Settlement Officially Ends So-Called Improvement Standard

​The Centers for Medicare and Medicaid Services (CMS) will be obligated to update its policy manuals and officially eliminate the so-called improvement standard, according to a settlement agreement between the U.S. Department of Health and Human Services (HHS) and a Medicare beneficiary. The settlement, originally reached in October 2012 and approved January 24, 2013, concludes a lawsuit originally brought in January 2011 in which the plaintiff alleged that CMS denied payment to the skilled nursing facility for treatment and services necessary to maintain her chronic condition that was unlikely to improve. According to the plaintiff, CMS applied an "improvement standard," reimbursing only for care, treatment, or services that led to improvements in residents' conditions and disregarding an individualized assessment of residents' conditions to determine whether treatment was reasonable.