It's a common-enough scenario: After joint surgery, 72-year old Mrs. Doe receives nursing and therapy services at home, paid for by Medicare. Nurses care for a surgical wound; therapists evaluate and adjust the exercises she does to restore some mobility and strength.

But after a few weeks of skilled nursing and therapy services, the home health agency through which she gets her home care decides to discontinue the therapist’s services. Why? Because while they help maintain her joint function, they are not likely to improve her condition: severe, debilitating arthritis that has left her largely homebound.

Until late last year, “improvement” was one of the criteria for continued Medicare payment of home care services. The so-called improvement standard was never officially part of Medicare home-care regulations; it was gradually adopted over time by providers and intermediaries (the organizations that pay the bills on behalf of Medicare).

In short: no improvement, no payment.

But patients and their advocates argued in court for almost two years that skilled maintenance care (to prevent a decline in function due to an illness) is crucial and that Medicare had an obligation to pay for it. In late 2012, the federal government agreed.

In November 2012, a federal judge gave initial approval to an agreement that strikes from policy manuals language about the improvement standard. And in January of 2013, the agreement became final.

Education Efforts

In addition, federal administrators will embark on a yearlong education campaign so that Medicare beneficiaries, their families, and health care providers understand the agreement and its impact.

“It is a big deal,” says Diane Omdahl, a registered nurse who recently launched 65 Incorporated, a service to help those on Medicare understand their benefits. “Agencies were denied reimbursement for care if patients didn’t show improvement. Consequently, the home health agency would become “gun shy” about accepting a client.

It’s not possible to estimate how many people with arthritis may have been denied – or simply not offered – home care because improvement was unlikely. But the federal government does keep track of home health diagnoses: In 2007, about 10 percent of all home health patients were diagnosed with arthritis (not including arthritis of the spine), and a typical patient was diagnosed with 4.2 medical conditions.

The Center for Medicare Advocacy (CMA), a national nonprofit based in Connecticut, is one of the parties that challenged in court the use of the improvement standard. CMA executive director Judith Stern estimates that because the suit was filed in January 2011, “tens of thousands” might have had care denied – and are therefore good candidates for an appeal.

She says her estimate doesn’t take into account the number of people who simply weren’t offered potentially helpful home care because agencies were worried that the improvement standard would make it difficult to get paid.

“What we’re seeing here is the tip of the iceberg,” Stern says.

Even though the improvement standard was overturned, patients should not assume all Medicare providers are up-to-date on the agreement. CMA has a free online information packet designed to help patients and caregivers understand their rights and how to deal with payors and health care providers.