Jimmo v Sebelius: Medicare Cannot Deny Coverage Just Because Your Parent Stopped Improving

The SNF tells your family that Medicare is ending coverage because your parent has "plateaued." They are no longer making measurable progress in physical therapy. The implication: since they are not getting better, skilled care is no longer necessary.

This is wrong. The Jimmo v. Sebelius settlement established definitively that Medicare cannot deny coverage simply because a patient is not improving.

What the Improvement Standard Was

For decades, Medicare contractors and skilled nursing facilities applied an unofficial "improvement standard" to coverage decisions. If a patient was not making measurable progress toward recovery — if their condition had stabilized or was declining — contractors denied coverage on the grounds that skilled care was no longer needed.

This standard was never written into Medicare law. It was a widespread administrative practice that resulted in systematic denials of care for patients with chronic, degenerative, or slowly progressive conditions — exactly the patients who need ongoing skilled nursing or therapy the most.

What Jimmo Changed

The Jimmo v. Sebelius settlement (2013) was a landmark class action brought on behalf of Medicare beneficiaries who were denied skilled care under the improvement standard. The settlement, approved by the U.S. District Court for the District of Vermont, established two critical principles:

1. Coverage is based on the need for skilled care, not on the patient's potential for improvement. Medicare must cover skilled nursing and therapy services when they require the skills of a qualified professional — regardless of whether the patient is expected to get better.

2. Maintenance therapy qualifies for coverage. Skilled services designed to maintain a patient's current functional level, prevent decline, or slow the progression of a condition are covered. A patient who needs skilled physical therapy to avoid losing the ability to walk qualifies for coverage, even if they will never walk better than they do today.

How This Applies to Observation Status Situations

Families dealing with observation status often face a double barrier: first, the observation classification blocks the three-day qualifying stay for SNF coverage; second, even if coverage is obtained, the SNF may try to terminate it early by citing the improvement standard.

If your parent's SNF coverage is being terminated because they have "plateaued":

1. Request the specific clinical reason for the denial in writing. The facility must explain what criteria they are using.

2. Cite the Jimmo settlement explicitly. State: "Under the Jimmo v. Sebelius settlement, Medicare cannot deny coverage based on an improvement standard. My parent requires skilled services to maintain their current functional status and prevent decline. This is covered under Medicare."

3. Request documentation from the treating therapist. Ask the physical or occupational therapist to document that your parent's care requires the skills of a trained professional — even if the goal is maintenance rather than recovery.

4. File an appeal if coverage is terminated. Use the standard Medicare appeals process, starting with a Level 1 redetermination to the MAC within 120 days.

The Persistence Problem

Despite the 2013 settlement, the improvement standard persists in practice. CMS has issued multiple manual updates and educational campaigns instructing Medicare contractors and providers to stop applying the standard, but studies show that many facilities and claims reviewers continue to use it.

Families need to be prepared to cite the Jimmo precedent directly — and to escalate through the appeals process if the initial denial stands. The legal ground is firmly on your side.

When to Combine With an Observation Appeal

If your parent's SNF coverage was denied because of the three-day qualifying stay (an observation status issue) and the SNF is also threatening to terminate care because of lack of improvement, you may need to fight on two fronts simultaneously:

• Observation status appeal to restore the qualifying inpatient days
• Jimmo-based appeal to prevent early termination of SNF benefits

The Medicare Appeals and the Observation Status Trap toolkit covers both scenarios, including Jimmo-specific appeal language and a template for documenting the need for maintenance-level skilled care.

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