A proposed settlement has been reached between CMS and the plaintiffs in a national class action involving the denial of benefits to chronically ill and disabled Medicare beneficiaries. Many of these patients have had skilled nursing and therapy care denied on the grounds that they cannot show a likelihood of improvement or increase in functional capability.

While CMS has denied that any “improvement standard” exists, CMS has agreed under the proposed settlement to revise relevant portions of the Medicare Benefit Policy Manual (MBPM) to clarify the coverage standards for the skilled nursing facility (SNF), home health (HH), and outpatient therapy (OPT) benefits, as well as for services in an inpatient rehabilitation facility (IRF). Specifically, these revisions will clarify...