The Jimmo Settlement Agreement and Medicare coverage for skilled nursing and therapy services

The Centers for Medicare & Medicaid Services (CMS) is requiring Medicare Advantage (MA) plans to educate and remind providers about the Jimmo Settlement Agreement (January 2013) as it affects all MA plans, because these plans provide Medicare-covered therapy services. 

This web page serves as a provider resource and training guide. All Priority Health-contracted providers of these services are required to understand the information on this page.

Affected provider services

The Jimmo Settlement Agreement is consistent with Medicare program regulations governing maintenance nursing and therapy provided in the following settings:

  • Skilled nursing facilities
  • Home health
  • Outpatient therapy (physical, occupational, and speech) 
  • Inpatient rehabilitation hospitals

What is the Jimmo Settlement Agreement? 

The Jimmo Settlement Agreement was created based on the settlement of the Jimmo v Sebelius case. Read the Jimmo v Sebelius Settlement Agreement Fact Sheet (linked under Provider education resources, below) for more details on the case.

The Agreement clarified that, provided all other coverage criteria are met, the Medicare program covers skilled nursing care and skilled therapy services under Medicare skilled nursing facility, home health, and outpatient therapy benefits when a beneficiary needs skilled care in order to:

  • Improve function
  • Maintain function 
  • Prevent or slow a decline or deterioration   

The Jimmo Settlement Agreement also required Medicare Benefit Policy Manual  revisions to restate a "maintenance coverage standard" for both skilled nursing and therapy services. The revisions are linked below.

Skilled nursing care coverage

Skilled nursing services are covered where such skilled nursing services are necessary to maintain the patient's current condition or to prevent or slow further deterioration, so long as the beneficiary requires skilled care for the services to be safely and effectively provided.

Skilled therapy services coverage

Skilled physical, occupational and speech therapy services are covered when an individualized assessment of the patient's clinical condition demonstrates that the specialized judgment, knowledge, and skills of a qualified therapist ("skilled care") are necessary for the performance of a safe and effective maintenance program. 

The need for skilled vs. unskilled care determines coverage

According to the CMS FAQ document (linked in Education resources, below), question 4: "Skilled care may be necessary to improve a patient's current condition, to maintain the patient's current condition, or to prevent or slow further deterioration of the patient's condition ... . An individualized assessment of the beneficiary's medical condition and the reasonableness and necessity of the treatment, care, or services is required to determine coverage. Coverage for skilled care under these benefits is not available where the beneficiary's care needs can be addressed safely and effectively through the use of unskilled personnel or caregivers."

Determining when "skilled services" are necessary

CMS addressed this in the FAQ document (linked in Education resources, below), question 5. In summary: Coverage is available only when the complexity of the services requires the skills of a registered nurse or therapist, or when the member's medical condition requires the skills of such a skilled practitioner to perform the service that would otherwise be considered non-skilled. However, if the individualized assessment does not demonstrate this need and care can be provided safely and effectively by the member or unskilled caregivers, such maintenance services are not covered under Medicare skilled nursing, home health or outpatient therapy benefits. 

Documentation requirements

CMS addresses this in the FAQ document (linked in Education resources, below), question 8. The revised Chapters 1, 7, 8 and 15 in the Medicare Benefit Policy Manual include information on what documentation is required.  

Sufficient documentation must be in the member's medical record "to substantiate that skilled care is required, that it was in fact provided, and that the services themselves are reasonable and necessary, thereby facilitating accurate and appropriate claims adjudication."

For services needing prior or concurrent authorization, documentation in support of the necessity and justification for skilled care is required including but not limited to individualized treatment plans. Services not requiring specialized skilled care/services will not be authorized.

Provider education requirements

Contracted providers offering skilled nursing, home health, outpatient therapy and inpatient rehabilitation services must make their nursing, skilled (PT, OT, speech) therapy and case management staff aware of the requirements and clarifications of the Jimmo settlement as found in the revised manuals. See Manual links below.

Providers should specifically ensure that staff adheres to CMS documentation requirements to ensure that there is sufficient clinical evidence of the need for skilled care in the medical record. 

This education requirement can be accomplished through:

  • Updating staff through written internal communications
  • Staff training or meetings  
  • Other venues available to the provider

This page may be used for these meetings or trainings.

Providers should document how and when staff are educated on the Jimmo clarification for Priority Health Medicare auditing purposes. 

Medicare Benefit Policy Manual revisions

CMS has revised the following chapters of the Medicare Benefit Policy Manual:

Chapter 1, Inpatient Hospital Services Coverage Under Part A, Sections 110.2-110.3

Chapter 7, Home Health Services, Sections 20.1.2, 30.1.2, 40.1, 40.1.1,;;; 40.2, 40.2.1-4; 40.2.4;,

Chapter 8, Coverage of Extended Care (SNF) Services Under Hospital Insurance, Section 30, 30.2.1, 30.2.2,; 30.2.3,; 30.3, 30.4,, 30.4.2, 30.4.3, 30.6-7.

Chapter 15, Covered Medical and Other Health Services, Sections 220, 220.1.1-2, 220.1.4, 220.3, 230.2, 230.5

Provider education resources

Under the Jimmo Settlement Agreement, CMS must provide education to providers. To meet this requirement, CMS provides summary information about the manual clarifications and other related topics:

More information

CMS has developed a special topic web page specific to the Jimmo Settlement Agreement.

If you have questions

Home health care providers: Call Medicare Customer Services at 888.389.6648.

Therapy/skilled nursing providers: Call the Provider Helpline at 800.942.4765, option 2.