinence, “acute, but ill-defined” cerebrovascular disease, hypertension, cognitive impairments including memory deficit, limited physical mobility, slurred speech and newly diagnosed type II diabetes. Because of her cognitive impairments and immobility, Anderson required 24-hour supervision to remain safe in her home environment.

Anderson’s doctor certified a variety of skilled nursing services for Anderson, including skilled diabetic foot care, patient education on diabetes management and a diabetic diet, overall management and evaluation of her care plan and observation and assessment of her condition.

Anderson also received physical and occupational therapy, medical social services provided by a social worker and non-skilled personal care. Her doctor approved this care for six 60-day certification periods from June 2004 to June 2005.

Although care was certified until June 2005, Anderson’s occupational therapy ended in September 2004, and she was discharged from physical therapy in December 2004.

Her Medicare intermediary covered the services Anderson received during the first certification period, but denied coverage for the remaining five periods. During a Medicare appeal, Anderson’s plea for reimbursement was denied. She then filed a federal lawsuit claiming the stability presumption violated her Fifth Amendment due process rights. Anderson argued that Medicare erred by applying this presumption retrospectively, evaluating her need for skilled services from the benefit of hindsight rather than from the perspective of the attending physician at the time the services were ordered.

The issue before Medicare was whether Anderson was in need of skilled nursing services throughout the relevant time period. Consideration is given to whether there is a likelihood of a future complication or acute episode and whether the beneficiary’s condition and vital signs are part of a longstanding pattern of the patient’s condition and there is no attempt to change the treatment to resolve them.

The judge, Christina Reiss, said, “A patient’s chronic or stable condition does not provide a basis for automatically denying coverage for skilled services: The determination of whether a patient needs skilled nursing care should be based solely upon the patient’s unique condition and individual needs, without regard to whether the illness or injury is acute, chronic, terminal, or expected to extend over a long period of time. In addition, skilled care may, depending on the unique condition of the patient, continue to be necessary for patients whose condition is stable.”

Reiss found that Medicare regulations say that “stabilization” determines the duration of skilled services, but do not negate the possibility that “skilled care may, depending on the unique condition of the patient, continue to be necessary for patients whose condition is stable.”

The federal court ruled that services must be viewed from the perspective of the condition of the patient when the services were ordered and what was, at that time, reasonably expected to be appropriate treatment for the illness or injury throughout the certification period. “The fact that skilled care has stabilized a person’s health does not render that level of care unnecessary,” Reiss said. “An elderly person need not risk a deterioration of her fragile health to validate the continuing requirement for skilled care.”

Reporting by Sondra Shapiro. Mass Home Care provided information for this story.

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