Patient advocates launch Medicare class action lawsuit

Last May, 17 Democratic lawmakers led by Rep. Joe Courtney (D-Conn.) wrote a letter to the Medicare agency arguing that the improvement standard is illegal and urging the agency to clarify its reimbursement policies. The agency's claims are processed by private subcontractors, many of whom require improvements in patient conditions and deny coverage to thousands of people every year as a result.

"Medicare coverage determinations should not be based on whether the patient's underlying condition is likely to improve," the lawmakers wrote. "In fact, federal regulation actually states the opposite."

The Centers for Medicare and Medicaid Services officially agrees that coverage approval, generally speaking, should depend on a service being reasonable and medically necessary. In the case of therapy services, that means that the individual needs the type of services that require the assistance of or supervision by a skilled professional.

"We have not yet had a chance to review the complaint, and therefore are not in a position to comment on the lawsuit," said a CMS spokesperson.

This fall two federal courts, in Pennsylvania and Vermont, ruled that beneficiaries don't have to meet the improvement standard in order to qualify for skilled nursing care and home health services. The rulings in those lawsuits, however, only applied to the individuals who brought them and not to all beneficiaries.

The new lawsuit seeks to have the court certify a national class, which would make its ruling mandatory with regards to people in similar circumstances. The administration has 60 days to respond.

Stein's group launched an advocacy and education campaign on the issue in October 2009 but held off on a class action suit until now because it was trying to work with the Obama administration to resolve the issue. The administration has been receptive to beneficiaries' concerns, Stein told The Hill - she said federal regulators this fall "dramatically improved" proposed regulations regarding home care therapy services - but has not gone far enough.

"We need the policies at all levels cleared up," Stein said. "It's not resolved sufficiently, and people are injured all the time."

This post was updated at 6 p.m. with comment from CMS