(Updated 9:30am on Oct. 24)

A proposed settlement to a class-action lawsuit could make collecting reimbursement easier when providing medically necessary services to maintain patients’ abilities or slow their progression of decline.

The Obama administration has agreed to change its Medicare coverage rules to allow for services needed to “maintain the patient’s current condition or prevent or slow further deterioration,” according to a New York Times article. Medicare previously required beneficiaries to show improvement before paying for nursing and therapy services.

Update: In early reactions, industry stakeholders are cheering the impact of the decision on chronically ill patients, but many express concern about how the government will pay for the coverage expansion.

The ruling opens up the Medicare program to significant cost pressures, says Ann Rambusch, president of Rambusch3 Consulting in Georgetown, Texas. Medicare home health is intended to be an intermittent benefit, and the program’s current funding doesn’t prepare it for ongoing services of the kind envisioned in the ruling.

As a result of those new cost pressures, CMS may turn to a home health copay as a way to cover any funding gaps, believes Michelle Mantel, quality assurance manager at Gentiva Health Services’ South Central Florida location in Plantation.

The settlement, submitted last week to the chief judge of the Federal District Court in Vermont, is expected to be approved and could be enforced for up to four years, the article states.

Originally reported in Home Health Line, here are three examples of plaintiffs denied home health services or coverage:

Glenda Jimmo is legally blind and has diabetes mellitus, peripheral vascular disease and several other chronic conditions. Jimmo had a below-the-knee amputation and was taking more than 20 medications, according to the complaint. Her physician ordered skilled nursing and home health aide services. But claims for home health services between Jan. 14, 2007, and Jan. 8, 2008, were denied at the initial contractor level and on appeal. An appeals council ruled Dec. 28, 2010, that the services were not covered because "the beneficiary was stable."

Plaintiff KR suffered from quadriplegia, epilepsy, depression and a significant mental impairment, the complaint states. She required a wheelchair or walker and the assistance of at least one person to leave her home. KR's physician ordered physical therapy services, but the claims for those therapy services have been denied. An administrative law judge ruled the therapy was not covered by Medicare because "the services must be provided with an expectation that the condition of the patient will improve materially."

Edith Masterman is a paraplegic. Over the past 10 years, she developed chronic pressure ulcers, according to the complaint. Androscoggin Home Care & Hospice in Lewiston, Maine, provided wound care for Masterman until she was hospitalized for a skin graft in 2009. After the hospitalization, Androscoggin refused to take Masterman back on service, arguing that "Medicare will not pay for a chronic problem." Masterman receives home health aide services from Elder Independence of Maine in Bangor. Those services are paid for by Medicaid.

For more about this developing story, stay tuned to Home Health Line.