HEARING - U.S. Senate Special Committee on Aging

132
10,930 New Developments tI.PZ ;5A
is unrealistiec ii cxjlet the 'erretary to ttonider substantial rhanges in thrierret adminitn sratiVe
review sstem at the hchsi't of iangle heneficiary.
Sect I 13.;40.035.
Medicare Part A coverage-Extended care serviee-Slkilled physical therapy-Sufflciency
of coverage.-The S9ecretary ,t HIllS's practice of dcnying skilled physcal theorapy henefits
under Part A of Medicare on the basis of arbitrary presumprsits or "ruies of thumnl violates
Medicare statutes and regulations, and the Due Process Clause of the U.S. Constitutitn. Under the
Secretary's procedures, as outlined in the Medicare Intermediary Manual. intermediaries actually
awarded coverage to only a small number of patients who demonstrated a rapid recovety of hody
functions, and even those patients generally received no more than two weeks of coverage.
The applicable regulations and the relevant portions of the Manual clearly contemplate that
each patient will receive an individualized assessment of his need for daily skilled physical therapy.
based aos the facts and circumstances of his particular case, It is contrary to the regulations for an
ntermediary to deny benefits on the basis of informal presumptions or rules of thumb that are
atprtied acrrtsa the board withoust regard to the medical conditions or therapeutic requirements of the
jndividual patien. Therefore, the Secretary is enjoined from using arbitrary and inflexible practices
in determining a patient's entitlement to physical therapy coverage and is further required to give
an individualizetd evaluation of eaich ptieitnt's medical condition and therapeutic needs.
Seel 1325.
[Text of Decisionj
vices are covered under Part A of Medicare only
Intsroductions
if the patient receives "skilled nursing care ...
or other skilled rehabilitation services, which as
CABERANEs, District judge: This action chalt- a practical matter can only be provided in a
5enges practices and procedures that allegedly skilled nursing facility on an inpatient ba-si
have been used by the Secretary of the United 42 U-SC J 1395(aX2XC).
States Department of Health and Human Services
("the defendant" or "the Secretary"), to The Secretary may contract with private
deny Medicare benefits for physical therapy to a organizations (known as 'fiacal intermediaries")
ceried cbass of elderly Connecticut residents for aissistance in the administration o the Medi-
('the plaintiffs").1' ~care Act.3 'he intermediaries determine the
p(sintiffs". Pamount of Medicare reimbursement payable to
The plaintiffs contend that the defendant's SNFs and other service providers. 42 U.S.C.
btased procedures for reviewing Medicare claimsn 1395h(a). See generally Kraemer vI Heckler,
sand his practice of routinely denying Medicare 7 Fld 214 214-217 (2d Cir 1984) ("Kraecoverage
for certain categories of physical ther- jwr') (general description of Medicare pro
spy rendered by skilled nursing facilities gram). A decision by an interredisry denying
("SNFa") violate their rights under Part A o coerge under Pars A of the Medicare Act is
Title XVIII of the Social Security Act ("the aubjecttoadministrtiveand judicial review 42
Medicare Act"), 42 U.S.C. I 1395-1395, and USC ,1395ff
the Due Process Clause of the Fifth Amendment
to the United States Constitution. The Medicare The plaintiffs request that the court enjoin
Act entitles members of the plaintiff class to and declare illegal the defendant's methods for
payment of the "reasonable and necessary" determining eligibility for physical therapy covcosts
of ° thoapital extended care services fo erage under Par A of Medicare and impose a
to Ifdys during any spell of illness," 42 new set of procedures in their place. In addition,
SC. I I 1395d(aX2), 1395y(s)X). These ser- the plaintiffs ask that the defendant be required
Siac the Wa ofit this aink, the sme at the dept- Ringer. 466 U.S 602 OfW) ("Rise) in odner is Meet
set woic the defedasis b Seresry hsu bmen chasid tbe nasaw bte jsrisldieesl mqeiertmi oa 42 U SC.
is the United States Det1naminat of Heti sod lorian *4Ot5t). a eba amust hoae been pnised is the SeKe'
Servica("tIIIH)e
ary), Se fPtitifts Umppwsed Motiona he hotdtrtioa df
27he original tclb consisted of '.11 Com a U tChla efisitiat ftied Aprl 19. I3 ad granted Apeit 2Z
heaeteim~~~~~~In MsLWC 56k a she COAtia ', vamaski. 442 U.S WS2 Rit
wheA eiissaaat to the 5ticiK and prwtka d the defendant (19791 (fu srtias istintsinable ptrtsat to 42 USC.
wth ans cha^ngesd hemi. haw bee a wint tX e 1140Otts)-sones taShet m shpatthrdcist itted to
Idestiea Pasn A estended care eonaie tar phyrical the- tINK ste meet the etntfrlta td Ithat siol"
spyb siat eeheltitatit service sand whale ls'eelw t t
tueat tn wmeiery am less thea Sl t~ See ftla S t
fMelieh fer Clais nirttatlise tstled My S. t96 Ra~ting 5 Tocr fiscal intertndiarien sdaie the Mediare Act
esDetesatt'5 Mclass for Summnatry jestgmst fl ted A tttIn Caeticatt. See Cetifiet!d Otfiil Trmsreipt ot Trial
9, lOSS) ("J3 smtaiiy Jadersest llang") at t5 ni. Byrea ('Tr.L") et 201. Secosa the iatrsdisres r ageants the
est d1 the, pntest the driiltom at he pleistitf lassas deWeadant. their practircs see legilly imrtaia to ideta
es asnroid by dektetim at Ite widt "ar writ te h as*a datL See lnaemer Y. Heekkr 737 F2d 214, 215 1Zd Cir.
r d 3s the 7 batdng ad the Ssixm CCOls is Heler V, 154n'ouseIfct
35,374 .lA Conec ltrigHua n