DealBook: As Unit Pleads Guilty, R.B.S. to Pay $612 Million Over Rate Rigging

LONDON – The Royal Bank of Scotland on Wednesday struck a combined $612 million settlement with American and British authorities over accusations that it manipulated interest rates, the latest case to emerge from a broad international investigation.

In an embarrassing blow to the bank, its Japanese subsidiary also pleaded guilty to criminal wrongdoing in its settlement with the Justice Department. The R.B.S. subsidiary, a hub of rate-rigging activity, agreed to a single count of felony wire fraud to settle the case.

The settlement reflects the Justice Department’s renewed vigor for punishing banks ensnared in the rate manipulation case. In December, a Japanese subsidiary of UBS pleaded guilty to felony wire fraud as part of a larger settlement, representing the first unit of a big bank to agree to criminal charges in more than a decade.

As authorities built the R.B.S. case, they seized on a series of incriminating yet colorful e-mails that highlighted an effort to influence the rate-setting process, a plot that spanned multiple currencies and countries from 2006 to 2010. One senior trader expressed disbelief at reaping lucrative profits from the scheme, saying “it’s just amazing” how rate “fixing can make you that much money,” according to the government’s complaint. Another trader, after pressuring a colleague to submit a certain rate, offered a reward of sorts: “I would come over there and make love to you.”

In a statement on Wednesday, the American regulator leading the case slammed the bank for manipulating benchmarks like the London Interbank Offered Rate, or Libor. The regulator, the Commodity Futures Trading Commission, noted that R.B.S. employees “aided and abetted” other banks in the rate-rigging scheme and continued to run afoul of the law, though more covertly, even after learning of a federal investigation.

“The public is deprived of an honest benchmark interest rate when a group of traders sits around a desk for years falsely spinning their bank’s Libor submissions, trying to manufacture winning trades. That’s what happened at R.B.S.,” David Meister, the enforcement director of the commission, said in the statement.

Libor Explained

The settlement represents the latest setback for Royal Bank of Scotland, which has struggled to shake the legacy of the 2008 financial crisis. The British firm already has put aside $2.7 billion to compensate customers who were inappropriately sold loan insurance over recent years. On Jan. 31, British regulators also called on the bank and other local rivals to review the sale of interest-rate hedging products after more than 90 percent of a sample were found to have been sold improperly.

The broader rate-rigging case has centered on how much the Royal Bank of Scotland and a dozen other banks, including Citigroup and HSBC, charge each other for loans. Such benchmarks, including Libor, help determine the borrowing costs for trillions of dollars in financial products like corporate loans, mortgages and credit cards.

But the Royal Bank of Scotland, like many of its competitors, corrupted the process. Government complaints filed over the last year outlined a scheme in which banks reported false rates to lift trading profits and deflect concerns about their health during the crisis.

Authorities filed the first Libor case in June, extracting a $450 million settlement with the British bank Barclays. In December, UBS agreed to a record $1.5 billion settlement with European regulators, the Justice Department and the American regulator that opened the case, the Commodity Futures Trading Commission. The Justice Department’s criminal division, which secured the guilty plea from the bank’s Japanese unit, also filed criminal charges against two former UBS traders.

Some of the world’s largest financial institutions remain caught in the cross hairs of the case. Deutsche Bank has set aside an undisclosed amount to cover potential penalties.

While foreign banks have received the brunt of the scrutiny to date, an American institution could be among the next to settle. Citigroup and JPMorgan Chase are under investigation.

The Royal Bank of Scotland case represents the second-largest fine levied in the multiyear investigation into rate manipulation.

The Justice Department imposed a $150 million fine as part of a deferred-prosecution agreement with R.B.S., while the trading commission’s financial penalty reached $325 million. The Financial Services Authority, the British regulator, also levied a £87.5 million ($137 million) fine against the firm, one of the largest financial penalties ever from British authorities.

R.B.S., based in Edinburgh, had aimed to avert the guilty plea for its Japanese subsidiary. But the Justice Department’s criminal division declined to back down, and the bank had little leverage to push back. If it had balked at a plea deal, the Justice Department could have moved to indict the subsidiary.

“Like with Barclays and UBS, the settlement with R.B.S. is much more than a slap on the wrist,” said Bart Chilton, a commissioner at the trading commission who is a critic of soft fines on big banks.

In the wake of the settlement, Royal Bank of Scotland is shaking up its management team as it moves to repair its bruised image. John Hourican, the firm’s investment banking chief, resigned on Wednesday, and agreed to forgo some of his past compensation.

Royal Bank of Scotland, in which the government holds an 82 percent stake after providing a $73 billion bailout in 2008, also plans to claw back bonuses totaling $471 million to help pay for the rate-rigging penalty.

“We condemn the behavior of the individuals who sought to influence some Libor currency settings at our bank from 2006 to 2010. There is no place at R.B.S. for such behavior,” Stephen Hester, the bank’s chief executive, said in a statement on Wednesday. “Libor manipulation is an extreme example of a selfish and self-serving culture that took hold in parts of the banking industry during the financial boom.”

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IHT Rendezvous: IHT Quick Read: Feb. 5

NEWS Gen. Moisés García Ochoa was blocked from becoming defense minister of Mexico after American officials expressed their concern that he had ties to drug traffickers. Ginger Thompson reports from New York, Randal C. Archibold from Mexico City, and Eric Schmitt from Washington.

On Monday, confirming what many historians and archaeologists had suspected, a team of experts at the University of Leicester concluded on the basis of DNA and other evidence that the skeletal remains were those of King Richard III, for centuries the most reviled of English monarchs. John F. Burns reports from Leicester, England.

In a major victory for feminists and the rule of law, a Beijing court has granted a woman a divorce on grounds of abuse and made history by issuing a three-month protection order against her ex-husband — a first in the nation’s capital, Beijing, according to lawyers and the Chinese media. Didi Kirsten Tatlow reports from Beijing.

The Thai government faces the quandary of what to do with all the creatures it has saved — a sort of Noah’s ark of endangered species. Thomas Fuller reports from Khao Pratubchang, Thailand.

A strike by garbage collectors in Seville, Spain, is entering its second week and threatening to turn into a health and safety issue in one of Spain’s most touristic cities. Raphael Minder reports from Seville, Spain.

Days ahead of a summit meeting where leaders of the European Union’s 27 member states are to wrestle again with a proposed seven-year budget, a spokesman for the bloc’s executive body was forced to defend the salaries of some officials. James Kanter reports from Brussels.

It was only a few years ago that some economists were arguing that Europe was “decoupling” from its long dependence on trade with the United States, but German carmakers proved otherwise. Jack Ewing reports.

FASHION This month Natalie Massenet, the founder of Net-a-Porter and Internet guru to the fashion world, will throw her might behind London Fashion Week. Suzy Menkes reports from London.

ARTS Song Dong gathered multitudes in Hong Kong and asked them to help complete his autobiographical “36 Calendars” project. Joyce Lau reports from Hong Kong.

SPORTS A 19-month investigation found that criminal groups had infiltrated European and international soccer with hundreds of people involved in match-fixing, global law enforcement officials said. Sam Borden reports.

It would be naïve to believe that soccer is beyond corrupting, or to doubt that the allegations by police investigators in the Netherlands on Monday are anything but the smallest ripples on an enormous global pond. Rob Hughes reports from London.

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Gadgetwise Blog: Q.& A.: Fixing Incorrect Photo Dates

Why do my pictures have the wrong dates on them when I transfer them from the camera to the computer with the Picasa program?

One reason may be that the date and time settings on the camera were incorrect when the photos were taken. When you snap the shutter, a digital camera records more than just the image; it also embeds other data into the photo file.

This information includes the date, time, image dimensions and name of the camera manufacturer. If the camera’s own date setting is incorrect, it will write the wrong time in the photo file. (Google has more information about viewing a photo’s embedded data in Picasa on its site.)

To fix the problem for future photos you take, go into your camera’s settings menu and correct the date and time. For the photos you have already imported into Picasa 3.5 and later, select the pictures with the incorrect dates in a folder or album, go to the Tools menu and choose “Adjust Date and Time.” Enter the correct information in the New Photo Date area and click O.K.

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The New Old Age Blog: In Blended Families, Responsibility Blurs

Every year, Fran McDowell waited for the summer week when she would sing in a choral festival in the North Carolina mountains, then spend a few days in a lakeside cabin with close women friends.

That getaway grew more complicated to arrange — but perhaps more necessary — after her husband, Herb Beadle, was diagnosed with Alzheimer’s disease. They had a “gloriously happy” marriage — her first, his second — for 11 years, and she was more than willing to care for him in sickness as in health. But he could no longer manage alone in their Atlanta home.

For a few years, other family members pitched in to allow Ms. McDowell her cherished vacation. Eventually, though, she had to ask her husband’s daughter, a medical professional in another state, to take him into her home for a week.

She said no, then yes. Then, the day before Ms. McDowell was to drive him there, her stepdaughter again refused, leaving no time for alternate arrangements. If this had been her biological child, “I would have said, ‘Come on, don’t do this to me,’” Ms. McDowell said. Instead, reluctant to make waves, she canceled her trip.

“I think confrontation is riskier for stepparents,” she told me. “I was the compliant one who would bite my tongue rather than say what I thought.”

Ms. McDowell never told her stepdaughter, or anyone in the family, how angry and disappointed she was, or how difficult it was becoming to care for their father, who died three years ago at 86. She told the members of her dementia caregivers support group instead.

It was that group’s leader, Moira Keller, who e-mailed me to suggest this topic. A clinical social worker with the Sixty Plus program at Piedmont Atlanta Hospital, she wrote that “one of the biggest challenges I have is blended families in later life.”

Though I’ve written about the way the 1970s’ spike in divorces could complicate caregiving for adult children — more households to sustain, more siblings to either help or hinder — I hadn’t considered the impact on the older people themselves.

But Ms. Keller seems to be onto something. “The generation most likely to have stepchildren” — the boomers — “don’t need much care yet,” said Merril Silverstein, a Syracuse University sociologist co-editing a coming issue of the Journal of Marriage and the Family on stepfamilies in later life. “The crunch will come in 10 or 20 years.”

Initially, many adult children whose divorced or widowed parents remarry seem delighted, Ms. Keller said when we spoke. “They’re thrilled that Mom or Dad isn’t alone,” she said. “It’s a wonderful thing — until somebody gets sick.”

Then, she has found, “it gets really blurry. Who’s going to do what?” Grown children don’t have much history with these new spouses; they often feel less responsibility to intervene or help out, and stepparents may be unwilling to ask. Perhaps it’s unclear whether children or new spouses have decision-making authority.

“Older couples in this situation fall through the cracks,” Ms. Keller said.

Research shows that the ties which lead adult children to become caregivers — depending on how much contact they have with parents, how nearby they live, how obligated they feel — are weaker in stepchildren, Dr. Silverstein said. Money sometimes enters the equation too, Ms. Keller added, if biological children resent a parent’s spending their presumed inheritance on care for an ailing stepparent.

Adela Betsill, another of Ms. Keller’s support group members, married her longtime partner five years ago — her second marriage, his third. She has since given up her interior design business to care for Robert who, at 72, has also developed Alzheimer’s disease. His two children have had little involvement — perhaps because she’s just 49 and presumed able to handle everything.

Thus, though Robert’s son works from an office in their home, if Ms. Betsill needed to go out and asked him to remind his father to eat lunch, “he might, or he might not,” she said. “I don’t think he realizes it’s a burden.” So she has not asked.

Would it be different if she were his biological mother and he saw her wearing out under the strain? She thinks so, but it’s hard to know. After all, biological families also experience plenty of conflict and avoidance as elders age.

Still, that sense of reciprocity we often hear from caregivers — she took care of me when I was young, so I need to help out now that she’s old — doesn’t apply in late-life stepfamilies. Ms. Betsill didn’t raise this man, or his half sister.

Older couples who marry or remarry often discuss their finances, Ms. Keller has found. (An elder attorney, Craig Reaves, discussed the legal consequences here.) But illness and dependence may prove even more difficult subjects to broach.

“If I could yell one thing from a mountaintop,” Ms. Keller said, “it’s to talk about this stuff, too. Who’s going to take care of you if you become sick? Talk about that while you’re still healthy.”

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Paula Span is the author of “When the Time Comes: Families With Aging Parents Share Their Struggles and Solutions.”

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The New Old Age Blog: In Blended Families, Responsibility Blurs

Every year, Fran McDowell waited for the summer week when she would sing in a choral festival in the North Carolina mountains, then spend a few days in a lakeside cabin with close women friends.

That getaway grew more complicated to arrange — but perhaps more necessary — after her husband, Herb Beadle, was diagnosed with Alzheimer’s disease. They had a “gloriously happy” marriage — her first, his second — for 11 years, and she was more than willing to care for him in sickness as in health. But he could no longer manage alone in their Atlanta home.

For a few years, other family members pitched in to allow Ms. McDowell her cherished vacation. Eventually, though, she had to ask her husband’s daughter, a medical professional in another state, to take him into her home for a week.

She said no, then yes. Then, the day before Ms. McDowell was to drive him there, her stepdaughter again refused, leaving no time for alternate arrangements. If this had been her biological child, “I would have said, ‘Come on, don’t do this to me,’” Ms. McDowell said. Instead, reluctant to make waves, she canceled her trip.

“I think confrontation is riskier for stepparents,” she told me. “I was the compliant one who would bite my tongue rather than say what I thought.”

Ms. McDowell never told her stepdaughter, or anyone in the family, how angry and disappointed she was, or how difficult it was becoming to care for their father, who died three years ago at 86. She told the members of her dementia caregivers support group instead.

It was that group’s leader, Moira Keller, who e-mailed me to suggest this topic. A clinical social worker with the Sixty Plus program at Piedmont Atlanta Hospital, she wrote that “one of the biggest challenges I have is blended families in later life.”

Though I’ve written about the way the 1970s’ spike in divorces could complicate caregiving for adult children — more households to sustain, more siblings to either help or hinder — I hadn’t considered the impact on the older people themselves.

But Ms. Keller seems to be onto something. “The generation most likely to have stepchildren” — the boomers — “don’t need much care yet,” said Merril Silverstein, a Syracuse University sociologist co-editing a coming issue of the Journal of Marriage and the Family on stepfamilies in later life. “The crunch will come in 10 or 20 years.”

Initially, many adult children whose divorced or widowed parents remarry seem delighted, Ms. Keller said when we spoke. “They’re thrilled that Mom or Dad isn’t alone,” she said. “It’s a wonderful thing — until somebody gets sick.”

Then, she has found, “it gets really blurry. Who’s going to do what?” Grown children don’t have much history with these new spouses; they often feel less responsibility to intervene or help out, and stepparents may be unwilling to ask. Perhaps it’s unclear whether children or new spouses have decision-making authority.

“Older couples in this situation fall through the cracks,” Ms. Keller said.

Research shows that the ties which lead adult children to become caregivers — depending on how much contact they have with parents, how nearby they live, how obligated they feel — are weaker in stepchildren, Dr. Silverstein said. Money sometimes enters the equation too, Ms. Keller added, if biological children resent a parent’s spending their presumed inheritance on care for an ailing stepparent.

Adela Betsill, another of Ms. Keller’s support group members, married her longtime partner five years ago — her second marriage, his third. She has since given up her interior design business to care for Robert who, at 72, has also developed Alzheimer’s disease. His two children have had little involvement — perhaps because she’s just 49 and presumed able to handle everything.

Thus, though Robert’s son works from an office in their home, if Ms. Betsill needed to go out and asked him to remind his father to eat lunch, “he might, or he might not,” she said. “I don’t think he realizes it’s a burden.” So she has not asked.

Would it be different if she were his biological mother and he saw her wearing out under the strain? She thinks so, but it’s hard to know. After all, biological families also experience plenty of conflict and avoidance as elders age.

Still, that sense of reciprocity we often hear from caregivers — she took care of me when I was young, so I need to help out now that she’s old — doesn’t apply in late-life stepfamilies. Ms. Betsill didn’t raise this man, or his half sister.

Older couples who marry or remarry often discuss their finances, Ms. Keller has found. (An elder attorney, Craig Reaves, discussed the legal consequences here.) But illness and dependence may prove even more difficult subjects to broach.

“If I could yell one thing from a mountaintop,” Ms. Keller said, “it’s to talk about this stuff, too. Who’s going to take care of you if you become sick? Talk about that while you’re still healthy.”

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Paula Span is the author of “When the Time Comes: Families With Aging Parents Share Their Struggles and Solutions.”

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DealBook: Liberty Global in Talks to Buy Virgin Media

6:59 a.m. | Updated

LONDON – Liberty Global, the international cable company owned by the American billionaire John C. Malone, is in discussions to buy the British cable company Virgin Media.

In a brief statement on Tuesday, Virgin Media said it was in talks with Liberty Global, which serves almost 20 million customers worldwide.

“Any such transaction would be subject to regulatory and other conditions,” Virgin Media said in a statement. Spokesmen for both Virgin Media and Liberty Global declined to comment further.

Shares in Virgin Media, which was formed through several mergers of small British cable companies and a cellphone company in the 2000s, rose almost 16 percent in afternoon trading in London on Tuesday.

Its shares have jumped almost 60 percent in the last 12 months, as more consumers sign up for so-called bundled services, including Internet and cellphone contracts.

The company, whose primary listing is on Nasdaq, is the second-largest pay-TV provider in Britain after BSkyB, which is partly owned by Rupert Murdoch‘s News Corporation.

Virgin Media’s market capitalization stands at $10.4 billion. Including debt, Virgin Media’s enterprise value is around $19.4 billion, according to data from Thomson Reuters.

To secure a deal, analysts at Espirito Santo said Liberty Global may have to pay as much as $24 billion, though they questioned whether the international cable company could afford to fund the acquisition because of its existing high levels of debt.

Analysts also said that it would be difficult for Liberty Global to make costs savings between its current European operations and those of Virgin Media, adding that Liberty had waited to make its move for Virgin Media until the British cable operator had carried out a series of upgrades to its network and restructured its debt.

“Unless another bidder comes out of the woodwork, it’s hard to see much more of a premium on the price,” said Patrick Yau, a media analyst at Peel Hunt in London.

The British billionaire Richard Branson, whose Virgin brand is now used for a variety of products and services, including airlines and banks, owns less than 3 percent of Virgin Media.

While the British cable operator has been picking up market share, the company currently has 4.9 million customers, or roughly half the number of subscribers as its larger rival, BSkyB, according to filings from the companies.

A potential deal for Virgin Media would put Mr. Malone head-to-head with Mr. Murdoch, his longtime rival.

In 2008, the Liberty Group, which has operations in 13 countries, completed its purchase of a controlling stake in DirecTV, the satellite television provider, from News Corporation in a cash-and-equity deal worth roughly $11 billion.

The deal came after Mr. Malone’s purchase of a 16 percent stake in News Corporation, which he then traded for the satellite television operator, a number of regional sports networks and around $550 million cash.

Liberty Global has been expanding its presence in Europe and has operations from Ireland to Romania, though it failed last month in its bid to acquire the Belgian telecommunications company Telenet Group for $2.7 billion. Liberty Global currently owns a 58 percent stake in Telenet.

In August, Liberty Media, the media conglomerate also controlled by Mr. Malone, agreed to buy a stake in Barnes & Noble for $204 million, but declined to buy the bookseller outright.

The move disappointed some investors after Liberty had earlier offered to buy a 70 percent stake of Barnes & Noble for $17 a share if its chairman, Leonard S. Riggio, who owns around 30 percent of the company, agreed to the deal.

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The Lede Blog: Frank Video of Mass Sexual Assault in Cairo Is Released by Anti-Harassment Activists

Egyptian activists released a brutally frank video on Friday, using images recorded during the mass sexual assault of a woman last week in Cairo’s Tahrir Square to urge volunteers to join their campaign against attacks during demonstrations.

The video, created by the filmmakers Aida Elkashef and Salam Yousry, uses disturbing overhead images of a crowd of men swarming around a woman being assaulted just out of view to explain the work of Op Anti-SH, one of two new initiatives to combat the sexual harassment and rape of female protesters.

A video produced by Egyptian activists uses images recorded during the mass sexual assault of a woman in Cairo’s Tahrir Square last week, on the second anniversary of the Egyptian revolution.

While the video includes no graphic images and shows that volunteers did eventually manage to help the woman to a safe location — near the KFC in the square — the detailed description of the woman’s assault stunned some viewers.

After Egyptians expressed shock at another video clip — the images of police officers stripping and beating a male protester in Cairo that were broadcast live on Friday night — one activist, Sarah Naguib, argued that such brutality is depressingly routine two years after the Egyptian revolution began.

Everyone is so shocked by the video. This is what happens to women during mob sexual assault.

— Sarahngb (@Sarahngb) 1 Feb 13

Despite that reality, the Op Anti-SH activists vow to continue their struggle.

Our fight against mob sexual assaults is at the heart of the revolution, against a regime & a mentality that are killing us. We won´t stop!

— قوة ضد التحرش (@OpAntiSH) 2 Feb 13

In a video interview on the initiative published on Saturday, one of the women involved in Op Anti-SH, Engy Ghozlan, said: “This is our country, and we will not be silent about sexual harassment, not the type that happens to us every day, nor that of Tahrir. It will end, it cannot continue, because we believe Egypt deserves better.”

“In Egypt,” she added, “there is no revolution without the participation of women or without their security.”

A video report by a journalist, Simon Hanna, on Op Anti-SH for the news site Ahram Online.

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This post has been revised to reflect the following correction:

Correction: February 4, 2013

An earlier version of this post incorrectly described a comment from the activist Sarah Naguib as a response to the video of sexual assault in Tahrir, rather than to video of police stripping and beating a male protester on Friday.

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Gadgetwise Blog: Q.& A.: Recording Video on an SD Card

How many minutes of video can I fit on the 16-gigabyte Secure Digital memory card in my camera?

The amount of video you can fit on your camera’s memory card can depend on the camera, the image quality and any special-effects modes you may be using while filming. The video section of your camera’s manual should have some specific answers on recording times for the different settings. If you chucked your manual right after you got the camera or cannot find it, check the support area of your manufacturer’s Web site or try an online manual repository like Retrevo.

For example, on the PowerShot S95 camera, Canon’s manual says you should be able to fit approximately one hour, 42 minutes and 57 seconds of video on a 16-gigabyte card when recording video at the high-definition setting of 1,280 by 720 pixels (at 24 frames per second). Switching to the standard-quality setting of 640 by 480 pixels (at 30 frames per second) lets you fit two hours, 59 minutes and three seconds of video on a 16-gigabyte SD card.

If you drop the quality level even lower to the 320 by 240 pixels (at 30 frames per second) setting, you can store more than eight hours of video on the card. Video clips may have a maximum size of four gigabytes or around 30 minutes in length at the high-definition setting, but you can resume recording new clips until the card is full.

While your camera’s manual should have more precise information, the SD Association, (an industry group devoted to creating technical standards for the Secure Digital format), has some basic information on how many minutes of video can fit on SD cards of different capacities on its site. The page also provides estimates on how many photos or approximate minutes of music fit on various SD cards.

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The New Old Age Blog: Therapy Plateau No Longer Ends Coverage

Ellen Gorman, 72, a New York psychotherapist, can’t walk very far and gets around the city mainly by taxi, “which is really expensive,” she said. Twice since 2008 her physical therapy was discontinued because she wasn’t progressing. But after a knee replacement last year, she is getting physical therapy again, exercising with her therapist and building up her endurance by walking in the hallway of her Manhattan apartment building.

“Before this, I was getting weaker and weaker, and I just kept caving in,” she said.

Because of an action by Congress and a recent court settlement, Medicare probably won’t cut off Ms. Gorman’s physical therapy again should her progress level off — as long as her doctor says it is medically necessary.

Congress continued for another year a little-known process that allows exceptions to what Medicare pays for physical, occupational and speech therapy. The Medicare limits before the exceptions are $1,900 for physical and speech therapy this year, and $1,900 for occupational therapy.

In addition, the settlement of a class-action lawsuit last month now means that Medicare is prohibited from denying patients coverage for skilled nursing care, home health services or outpatient therapy because they had reached a “plateau,” and their conditions were not improving. That will allow people with Medicare who have chronic health problems and disabilities to get the therapy and other skilled care that they need for as long as they need it, if they meet other coverage criteria.

The settlement is expected to affect thousands, and possibly millions, of Medicare beneficiaries with chronic health problems like Parkinson’s or Alzheimer’s disease, stroke, multiple sclerosis and spinal cord injuries. It could also help families, as well as the overburdened Medicare budget, delay costly nursing home care by enabling seniors to live longer in their own homes.

“Under this settlement, Medicare policy will be clarified to ensure that claims from providers are reimbursed consistently and appropriately and not denied solely based on a rule-of-thumb determination that a beneficiary’s condition is not improving,” said Fabien Levy, a spokesman for the U. S. Department of Health and Human Services, which includes the Medicare program.

The lawsuit was filed by the Center for Medicare Advocacy and Vermont Legal Aid on behalf of four Medicare patients and five national organizations, including the National Multiple Sclerosis Society, Parkinson’s Action Network and the Alzheimer’s Association. A tentative settlement had been reached in October and on Jan. 24 a federal judge in Vermont approved the deal.

For seniors getting skilled services at home under a doctor’s order, the settlement means Medicare’s home health coverage has no time limit, Margaret Murphy told lawyers attending the annual meeting of the National Academy of Elder Law Attorneys in Washington, D. C., shortly after the then-tentative settlement was announced.

The coverage “can go on for years and years, if your doctor orders it,” said Ms. Murphy, the center’s associate director, who added that patients must be homebound (though not bedbound) and need intermittent care — every couple of days or weeks – that can only be provided by a physical therapist, nurse or other trained health care professional. When physical therapy is provided as part of Medicare’s home health benefit, the therapy dollar limits may not apply.

The settlement ensures that nursing home residents will also get coverage for skilled care regardless of improvement, but does not change the duration, which is still limited to up to 100 days per “benefit period.” That begins when a patient is admitted as an inpatient to a hospital or a nursing home for skilled care and ends after 60 days without skilled care. The agreement preserves the requirement that they must also have spent at least three days as inpatients in a hospital.

Federal officials say the settlement is not a change in Medicare coverage rules, but that statement may surprise many beneficiaries and providers.

“If someone isn’t making progress, I say, ‘Listen, I’m sorry but Medicare’s not going to cover this so you can come in for a few more sessions but then I have to let you go,’ ” said Greg Babiec, a physical therapist and one of the owners of Evolve, a private therapy practice with offices in Manhattan and Brooklyn. He had not heard about the settlement.

Beneficiaries also often lose Medicare coverage for outpatient therapy because they hit the payment limit. But under the exceptions process Congress continued for another year, the health care provider can put an additional code on the claim that indicates further treatment above the $1,900 limit is medically necessary. When treatment costs reach $3,700, the provider can submit medical documentation to support a request for another exception to cover 20 more sessions. (A Medicare fact sheet provides some additional details, but has not been updated for 2013.)

In 2011, nearly five million seniors received therapy services at a cost of $5.7 billion, and about one out of every four received an exception to the then-$1,870 limit, according to the Medicare Payment Advisory Commission, an independent government agency that advises Congress.

Just a few hours before the settlement was approved, Rachel DeGolia learned that her 87-year-old father in Chicago was going to have to stop therapy because he stopped showing improvement — again.

“Every time he stops going to physical therapy, he starts to backslide in terms of his balance, his strength and his mobility,” said Ms. DeGolia, executive director of the Universal Health Care Action Network, a national advocacy group in Cleveland. His physical therapist did not know Medicare will cover therapy to prevent her father’s condition from getting worse.

Under the settlement, Medicare officials have until next January to straighten things out by notifying health care providers. Beneficiaries are not among those to be contacted, and so far the federal officials have not issued a formal statement on the settlement.

But patients don’t have to wait for their provider to get the official word, said Judith Stein, the lead attorney for the plaintiffs and executive director of the Center for Medicare Advocacy. “This isn’t a clandestine settlement,” she said.

The center’s Web site offers free “self-help” packets explaining how to challenge a denial of coverage that is based on the lack of improvement. Ms. Stein also advises beneficiaries to show a copy of the settlement — also available from the Web site — to your health care provider at your next physical therapy appointment if you are concerned about losing Medicare coverage. (If you follow this advice, let us know what happens.)

The Web site also explains how beneficiaries can request a review of their case if they received skilled nursing or therapy services in a skilled nursing facility, at home or as outpatients and were denied Medicare coverage because of a lack of progress after Jan. 18, 2011, when the lawsuit was filed.

Dean Lerner relied on the settlement last month to ensure that his brother-in-law would continue to receive Medicare physical therapy coverage.

“My brother-in-law in St. Louis suffers from Parkinson’s disease, and has for many years, and my sister is having a devil of a time helping him as his disease progresses,” said Mr. Lerner, a retired lawyer and state health official in Des Moines, who is also a Medicaid consultant.

A physical therapist teaches his brother-in-law to stand, turn and use a walker and maintain what little strength he still has. But because his condition hasn’t improved, the therapist said Medicare would not pay for additional sessions.

“But for my being an attorney, the outcome may well have been very different, and that shouldn’t be,” he said. “Why should you have to fight?”

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The New Old Age Blog: Therapy Plateau No Longer Ends Coverage

Ellen Gorman, 72, a New York psychotherapist, can’t walk very far and gets around the city mainly by taxi, “which is really expensive,” she said. Twice since 2008 her physical therapy was discontinued because she wasn’t progressing. But after a knee replacement last year, she is getting physical therapy again, exercising with her therapist and building up her endurance by walking in the hallway of her Manhattan apartment building.

“Before this, I was getting weaker and weaker, and I just kept caving in,” she said.

Because of an action by Congress and a recent court settlement, Medicare probably won’t cut off Ms. Gorman’s physical therapy again should her progress level off — as long as her doctor says it is medically necessary.

Congress continued for another year a little-known process that allows exceptions to what Medicare pays for physical, occupational and speech therapy. The Medicare limits before the exceptions are $1,900 for physical and speech therapy this year, and $1,900 for occupational therapy.

In addition, the settlement of a class-action lawsuit last month now means that Medicare is prohibited from denying patients coverage for skilled nursing care, home health services or outpatient therapy because they had reached a “plateau,” and their conditions were not improving. That will allow people with Medicare who have chronic health problems and disabilities to get the therapy and other skilled care that they need for as long as they need it, if they meet other coverage criteria.

The settlement is expected to affect thousands, and possibly millions, of Medicare beneficiaries with chronic health problems like Parkinson’s or Alzheimer’s disease, stroke, multiple sclerosis and spinal cord injuries. It could also help families, as well as the overburdened Medicare budget, delay costly nursing home care by enabling seniors to live longer in their own homes.

“Under this settlement, Medicare policy will be clarified to ensure that claims from providers are reimbursed consistently and appropriately and not denied solely based on a rule-of-thumb determination that a beneficiary’s condition is not improving,” said Fabien Levy, a spokesman for the U. S. Department of Health and Human Services, which includes the Medicare program.

The lawsuit was filed by the Center for Medicare Advocacy and Vermont Legal Aid on behalf of four Medicare patients and five national organizations, including the National Multiple Sclerosis Society, Parkinson’s Action Network and the Alzheimer’s Association. A tentative settlement had been reached in October and on Jan. 24 a federal judge in Vermont approved the deal.

For seniors getting skilled services at home under a doctor’s order, the settlement means Medicare’s home health coverage has no time limit, Margaret Murphy told lawyers attending the annual meeting of the National Academy of Elder Law Attorneys in Washington, D. C., shortly after the then-tentative settlement was announced.

The coverage “can go on for years and years, if your doctor orders it,” said Ms. Murphy, the center’s associate director, who added that patients must be homebound (though not bedbound) and need intermittent care — every couple of days or weeks – that can only be provided by a physical therapist, nurse or other trained health care professional. When physical therapy is provided as part of Medicare’s home health benefit, the therapy dollar limits may not apply.

The settlement ensures that nursing home residents will also get coverage for skilled care regardless of improvement, but does not change the duration, which is still limited to up to 100 days per “benefit period.” That begins when a patient is admitted as an inpatient to a hospital or a nursing home for skilled care and ends after 60 days without skilled care. The agreement preserves the requirement that they must also have spent at least three days as inpatients in a hospital.

Federal officials say the settlement is not a change in Medicare coverage rules, but that statement may surprise many beneficiaries and providers.

“If someone isn’t making progress, I say, ‘Listen, I’m sorry but Medicare’s not going to cover this so you can come in for a few more sessions but then I have to let you go,’ ” said Greg Babiec, a physical therapist and one of the owners of Evolve, a private therapy practice with offices in Manhattan and Brooklyn. He had not heard about the settlement.

Beneficiaries also often lose Medicare coverage for outpatient therapy because they hit the payment limit. But under the exceptions process Congress continued for another year, the health care provider can put an additional code on the claim that indicates further treatment above the $1,900 limit is medically necessary. When treatment costs reach $3,700, the provider can submit medical documentation to support a request for another exception to cover 20 more sessions. (A Medicare fact sheet provides some additional details, but has not been updated for 2013.)

In 2011, nearly five million seniors received therapy services at a cost of $5.7 billion, and about one out of every four received an exception to the then-$1,870 limit, according to the Medicare Payment Advisory Commission, an independent government agency that advises Congress.

Just a few hours before the settlement was approved, Rachel DeGolia learned that her 87-year-old father in Chicago was going to have to stop therapy because he stopped showing improvement — again.

“Every time he stops going to physical therapy, he starts to backslide in terms of his balance, his strength and his mobility,” said Ms. DeGolia, executive director of the Universal Health Care Action Network, a national advocacy group in Cleveland. His physical therapist did not know Medicare will cover therapy to prevent her father’s condition from getting worse.

Under the settlement, Medicare officials have until next January to straighten things out by notifying health care providers. Beneficiaries are not among those to be contacted, and so far the federal officials have not issued a formal statement on the settlement.

But patients don’t have to wait for their provider to get the official word, said Judith Stein, the lead attorney for the plaintiffs and executive director of the Center for Medicare Advocacy. “This isn’t a clandestine settlement,” she said.

The center’s Web site offers free “self-help” packets explaining how to challenge a denial of coverage that is based on the lack of improvement. Ms. Stein also advises beneficiaries to show a copy of the settlement — also available from the Web site — to your health care provider at your next physical therapy appointment if you are concerned about losing Medicare coverage. (If you follow this advice, let us know what happens.)

The Web site also explains how beneficiaries can request a review of their case if they received skilled nursing or therapy services in a skilled nursing facility, at home or as outpatients and were denied Medicare coverage because of a lack of progress after Jan. 18, 2011, when the lawsuit was filed.

Dean Lerner relied on the settlement last month to ensure that his brother-in-law would continue to receive Medicare physical therapy coverage.

“My brother-in-law in St. Louis suffers from Parkinson’s disease, and has for many years, and my sister is having a devil of a time helping him as his disease progresses,” said Mr. Lerner, a retired lawyer and state health official in Des Moines, who is also a Medicaid consultant.

A physical therapist teaches his brother-in-law to stand, turn and use a walker and maintain what little strength he still has. But because his condition hasn’t improved, the therapist said Medicare would not pay for additional sessions.

“But for my being an attorney, the outcome may well have been very different, and that shouldn’t be,” he said. “Why should you have to fight?”

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