March 2018 – Tipping the Scales Toward Medicare Advantage & Other Issues
Federal Budget & Omnibus Bill
On February 9, 2018, the Bipartisan Budget Act of 2018 was signed into law. While the Budget Act included a number of permanent provisions, including those discussed below, it only extended spending on the federal budget through another short-term continuing resolution (CR), which expires March 23rd. The remainder of the FY 2018 federal budget, along with the fate of several important programs, still need to be addressed. However, as of the issuance of this Alliance brief on March 12, 2018, there is limited public information about progress on negotiations over the federal budget and potential omnibus spending bill.
See, e.g., “Omnibus Action Next Week Possible, but Obstacles Still Exist” Roll Call, March 8, 2018: https://www.rollcall.com/news/politics/omnibus-action-next-week-possible-obstacles-still-exist.
On February 9, 2018, President Trump signed into law the Bipartisan Budget Act of 2018 (full text available here) which, among other things, raises the debt ceiling through March, 2019, removes budget caps imposed by the Budget Control Act of 2011, and keeps the government funded through March 23, 2018. The Budget Act contains a “health extenders” package, which includes a number of wide-ranging provisions relating to various health programs. Below we highlight certain provisions, which we divide into “Good” and “Bad” – for more information, see the Center’s statement following passage of the bill, available here. For additional analysis of some of the health-related provisions of this bill, see, e.g., summaries by Justice in Aging and Medicare Rights Center.
Repeal of Medicare Outpatient Therapy Caps – Since the Balanced Budget Act of 1997, outpatient therapy under Medicare Part B has been subject to annual dollar limits, or caps. During most of these 20 years, an “exceptions” process has allowed beneficiaries and providers to seek coverage above the caps. The exceptions process expired December 31, 2017. This extenders package permanently repeals the caps. However, it continues to require providers to attach a modifier code to claims above the current cap level to indicate the services are medically necessary, and claims above a higher limit ($3,000) may be subject to a targeted manual medical review.
Also see the Center’s Weekly Alert “Congress Repeals Medicare Outpatient Therapy Caps, Strengthening the Jimmo Settlement Agreement” (February 14, 2018).
Steve Gleason Enduring Voices Act – This Act builds upon the successes of the Steve Gleason Act of 2015 by permanently fixing restrictions in the law that limited Medicare coverage and access to Speech Generating Devices (SGDs) – which are a crucial means of communicating for people with ALS and other degenerative diseases. Specifically, the Gleason Act makes changes to the Durable Medical Equipment section of the Social Security Act. It moves coverage of the SGD from the rental payment category to the purchase payment category. When the SGD fell under the rental category, Medicare would not pay for an SGD if the user had to enter a nursing home, hospital, or hospice. By moving the SGD to a purchase payment category, the user can take their SGD anywhere and keep it for as long as necessary.
Further Means Testing Medicare Premiums – Medicare beneficiaries with incomes of $85,000 (or $170,000 for a couple) already have to pay higher premiums for both Part B and Part D coverage. The amount of the increased premium depends on how much above this threshold amount they earn. The new law makes people earning $500,000 or more ($750,000 for a couple) pay an even higher share of their premiums than they pay under current law. Medicare premium increases for higher income people may sound equitable, but they diminish important support for the Medicare program and for maintaining its promise as a universal program for all who qualify.
Home Health Changes – The Budget Act includes a number of provisions relating to the Medicare home health benefit that, among other things, will implement a payment model that may further reduce access to Medicare-covered home care. In addition to reducing a home health episode of payment from 60 days to 30 days, the law eliminates the use of therapy thresholds. This is the basis of a payment model, introduced by CMS in 2017, which would also discourage agencies from caring for people who haven’t had a prior hospitalization and people who need mental health care. Implementation of the model as proposed by CMS was tabled as industry and beneficiary advocates universally raised concerns. (See our September 2017 Weekly Alert discussing the proposed rule.)
Another home health provision will allow Medicare determinations to be based as much on the documentation in the home health agency records (and nursing home records if the patient came to home health care from a SNF), as on the documentation of the physician who knows the patient and must certify the need for care. Our experience tells us that this may well lead to unfair coverage denials. Home health records are often not complete, and payment methods too often drive agencies to want to cherry-pick patients (and perhaps document accordingly). Further, the opinion of the patient’s physician has been given great weight under the law (as ruled by many courts), in determining a patient’s need for care and qualifying for Medicare. This section may conflict with the important relationship between a doctor and a patient and give industry too much power in determining what is medically “reasonable and necessary”.
Tipping the Scales Toward Medicare Advantage
Part C of the Medicare program, also known as Medicare Advantage (MA), is an option available to Medicare beneficiaries who wish to receive their benefits through private insurance companies, primarily HMOs. In 2017, more than 19 million Medicare beneficiaries (33%) were enrolled in MA plans. MA enrollment is projected to continue to grow, rising to an estimated 41% of beneficiaries by 2027. There are both pros and cons for beneficiaries who choose to enroll in MA plans (see, e.g., the Center’s enrollment tips here and here). For example, “pros” include the ease of “one stop shopping” through MA plans, as opposed to those in traditional Medicare who often must purchase separate Part D prescription drug and Medigap supplemental plans. “Cons” often include limited networks of providers available through MA plans, and, in our experience, increased difficulty in accessing services when the need for such services intensifies.
Part of the promise of allowing private plans to participate in Medicare was that such plans could provide better quality care at a lower cost. Neither of these propositions, though, appear to have borne out. Despite changes pursuant to the Affordable Care Act that sought to rein in overpayments to MA plans (averaging up to a high of 114% of what traditional Medicare would spend on a given individual), MA plans are still paid at a higher rate than traditional Medicare, in part, due to inappropriate “upcoding” – or coding intensity related to risk adjusted payment (plans get higher payment rates based in part on the reported health of individual enrollees). As noted by the General Accounting Office (GAO) in 2016, CMS estimates that about 9.5% of its annual payments to MA organizations were improper – totaling $14.1 billion in 2013 alone – “primarily stemming from unsupported diagnoses submitted by MA organizations.” According to the Medicare Payment Advisory Commission (MedPAC), “after accounting for all coding adjustments, payments to MA plans were about 4 percent higher than Medicare payments would have been if MA enrollees had been treated in [traditional] Medicare.”
MA plans often use this extra money, based upon the bid they submit to the Medicare program, to offer benefits not covered by traditional Medicare, such as some vision, hearing and dental coverage, which makes such plans more attractive to Medicare beneficiaries. But this extra money has not necessarily led to better health outcomes among MA enrollees. As noted in a recent article in the Journal of the American Medical Association (JAMA), one the one hand, “some studies show that Medicare Advantage has higher quality in certain dimensions, such as higher rates of preventive care and screenings among recipients” but, on the other hand, other studies “suggest that Medicare Advantage does not serve certain beneficiaries well, such as those with greater illness severity.” The article highlights that the public does not have enough data about the MA program, concluding that “[d]espite the important and increasing role of Medicare Advantage plans, there is fairly little insight into the relative value Medicare Advantage provides to beneficiaries or the funder, the US taxpayer.”
As discussed below, despite costing more than traditional Medicare, yielding mixed quality outcomes, and a lack of enough data about how the program works, a variety of factors ranging from policy changes to government outreach tip the scales in favor of enrollment in MA plans. This bias towards the MA program not only costs Medicare more, but disadvantages the majority of Medicare beneficiaries who choose to access their coverage through the traditional program.
Recent Legislative and Regulatory Changes Favoring MA
The MA program has several built in advantages to enrollees over individuals with traditional Medicare, including: an out-of-pocket cap, absent from traditional Medicare; a requirement to accept almost all Medicare beneficiaries on an annual basis, as compared to federally-mandated enrollment rights regarding Medigap supplemental insurance plans, which does not require sale to individuals under 65, and only requires sales to people over 65 following certain triggering events; and the ability to waive the 3-day prior hospital stay requirement for coverage in a skilled nursing facility. These MA advantages have been amplified by recent changes in both law and regulation, including the changes discussed below.
CURES Act – 2016 – On December 13, 2016, President Obama signed into law the 21st Century Cures Act (Public Law No: 114-255, also known as “Cures”, H.R. 34). Among other things, the CURES act imposed the following changes:
Effective 2019, for the first 3 months of the calendar year there will be a continuous open enrollment and disenrollment period relating to MA plans (previously called the Medicare Advantage Open Enrollment Period, or MA-OEP). During this 3-month period an MA eligible beneficiary can make a one-time change to another MA plan, they can elect traditional Medicare, or they can elect coverage under Part D. This policy change, which has been backed by insurance agents/brokers and the health insurance industry, among others, favors MA enrollment over traditional Medicare by giving those in MA plans more flexibility to make changes to their coverage.
Beginning in 2021, people with End-Stage Renal Disease (ESRD) will be able to enroll in MA plans. Current law prohibits people with ESRD from enrolling in MA plans except in limited situations. Instead of promoting free choice regarding how people wish to obtain their health coverage, and endorsing equal opportunity for all Medicare beneficiaries, regardless of age or health status, Congress failed to extend Medigap rights to people with ESRD at the same time it removed prohibitions on enrollment in MA. Conversely, Congress is working to erode Medigap coverage more broadly. In 2015, Congress passed the Medicare and CHIP Reauthorization Act (MACRA) bill that will prohibit people eligible for Medicare on or after January 1, 2020 from purchasing a Medigap policy that covers the Part B deductible (sometimes referred to as policies that offer “first dollar coverage”).
For more information on these changes see the Center’s Weekly Alert “Cures” Act Tips the Scales Even Further in Favor of Medicare Advantage Over Traditional Medicare” (December 28, 2016)
Bipartisan Budget Act of 2018 – Signed into law by President Trump on February 9, 2018, this bill contains a number of provisions that improve or expand services and coverage in Medicare Advantage only. On the one hand, these provisions have the potential to improve services and care for people enrolled in MA plans. On the other hand, this approach is unfair for the majority of Medicare beneficiaries, who are in traditional Medicare, and once again favors MA over traditional Medicare. This bill included all provisions of the bipartisan Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act, which aims to improve MA coverage for individuals with chronic conditions. These provisions include:
Expansion of supplemental benefits in MA – beginning in 2020, supplemental benefits offered by MA plans will no longer be limited to being “primarily health related” but instead must only have a reasonable expectation of improving or maintaining the health or overall function of chronically ill enrollees.
Expansion of access to telehealth services available to enrollees of MA plans, including offering such services as a basic benefit.
In the current climate of “deregulation” a number of policy proposals have been offered that favor MA plan sponsor “flexibility” in a way that will make things more complex, not less, for Medicare beneficiaries. While the provisions of both the proposed Part C and D rule and the draft Call Letter are currently in draft form and not yet finalized, they are expected to appear in final versions of these documents in early April 2018.
Proposed C & D Rule – On November 28, 2017, CMS issued draft regulations entitled Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefits Programs for Contract Year 2019 (CMS-4182-P), available here. The Center submitted extensive comments to this proposed rule, which are available here. The proposed rule included the following provisions:
Flexibility in Medicare Advantage Uniformity Requirements – CMS proposes to allow plan sponsors to offer differences in benefits tied to specific health conditions through a “new interpretation of the uniformity requirement” which will “permit MA organizations the ability to reduce cost sharing for certain covered benefits, offer specific tailored supplemental benefits, and offer lower deductibles for enrollees that meet specific medical criteria.”
Meaningful Differences in Medicare Advantage Bid Submissions and Bid Review – CMS proposes to eliminate the meaningful difference requirement for MA plan sponsors wishing to offer more than one plan in a given service area. CMS notes that “[t]his proposal aims to improve competition, innovation, available benefit offerings, and provide beneficiaries with affordable plans that are tailored to their unique health care needs and financial situation.” CMS notes that it “expects” plan sponsors to continue to offer plans that are “different from one another with respect to key benefit design characteristics, so that any potential beneficiary confusion is minimized…”
Additional proposals to segment benefit flexibility, add greater flexibility to plan maximum out of-pocket limits (MOOP) and allow higher cost-sharing limits for services combine to exacerbate barriers Medicare beneficiaries face in making informed decisions about their health insurance coverage.
Draft 2019 Call Letter – On February 1, 2018, CMS issued its draft 2019 Call Letter, an annual set of proposed rules, guidelines and clarifications for Part C Medicare Advantage (MA) and Part D plans that wish to participate in Medicare in the following calendar year. The Center’s comments to the draft Call Letter are available here. Provisions of the draft Call Letter include:
Health Related Supplemental Benefits – CMS intends to expand the scope of the primarily health related supplemental benefit standard by reinterpreting the statute “to permit MA plans to offer additional benefits as ‘supplemental benefits’ so long as they are healthcare benefits. Under [CMS’] new interpretation, in order for a service or item to be ‘primarily health related,’ it must diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization.” While the Budget Act of 2018 contains a similar proposal, to be implemented in 2020, CMS’ proposal would be rushed to implementation in 2019, apparently without time for drafting of thoughtful guidance, beneficiary education, solicitation of stakeholder feedback, and development of plan oversight protocols.
Medicare Advantage (MA) Uniformity Flexibility – This policy change, first proposed in the draft Part C & D rule (discussed above) is presented in the draft Call Letter as if it is final policy. If implemented, it could dramatically increase the range of benefits and cost-sharing between plans, and risks allowing some MA plans to devise discriminatory plan designs, intentionally or otherwise. We note that CMS began to test some of the concepts of loosening MA benefits in a Value-Based Insurance Design (VBID) demonstration through the Centers for Medicare and Medicaid Innovation (CMMI) beginning in January 2017. The demo is limited by condition, geography and plan and incorporates significant consumer protections. By loosening uniformity standards for all plans, CMS is putting the proverbial cart before the horse by scaling up an experiment before we have meaningful results, including whether such flexibility – even for a much smaller cohort with specific conditions – improves health outcomes. CMS’ policy change is premature in that there is not yet actionable, long-term feedback or lessons from the VBID demo as to whether altering benefits and cost-sharing in this manner is effective among the MA population – a crucial first step before significantly altering plan requirements. Loosening uniformity requirements in the manner CMS proposes could – by itself – create a chaotic environment for Medicare beneficiaries trying to make informed decisions about what options might be best for themselves. To do so without issuing strong guard rails in the form of consumer protections and more firm restrictions on plans is a stark departure from the more thoughtful and cautious approach recently taken by CMS in rolling out the VBID demo.
CMS Steering During Annual Coordinated Election Period (ACEP)
The Medicare Annual Coordinated Election Period (ACEP), from October 15th through December 7th, allows Medicare beneficiaries to make certain changes to their Medicare coverage, effective the following January 1st. As the Center discussed in an October 25, 2017 Weekly Alert, official Center for Medicare & Medicaid Services (CMS) Medicare Open Enrollment materials for 2018 tipped the scales to encourage beneficiaries to choose a private Medicare plan over original Medicare. For example, the Key Messages of the CMS Communications Plan for 2018 Open Enrollment did not even address original Medicare, the CMS Open Enrollment webpage made no mention of original Medicare as a choice during Open Enrollment, and while a CMS document entitled “Medicare Open Enrollment: Review, Compare, Enroll” does list original Medicare as a coverage option, the section on Open Enrollment in the document does not include original Medicare as an option.
On November 9, 2017, the Leadership Council of Aging Organizations (LCAO), a member coalition of the nation’s non-profit organizations serving older Americans, sent a letter about this issue to CMS and committees of jurisdiction in Congress.
The organizations listed in the letter wrote to express concerns that during the last Medicare open election period, CMS encouraged entities that assist Medicare beneficiaries with enrollment choices to disseminate information that was incomplete, biased towards Medicare Advantage (MA) and often failed to even mention traditional Medicare. The organizations urged CMS to take immediate corrective action to include and accurately portray the benefits and drawbacks of all coverage options in CMS materials.
The Medicare Advantage (MA) program, which provides Medicare enrollees with the option of obtaining their Medicare coverage through private plans, is reimbursed at rates higher than what traditional Medicare would spend on a given individual, often leading to extra benefits, along with other factors that favor MA enrollment over traditional Medicare. The Center urges policymakers to expand services and coverage equally for all Medicare beneficiaries, not just subsets – including those in traditional Medicare. For example, an out-of-pocket cap, or stop-loss, should be added to the program as exists in MA. Rights to purchase Medigap supplemental insurance policies should be expanded to both people under 65 and to include more ongoing access for all in order to provide truly meaningful choices for Medicare beneficiaries. And both payment and coverage should be equalized between MA and traditional Medicare so that the scales are not irreversibly tipped in favor of privatization.
Affordable Care Act Sabotage
Efforts to undermine or sabotage the Affordable Care Act (ACA) continue unabated. Last week, the Administration conditioned its support of legislation to stabilize the ACA Marketplace on it including proposals that will undermine benefits and erode coverage protections. The Administration wants any Congressional plan to stabilize the Marketplace to also expand the sale of junk insurance and raise premiums for older people – up to five times as much as what younger people pay. For more on this issue, including a link to the Center’s full comments on Association Health Plans, see the Center’s March 8, 2018 Weekly Alert. For additional ACA sabotage updates since the last Alliance Call, see:
Twenty State Attorney’s General, led by Texas and Wisconsin, announced another lawsuit to sue the federal government over the ACA – March 1, 2018.
Issuance of proposed rules to allow the sale of junk health insurance plans that won’t have to comply with ACA coverage rules or protections – February 22, 2018.
President’s Budget seeks to repeal the ACA and replace it with something similar to the failed Graham-Cassidy plan – February 14, 2018.
- Alexander v. Azar (formerly Bagnall v. Sebelius, Barrows v. Burwell), No. 3:11-cv-1703 (D. Conn.) (Observation Status). In November 2011, the Center for Medicare Advocacy and Justice in Aging filed a proposed class action lawsuit on behalf of individuals who have been denied Medicare Part A coverage of hospital and nursing home stays because their care in the hospital was considered “outpatient observation” rather than an inpatient admission. When hospital patients are placed on observation status, they are labeled “outpatients,” even though they are often on a regular hospital floor for many days, receiving the same care as inpatients. Because patients must be hospitalized as inpatients for three consecutive days to receive Medicare Part A coverage of post-hospital nursing home care, people on observation status do not have access to nursing home coverage. They must either privately pay the high cost of nursing care or forgo that skilled care. The number of people placed on observation status has greatly increased in recent years.
On September 23, 2013, a federal judge in Connecticut granted the government’s motion to dismiss the lawsuit. Plaintiffs appealed, but limited the appeal to the issue of the right to an effective notice and review procedure for beneficiaries placed on observation status. On January 22, 2015, the U.S. Court of Appeals for the Second Circuit decided that Medicare patients who are placed on observation status in hospitals may have an interest, protected by the Constitution, in challenging that classification. The panel held that the district court erred when it dismissed the plaintiffs’ due process claims, and it sent the case back to that court for further proceedings. Barrows v. Burwell, 777 F.3d 106 (2d Cir. 2015).
The parties completed discovery on the issue ordered by the Second Circuit: whether plaintiffs have a “protected property interest” in Part A coverage of their hospital stays, which depends on whether CMS has “meaningfully channeled” discretion on the question of patient status determinations. If the Secretary has established criteria for inpatient hospitalization, plaintiffs have an interest that is protected by the Due Process Clause and thus they may be entitled to notice and opportunity to appeal their placement on observation. Plaintiffs received voluminous documentation from the government and conducted depositions of witnesses from the Department of Health and Human Services, Medicare contractors, and some of the hospitals that treated the named plaintiffs. The law firm of Wilson Sonsini Goodrich & Rosati, which has helped the Center in previous litigation, joined as representatives of the plaintiffs during this phase and is continuing to provide invaluable pro bono assistance.
After briefing and a hearing on cross motions for summary judgment on the protected property interest issue and defendant’s supplemental motion to dismiss, the court issued a decision on February 8, 2017, denying both motions for summary judgment and largely denying the government’s motion to dismiss. The court found that all named plaintiffs have standing and none of their claims was moot, even though some have passed away and some have resolved their underlying individual claims. It decided that factual disputes precluded summary judgment on the property interest question, though it did note that CMS considers the billing of hospitalizations as inpatient or observation to be a regulatory matter, under the authority of the Secretary, as opposed to a clinical decision. The court also found that while a treating physician’s status order plays a “role” in Medicare’s review of a hospital claim, it is not dispositive or even presumed to be correct.
As for the motion to dismiss, the court found that plaintiffs have plausibly alleged the other two aspects of a due process claim: state action (in the form of pressure on providers by CMS) and inadequacy of existing procedures (it is undisputed that there is currently no appeal method for patients placed on observation status). The court found that plaintiffs’ claim for expedited notice is now moot due to the new requirements being implemented under the NOTICE Act (“MOON” notice). The parties filed an updated plan for further discovery as plaintiffs continue to press their due process claim.
Plaintiffs filed a renewed motion for class certification on March 3, 2017. On July 31, 2017, the court issued a decision certifying a nationwide class of Medicare beneficiaries who have received “observation services” in a hospital since January 1, 2009, and have received an “initial determination” that such services were covered, or subject to coverage, under Medicare Part B. In response to a motion for reconsideration filed by plaintiffs, the court issued a decision October 16, 2017 redefining the class to specifically include beneficiaries who have received a MOON notice. The court declined to include beneficiaries who do not have Part B, as plaintiffs had requested, but stated that it may revisit the class definition as more evidence is presented.
Update: The parties are now proceeding with discovery on their due process claim. Both parties have served written discovery requests and are in the process of providing written responses and producing documents.
As class counsel receives inquiries from people asking whether they can “join” the case, we advise them that no action is required of class members, but they should save any paperwork relating to their hospitalization and costs resulting from it. We also encourage them to share their observation status story on the Center’s website here: http://www.medicareadvocacy.org/submit-your-observation-status-story/
- For more information about this case, including a link to the class certification decision, see: http://www.medicareadvocacy.org/court-certifies-nationwide-class-in-observation-status-case/.
- For more information about observation status, including pending legislation see: http://www.medicareadvocacy.org/medicare-info/observation-status/.
- Jimmo v. Sebelius, No. 5:11-cv-17 (D. Vt.) (Improvement Standard). The settlement in Jimmo was approved on January 24, 2013. CMS issued revisions to its Medicare Benefit Policy Manual to clarify that Medicare coverage is available for skilled maintenance services in the home health, nursing home and outpatient settings. CMS also implemented a nationwide Educational Campaign for all who make Medicare determinations to ensure that beneficiaries with chronic conditions are not denied coverage for critical services because their underlying conditions will not improve. Pursuant to the settlement, counsel for the parties met twice a year to discuss problems with implementation and possible solutions.
On March 1, 2016, the Center and its co-counsel, Vermont Legal Aid, filed a Motion for Resolution of Non-Compliance with the settlement agreement. The filing came after three years of urging the Centers for Medicare & Medicaid Services (CMS) to fulfill its obligation to end continued application of an “Improvement Standard” by Medicare providers, contractors and adjudicators to deny Medicare coverage for skilled maintenance nursing and therapy.
The court announced its decision on the Motion for Resolution of Non-Compliance on August 18, 2016. The Order required CMS to remedy the inadequate Educational Campaign that was a cornerstone of the original Settlement Agreement. As the judge stated, “Plaintiffs bargained for the accurate provision of information regarding the maintenance coverage standard and their rights under the Settlement Agreement would be meaningless without it.” The parties negotiated but could not come to agreement on what a Corrective Action Plan should entail. The court then ordered each party to submit a brief explaining and justifying their proposed corrective action plans, as well as a response to the other party’s plan.
On February 2, 2017, the court released a decision ordering CMS to carry out a Corrective Action Plan to remedy noncompliance with the Settlement. The plan includes a new webpage by CMS dedicated to the Jimmo settlement with frequently asked questions and a statement (which the court largely adopted from plaintiffs’ suggested language) that affirmatively disavows the Improvement Standard; new training for Medicare contractors making coverage decisions; and a new National Call for Medicare contractors and adjudicators to correct erroneous statements that had been made on a previous call. The government was given an opportunity to object to the language of the corrective statement, and the parties negotiated final wording which was submitted to the court. On February 16, 2017, the court approved the final wording of the statement to be used by CMS to affirmatively disavow the use of an Improvement Standard. Importantly, the statement notes that the “Jimmo Settlement may reflect a change in practice for those providers, adjudicators, and contractors who may have erroneously believed that the Medicare program covers nursing and therapy services under these benefits only when a beneficiary is expected to improve.”
In late August 2017 the government published the new Jimmo-webpage on the CMS website to comply with the Corrective Action Plan. The webpage can be found here. The webpage includes court-approved affirmative disavowal of the Improvement Standard in a blue box titled “Important Message About the Jimmo Settlement.” The webpage also contains links to Jimmo-related documents, such as the transmittals of the revised Manual provisions, and a new set of Frequently Asked Questions. The imprimatur of CMS on these materials will help beneficiaries and their advocate who are arguing against inappropriate coverage denials or service terminations.
The court case has now concluded, but class counsel continues to work on ensuring that access to skilled maintenance nursing and therapy for older adults and people with disabilities is not inappropriately denied or terminated because their conditions are “chronic,” “not improving,” “plateaued,” or “stable.”
- For more information, see the Center’s website at: http://www.medicareadvocacy.org/medicare-info/improvement-standard/.
- Exley v. Burwell (formerly Lessler v. Burwell), No. 3:14-cv-1230 (D. Conn.) (ALJ Delays) The Medicare statute and regulations require that an administrative law judge (ALJ) issue a decision within 90 days the filing of a request for hearing. While the Chief ALJ has stated that individual beneficiary cases should not be delayed, still most of the Center’s cases were exceeding statutory timelines for decisions.
On August 26, 2014, the Center filed a nationwide class action lawsuit in United States District Court in Connecticut. The named plaintiffs, from Connecticut, New York and Ohio, all waited longer than the statutory 90-day limit for a decision on their Medicare appeals. On January 29, 2015, defendant’s motion to dismiss was denied. On June 10, 2015, the court granted the plaintiffs’ motion for certification of nationwide class of Medicare beneficiaries who have been or will be waiting more than 90 days for a decision on their timely-filed request for an ALJ hearing. The parties also conducted discovery. In March 2016 the court preliminarily approved a settlement and notice to the class was posted.
A Fairness Hearing was held on August 1, 2016 and the Court granted final approval of the settlement agreement. The settlement calls for the Office of Medicare Hearings and Appeals (OMHA) to continue its policy of providing beneficiary appellants with priority over other appellants in receiving ALJ decisions, to designate a Headquarters Division Director to oversee inquiries about appeals initiated by beneficiary appellants, and to address any complaints or questions concerning the processing of those appeals. OMHA will also introduce a new, more user-friendly ALJ hearing request form that allows beneficiaries to self-identify, and will also publish data about the length of processing time for beneficiary appeals.
On September 1, 2016 as part of the settlement, OMHA established a toll-free Beneficiary Help Line: (844) 419-3358. This line, which is staffed by representatives of OMHA, will address inquiries about ALJ appeals being pursued by Medicare beneficiaries. The Center urges anyone pursuing a beneficiary appeal who believes the appeal is not receiving timely attention to call the Beneficiary Help Line. The expectation is that a call to this line will help resolve delays in cases that are eligible to be prioritized. The Beneficiary Help Line is staffed from 8:00 a.m. to 4:30 p.m., Eastern Time. If calling at other times or if the OMHA Beneficiary Help Line staff are assisting other callers, OMHA instructs callers to leave a voicemail. Please report your experiences using the Help Line to the Center at: email@example.com.
As of November 1, 2016 CMS updated scripts for 1-800-Medicare to highlight the OMHA beneficiary prioritization policy for beneficiary callers and to refer them to the toll-free OMHA Beneficiary Help Line if they have questions about filing appeals with OMHA or about ALJ appeals that are pending with OMHA. OMHA also posted the beneficiary appeals data required by the settlement on their website at http://www.hhs.gov/about/agencies/omha/about/current-workload/beneficiary-appeals-data/index.html. The data shows beneficiary appeals now being processed within or very close to the 90-day statutory time period.
In late January 2017 the Office of Medicare Hearings and Appeals issued a new ALJ request form, the OMHA-100, which is a unified request for hearing and review and can be used for all appeals to OMHA. As part of the settlement, the form allows beneficiaries and enrollees to self-identify, making it easier for these claims to be classified as beneficiary appeals and given priority for processing. CMS has also issued instructions to appeal contractors that deal with reconsiderations (the level below ALJ hearings) the begin using revised appeal instructions that include plain-language instructions about OMHA’s beneficiary mail-stop as well as information on the beneficiary help-line that has been established at OMHA. The OMHA-100 is available at: https://www.hhs.gov/sites/default/files/OMHA-100.pdf
- For information about and a copy of the Exley settlement, see: http://www.medicareadvocacy.org/exley-v-burwell-settlement-in-medicare-appeals-delay-case-granted-final-approval/.
- Sherman v. Azar (formerly Olsen-Ecker v. Burwell), No. 3:15-cv-1468 (D. Conn.) (Lower level Medicare appeals) On October 9, 2015, the Center filed a complaint in United States District Court in Connecticut against Sylvia Mathews Burwell, Secretary of Health and Human Services, on behalf of plaintiffs who have been denied a meaningful review of their Medicare claims at the first two levels of appeal. The case was brought as a class action on behalf of Medicare beneficiaries seeking home health care coverage, and the named plaintiff represents beneficiaries who have received the usual “rubber stamp” denials at redetermination and reconsideration. The plaintiff also filed a motion for class certification, and the government filed a motion to dismiss. Written discovery was served but responses were stayed while the motion to dismiss was pending. Oral argument was held on February 29, 2016.
On August 8, 2016, the judge largely denied the government’s motion to dismiss and granted plaintiff’s motion for certification of a nationwide class. The court concluded that it had jurisdiction and decided that the case was not moot even though plaintiff’s claim had ultimately been approved. The judge dismissed the statutory claim, but found that plaintiff had stated a valid claim for relief under the Due Process Clause. He found plaintiff’s claim of policies or practices causing the denial rate sufficiently plausible to allow the case to continue to discovery. The judge also certified a nationwide class of Medicare beneficiaries of home health care services who had received adverse decisions at the first two levels of appeal on their Part A or Part B claims, and who had received an initial adverse initial determination on or after January 1, 2012.
Plaintiffs and the Secretary each served discovery and provided written responses and document production. Several depositions were held. The court stayed discovery deadlines as the parties discussed settlement.
On December 12, 2017, the parties filed a joint motion for preliminary approval of a settlement agreement and notice to the class. The proposed settlement applies to all beneficiaries whose appeals for coverage of home health services have been or will be denied at the first two levels of review and who received an initial determination or notice of termination of coverage for those services dated on or after January 1, 2012. Under the agreement, the Medicare agency will transmit four memoranda containing important principles for deciding home health appeals to the Medicare contractors that handle those decisions at the first and second levels of review. Class counsel, believes that the principles expressed in the transmittals are key to fair decision-making and will reinforce compliance with beneficiaries’ due process protections in the administrative appeal system. The court granted preliminary approval of the settlement and set a Fairness Hearing date. The notice to the class and the proposed settlement can be found here.
Update: A final fairness hearing was held in at the court in New Haven on February 26, 2018. No objections had been received by class counsel, and the court approved the settlement, finding it fair, reasonable, and adequate. The memoranda to the relevant Medicare contractors will be issued within 100 days of the fairness hearing, after which plaintiffs will file a stipulation of dismissal.
- Ryan v. Hargan, No. 5:14-cv-269 (D. Vt.) (Prior Favorable Homebound Determination) On December 19, 2014, the Center for Medicare Advocacy and Vermont Legal Aid filed a class action lawsuit against Sylvia Mathews Burwell, the Secretary of Health and Human Services, to stop Medicare’s practice of repeatedly denying coverage for home health services for beneficiaries on the basis that they are allegedly not homebound, when Medicare has previously determined them to be homebound. (Ryan v. Burwell). The lawsuit was filed in the United States District Court in Burlington, Vermont on behalf of two Vermont residents, Marcy Ryan and John Herbert, as a regional class action lawsuit covering New England and New York.
On March 25, 2015, the government filed a motion to dismiss on the grounds that plaintiffs lack standing, that the court lacks subject matter jurisdiction, and that plaintiffs have failed to state claim on which relief may be granted. On July 27, 2015, the court denied the government’s motion to dismiss, finding four separate grounds on which the dually eligible plaintiffs have standing. The court also found that it had subject matter jurisdiction and that plaintiffs had stated a claim on which relief could be granted.
On December 2, 2015, the court granted plaintiffs’ motion for class certification and, at request of the plaintiffs, issued clarification on the class definition on February 23, 2016. The regional class is defined as all beneficiaries of Medicare Part A or B in Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont (Medicare Administrative Contractor Jurisdiction K): (a) who have received a “favorable final appellate decision” that he or she was “confined to the home,” i.e. homebound, in the appeal of a home health nursing or therapy claim denial; (b) who have subsequently been denied, or will be denied, coverage for additional service on the basis of not being homebound, on or after January 1, 2010; (c) who had a non-lapsed, viable appeal of the subsequent denial for coverage of additional home health services as of March 5, 2015, or had a particularized individual basis for tolling of any applicable appeal deadline; and (d) for whom the claim for Medicare home health coverage was filed on or before August 2, 2015.
Written discovery was served. The government filed a motion for summary judgment in November 2016 and plaintiffs filed a cross motion and responded in December. However the parties then entered settlement talks and postponed further briefing while those negotiations proceeded.
On October 11, 2017, the parties filed a joint motion for preliminary approval of a proposed settlement agreement and notice to the class, which the court approved on October 27, 2017. Notice to the class was posted and is available here. The notice explains that The proposed settlement applies to Medicare beneficiaries in the northeast United States whose appeals for coverage of home health services were denied between January 1, 2010 and March 5, 2015 on the basis of not being homebound, and who had previously received a favorable appeal decision determining that they were homebound. More details on the class definition can be found in the notice to class members. The agreement will allow class members to have their eligible claims for home health services reviewed under the Prior Favorable Homebound provision, which directed that when a beneficiary had previously been found to be homebound in a Medicare appeal, that conclusion should be given “great weight” in any subsequent appeal for home health services, provided there had not been a significant change in the beneficiary’s condition.
A final fairness hearing was held at the court in Rutland, Vermont on January 11, 2018. No objections were received, and the court granted final approval of the settlement. CMS will be publishing on their website an application process for eligible class members to have their claims re-reviewed under the correct standard. Eligible class members will be required to identify themselves and their eligible claim to CMS no later than one year after the settlement application process is published. The settlement, available here, contains details on which beneficiaries are eligible for re-review and the procedural requirements.
Update: Class counsel will alert advocates when CMS has published the application process on its website.
- For more information, including a copy of the complaint, see: http://www.medicareadvocacy.org/federal-court-class-action-challenges-medicares-practice-of-repeatedly-denying-home-health-coverage-for-homebound-beneficiaries/.