Medicare Too Strict: Two Courts Limit the “Improvement Standard” in SNF, HH


By Stephanie Yamkovenko

In January 2011, five national groups filed a class action lawsuit against the Department of Health and Human Services about a Medicare policy that requires a beneficiary to exhibit “demonstrable improvements” to qualify for skilled nursing care and physical, speech, and occupational therapy.

The Centers for Medicare & Medicaid Services (CMS) has recently been more aggressive in using the so-called “improvement standard” to deny coverage to beneficiaries in skilled nursing facilities and home health care if continued access to those services will not improve the person’s ability to perform routine activities of daily living.

“That’s not in the law. It’s an urban legend,” said Representative Joe Courtney (D-CT) in the New York Times of the improvement standard. “People with chronic conditions are being denied care in the mistaken belief that Medicare requires improvement of a person’s condition as a prerequisite for coverage.”

Last year, Courtney and 16 other lawmakers wrote a letter to CMS arguing that the improvement standard is illegal. Private subcontractors process Medicare claims and many of them require improvements in client conditions, and therefore deny coverage to thousands of people every year.1

Within 1 month of each other, two federal district courts ruled that this standard is unsupportable under Medicare statute and regulations and creates high standards for CMS to follow before denying care. The federal judges in the cases carefully examined the improvement standard, also known as “stability presumption” in home health cases, and their rulings now set a high standard for appropriate and timely evidence before CMS can deny coverage or challenge the judgment of a prescribing physician retroactively.

These rulings may be significant to Medicare beneficiaries with chronic conditions like Alzheimer’s disease or diabetes. Medicare should cover skilled services even if the person’s condition is stable, if skilled services will prevent further deterioration or other problems.

“Although the improvement standard still stands—and is in law—with regard to outpatient therapy, using improvement as the definitive requirement to receive home health or skilled nursing home care has been criticized in recent years as being just too restrictive,” said Christina Metzler, AOTA’s Chief Public Affairs Officer.

In one of the court cases, 81-year-old Wanda Papciak was receiving occupational therapy, physical therapy, and skilled nursing care in a nursing home after hip replacement surgery. CMS terminated coverage after 5 weeks because her condition had not improved and was unlikely to do so. The federal district court in Pittsburg reversed CMS’ decision and argued that Papciak needed the skilled services to “maintain her level of functioning” and prevent her condition from continuing to deteriorate.

“Part A Medicare only covers 100 days of nursing home care, but Papciak had only received about half of that,” said Metzler. “What usually happens is that the person must move to private payment or Medicaid. But what the court is really saying is that if Medicare covers 100 days, beneficiaries are entitled to that.”

The court also said that CMS must look carefully at the record and quoted notes from therapists, which is another reason for occupational therapy practitioners to be very clear and specific in documentation, according to Metzler.

The second case involved 66-year-old Sandra Anderson, who had two strokes and was denied coverage for certain home health services. The federal district judge in Vermont ruled that Anderson needed home health care to prevent deterioration of her functional ability.

The decisions made in these two court cases reject the “improvement standard” and demonstrate that the current practice of denying coverage for skilled nursing home care and home health services for people with chronic conditions does not comply with Medicare law and regulations. CMS formally claims that the improvement standard does not exist, but for the past 25 years a host of court decisions rejecting the applied standard is evidence of the agency’s reliance on it.2

“If you have clients or anyone you know who have been affected by this standard, please e-mail AOTA at,” says Metzler. “We will not tolerate CMS denying care to occupational therapy clients based on these standards.”

Stephanie Yamkovenko is AOTA’s staff writer.


1. Pecquet, J. (2011, January 18). Patient advocates launch Medicare class action lawsuit. Retrieved January 21, 2011, from

2. Center for Medicare Advocacy, Inc. (2010, December 2). Two federal courts reject “improvement standard” for denying Medicare coverage. Retrieved December 8, 2010, from