Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

May 2018 – Recent Policy Changes Relating to Medicare Advantage & Other Issues

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  1. RECENT POLICY CHANGES RELATING TO MEDICARE ADVANTAGE

The first few months of 2018 have seen a number of changes in law, regulations and sub-regulatory guidance that impact the Medicare program, particularly Part C, known as Medicare Advantage (MA), and Part D, the prescription drug benefit.  The section below highlights some, but not all, of these changes to Medicare Advantage focusing on issues most relevant to Medicare beneficiaries and those supporting or assisting them.  

These changes are pursuant to the Bipartisan Budget Act of 2018 (BBA), which was signed into law on February 9, 2018 (Public Law No. 115-123) see Division E – Health & Human Services Extenders; the bill is available here.  A final rule for Parts C & D (CMS-4182-F) was published on April 16, 2018 – entitled “Medicare Program; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and the PACE Program”, 82 Fed Reg 16440 (April 16, 2018), is available here (also see this Centers for Medicare & Medicaid Services (CMS) press release summarizing the rule here).  The Final Call Letter, which is sub-regulatory guidance, was released on April 2, 2018, formally known as the Announcement of Calendar Year (CY) 2019 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter, is available here; also see CMS press releases discussing the Call Letter here and here. 

  • MA Uniformity Flexibility – Previously, the Medicare Advantage uniformity standard outlined at 42 CFR sec 422.100(d) was interpreted to mean that plan sponsors had to offer all enrollees in a plan in a given service area access to the same benefits at the same level of cost-sharing.  CMS is reinterpreting this uniformity requirement to allow plans to “reduce cost-sharing for certain covered benefits, offer lower deductibles for enrollees that meet specific medical criteria, provided that similarly situated enrollees (that is, all enrollees who meet the medical criteria identified by the MA plan for the benefits) are treated the same.  In addition, there must be a nexus between the health status or disease state and the specific benefit package designed for enrollees meeting that health status or disease state.” 83 Fed Reg 16480.  In other words, starting in 2019, MA plans can offer targeted benefits and/or reduced cost-sharing, at their discretion, based upon enrollees’ particular health condition(s).  Targeted supplemental benefits include the new, expanded interpretation of supplemental benefits discussed below.
    • Plan sponsors must use medical criteria that are objective and measureable, and the enrollee must be diagnosed by a plan provider or have their existing diagnosis certified or affirmed by a plan provider. Such objective criteria should be contained in written policies “that are clearly and adequately communicated to enrollees” such as in the Evidence of Coverage and other plan documents.  Information about additional benefits and/or reduced cost sharing will also be displayed in the Medicare Plan Finder.  83 Fed Reg 16481-4.
    • Plans can reduce cost-sharing for subsets of “high quality providers” and MA plans can identify high-value providers across all Medicare provider types (including physicians, hospitals, skilled nursing facilities, home health agencies, etc.  83 Fed Reg 16483-4.
    • On April 27, 2018, CMS issued additional guidance in the form of a memorandum entitled “Reinterpretation of the Uniformity Requirement” which will be incorporated into Chapter 4 of the Medicare Managed Care Manual. The memo included the following clarifications:
      • Plans have the option to limit targeted benefits to enrollees who agree to participate in a plan sponsored wellness, care management, or similar program as long as they have equal access (opportunity to enroll/participate regardless of health status, location or disability); cost sharing reductions or access to targeted supplemental benefits can be conditioned on enrollees meeting certain milestones based on participation (but can’t condition them based upon achieving any specific clinical goals).
      • Coverage requests from enrollees and providers related to targeted benefits should not be treated differently from request for other benefits furnished by the MA plan; thus, if a request fits under the definition of an organization determination under 42 CFR sec 422.566(b), such determination is subject to appeal.
  • Expanding Health-Related Supplemental Benefits – Under current MA rules, a plan sponsor can offer supplemental benefits defined as “an item or service not covered by original Medicare, that is primarily health related and for which the MA plan must incur a non-zero direct medical cost.” See Medicare Managed Care Manual (CMS Pub. 100-16), Chapter 4, section 30, et seq.

Such “item or service must be primarily health related; that is, the primary purpose of the item or service is to prevent, cure or diminish an illness or injury. If the primary purpose of the item or service is comfort, cosmetic or daily maintenance, then it is not eligible as a supplemental benefit.”  Supplemental benefits must be offered to all enrollees in the plan, and typically include things such as vision, hearing and dental services.

  • In the Final 2019 Call Letter, CMS states that is “expanding the scope of the primarily health related supplemental benefit standard.”  Whether a service or item is “primarily health related” will be determined under a three-part test for supplemental health care benefits:  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. (p. 208).  CMS adds: “Supplemental benefits under this broader interpretation must be medically appropriate and recommended by a licensed provider as part of a care plan if not directly provided by one; supplemental benefits do not include items or services solely to induce enrollment.” (p. 208)
    • Balanced Budget Act (BBA) of 2018 – supplemental benefits for the chronically ill – provides for a new type of supplemental benefit starting in 2020; according to CMS, these BBA benefits are qualitatively different than those that will be available in 2019 because they are only for those who are chronically ill, and can be provided only if there is a reasonable expectation of improving or maintaining health/function (can be tailored to individual enrollee’s specific conditions and needs, rather than a group of similarly situated enrollees with the same health condition(s)); in addition, the BBA benefits will not be limited to the primarily health related standard, so it will be possible “to address issues beyond a specific medical condition, such as social supports” but the basis for offering such benefits will be based solely on an enrollees’ qualification as “chronically ill” and “may not be based on conditions unrelated to medical conditions, such as living situation and income” – see discussion at 83 Fed Reg 16481-3.
    • 3 Types of Supplemental Benefits – in the preamble to the final rule, CMS explains the differed forms of supplemental benefits, which plans will have to explain in Evidence of Coverage documents (83 Fed Reg 16482):
      • “Standard” – offered to all enrollees (available now, as discussed above);
      • “Targeted” – offered to qualifying enrollees by health status or disease state (staring in the 2019 plan year, as discussed in this section);
      • “Chronic” – to chronically ill, pursuant to the BBA (starting in 2020); not limited to being primarily health related; possible to go beyond a specific medical condition, such as social supports.
    • On April 27, 2018, CMS issued additional guidance in the form of a memorandum entitled “Reinterpretation of ‘Primarily Health Related’ for Supplemental Benefits” which will be incorporated into Chapter 4 of the Medicare Managed Care Manual.  The memo includes the following clarifications:
      • A supplemental benefit is not primarily health related if it is an item or service that is solely or primarily used for cosmetic, comfort, general use, or social determinant purposes.
      • Coverage requests from enrollees and providers related to supplemental benefits should not be treated differently from request for other benefits furnished by the MA plan; thus, if a request fits under the definition of an organization determination under 42 CFR sec 422.566(b), such determination is subject to appeal.
      • CMS provides a non-exhaustive list of allowable supplemental benefits under this reinterpretation, including: adult day care services, home-based palliative care, in-home support services, support for caregivers of enrollees, medically-approved non-opioid pain management, stand-alone memory fitness benefit, home and bathroom safety devices and modifications, transportation (to obtain non-emergent, covered Part A, Part B, Part D, and supplemental benefit items and services to accommodate the enrollee’s health care needs), and over-the-counter benefits.  
  • “Meaningful difference” requirement eliminated – previously, MA plan sponsors offering more than one plan in a given service area had ensure the plan benefit packages were substantially different from one another with respect to key plan characteristics such premiums, cost sharing or benefits offered.  The rationale for this rule, as noted by CMS in the draft 2019 Call Letter, was “so that beneficiaries can easily identify the differences between those plans in order to determine which plan provides the highest value at the lowest cost to address their needs.” Despite this rationale, CMS is eliminating this requirement by amending 42 CFR §§422.254 and .256, in part, because it “is concerned the current requirement may result in organizations reducing the value of certain benefit offerings in order to make their benefit packages comply with these unnecessary limits.”
  • Timing and Electronic Delivery of Certain Beneficiary Documents – Annual Notice of Change (ANOC) must be delivered 15 days before first day of the Annual Coordinated Election Period (ACEP) (10/1), whereas Evidence of Coverage (EOC) must by delivered by first day of ACEP (10/15).
    • MA and Part D sponsors can now provide certain materials, such as the EOC, electronically, with provision of hard copy upon request.
  • Limitation to the Part D Special Enrollment Period for Dual and Other LIS-Eligible Beneficiaries –  Special Election Period (SEP) for dual-eligible and LIS beneficiaries revised from an open-ended monthly SEP to one that may be used only once per calendar quarter during the first nine months of the year (January through September).  Separate SEPs can be used in the following circumstances: (1) within a certain period of time after a CMS or state-initiated enrollment; and (2) within a certain period of time after a change to an individual’s LIS or Medicaid status.  42 CFR sec 423.38(c).

In the coming weeks, the Center will be releasing a detailed report on these and other changes, including analysis of the potential impact on beneficiary decision-making

  1. PROPOSED SKILLED NURSING FACILITY RULE  

Ever since the prospective payment system for Medicare coverage of skilled nursing facilities (SNFs) was first implemented in 1998, the system has faced ongoing criticism, chiefly over-utilization of therapy services and provides insufficient payment for nursing services and inaccurate payment for non-therapy ancillary services (chiefly prescription drugs).  In May 2017, the Centers for Medicare & Medicaid Services (CMS) published an Advance Notice of Proposed Rulemaking (ANPRM) to solicit comments on options under consideration for revising the reimbursement system.  82 Fed. Reg. 20980 (May 4, 2017).  CMS set out a proposed framework for a new Medicare payment system for SNFs, called Resident Classification System, Version I (RCS-I).  On May 8, 2018, as part of the annual update to Medicare SNF reimbursement, CMS abandoned RCS-I.  83 Fed. Reg. 21018 (May 8, 2018) (see https://www.gpo.gov/fdsys/pkg/FR-2018-05-08/pdf/2018-09015.pdf).  Instead, CMS proposes a different revised reimbursement system for SNFs, now called Patient-Driven Payment Model (PDPM).  However, although CMS describes PDPM as different from RCS-I, in fact, many of the most troubling features are identical, if not actually made worse in PDPM.  Concessions to the nursing home industry (including requirements for fewer resident assessments and permission to use group and concurrent therapy for up to 25% of a resident’s therapy services) do not improve care for residents and encourage gaming.

As described in detail in the NPRM, PDPM dramatically changes the financial incentives for SNFs.  Under PDPM, as under RCS-I, SNFs would receive higher reimbursement if they provided 15 or fewer days of Medicare coverage and no therapy.  Medicare reimbursement would also be higher if 50-75% of a SNF’s Medicare days were billed as non-rehabilitation.  In contrast, Medicare reimbursement would be lower for SNFs providing care to the oldest residents (age 90+), residents receiving three types of therapy, and residents having 31 or more days of care paid by Medicare.

  1.   OTHER POLICIES/PROPOSALS OPEN for COMMENT

The following includes a partial list of proposed rules and legislative proposals currently open for public comment:

  1.  HOME HEALTH UPDATE

Medicare Home Health Coverage is Not a Short Term Benefit

In 1997 Congress specifically recognized that Medicare home care was not a short term, acute care benefit and addressed payment methodologies under Parts A and B to meet the costs of longer-term home care.

The Balanced Budget Act of 1997, signed into law on August 5, 1997, made some major changes to the Medicare Act. One of those changes was to shift costs from Part A to Part B for certain home health costs. The law explicitly recognized that Medicare can cover home care for individuals who do not have a prior hospital or nursing home stay and for people who need longer term home care. In order to reduce costs for the Medicare Part A Trust Fund, however, Congress shifted the payment for this care to Medicare Part B for beneficiaries who have both Parts A and B.

Importantly, by addressing this issue, Congress decided to arrange for longer term Medicare home care (over 100 visits) and care without a prior acute institutional stay. Thus, in 1997 Congress reviewed Medicare home health coverage and chose not to limit it to a short-term, acute care benefit.

BBA ’97 Shifted Payment for Longer Term Home Health Care From Part A To Part B for Individuals Who Are Enrolled In Both Part A and Part B

The 1997 law fashioned a “post institutional home health service” benefit, which provides coverage under Part A for the first 100 visits per “spell of illness” and then shifts all other coverage during the same spell of illness to Part B.

Home Health Benefit Under Medicare Part A

For individuals enrolled in both Parts A and B, Part A became the payment source for post-institutional home care, paying only following a Medicare-covered three day hospital stay or discharge from a skilled nursing facility (SNF), in which the beneficiary received extended care services .In either case, in order to be paid under Part A, the home health services must commence within 14 days of discharge.

Part A home health services also became subject to a “spell of illness” or benefit period requirement. Part A will pay for up to a maximum of 100 home health visits per spell of illness. Since the provision of each type of home health service counts as a visit, patients can receive more than one visit each day, for example, when both a nurse and a home health aide attend to the patient of the same day. A “spell of illness” begins on the first day on which a beneficiary receives a post-institutional home health visit. Thereafter, a new “spell of illness” cannot start (with another 100 covered visits) until the patient has gone 60 consecutive days without receiving inpatient hospital, skilled nursing facility, or home health services.

Home Health Benefits Under Medicare Part B

All Medicare home health services for which a beneficiary qualifies, but which are not covered under Part A due to the imposition of the new post institution “spell of illness” requirement, or the need for care after 100 visits, are covered under Medicare Part B. The monthly Medicare Part B premium was adjusted to account for the costs of shifting these home health services from Part A to Part B.

            Home Health Benefits For Beneficiaries Enrolled Only In Part A Or Only In Part B

For individuals who are only enrolled in either Part A or Part B, the law did not apply a prior institutional requirement or 100 visit limitation. This is because the BBA ’97 “post institutional benefit” under Part A was created in order to shift longer term home health payments from the Part A Trust Fund to the Part B payment structure, not to limit Medicare home care coverage to a short term, acute care benefit

    CONCLUSION

By taking the action it did in the Balanced Budget Act of 1997, Congress specifically recognized that Medicare home care was not a short term, acute care benefit and addressed payment methodologies under Parts A and B to meet the costs of longer-term home care.

    Resources: Medicare Home Health Coverage is Not a Short Term, Acute Care Benefit

  • 42 CFR §409.38(a) and (b) –  (If criteria met, “payment may be … made for an unlimited number of covered home health visits”)
  • Medicare Benefit Policy Manual, Chapter 7, §40.1.1 – (Coverage is available “so long as” skilled care is needed) and §70.1 (Coverage available for” unlimited number of covered home health visits”). See also, §60.1-3 regarding payment responsibilities under Parts A and/or B)
  • Omnibus Reconciliation Act of 1980 (OBRA 1980), P.L. 96-499 – (Repealed the 100 visit annual cap on Medicare home health coverage. See attached article about this Congressional action.)

For more information, see CMA’s Weekly Alert “Medicare Home Health Coverage is Not a Short Term Benefit ‒ Congress Reiterated This in the Balanced Budget Act of 1997 (BBA ’97)” May 3, 2018.

  1. AFFORDABLE CARE ACT (ACA) SABOTAGE UPDATE

Unfortunately, the sabotage of health care continues. Last month, the Center working with other advocacy organizations, submitted comments for the Administration’s proposed rule on Short-Term Limited Duration Insurance. This refers to the “fake insurance” or “junk plans” that we have been highlighting for the last few months.  

In the comments, the Center expresses concerns over the harm this so-called “insurance” would do to consumers and the Marketplace.

These junk plans:

  • Don’t protect people with pre-existing conditions;
  • Have high out of pocket costs;
  • Don’t have to cover ACA essential health benefits;
  • May discriminate based on age or gender;
  • May impose lifetime and annual limits.

In addition, consumers who choose to remain in the individual market – including those who are older or have pre-existing conditions – will be left with higher costs. These worthless plans will hurt individuals and families who need quality comprehensive coverage.

Also this week, we heard reports that the Administration is examining weakening the ACA’s non-discrimination protections. Specifically, there are potential changes to Section 1557, which prohibits discrimination in health care.

The United States Department of Health and Human Services also issued the Notice of Benefit and Payment Parameters for 2019 final rule. This final rule is another assault on the Affordable Care Act (ACA) and its benefit and coverage protections. The Center for Medicare Advocacy, working with other advocacy partners, submitted comments and signed-on to letters opposing the rule when it was first proposed. We opposed “changes to the Essential Health Benefits (EHBs) standard which would lower the threshold of covered services and leave many consumers without access to the health care they need.” Unfortunately, the final rule, among other things, does just that.

The ACA requires insurers to cover Essential Health Benefits, which include ambulatory services, emergency services, hospitalization, maternity care, mental health and substance abuse, prescription drugs, rehabilitative services, laboratory services, preventive and wellness services, and pediatric services. The weakening of these essential benefits through regulation will lead to more and more plans that provide little or no coverage for people when they get sick or injured. In addition to undermining EHB’s, the final rule also negatively impacts network adequacy, rate review, navigators and the Medical Loss Ratio. 

  1.    LITIGATION UPDATE
  • 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: https://www.medicareadvocacy.org/submit-your-observation-status-story/

 

  • Dobson v. Azar, No. 4:18-cv-10038-JLK (S.D. Fla.) (Part D Off-Label Drug). On April 6, 2018 the Center for Medicare Advocacy and Florida Health Justice Project filed a lawsuit in the United States District Court for the Southern District of Florida on behalf of a 49-year-old Medicare beneficiary seeking Part D coverage for the “off-label” (non-FDA-approved) use of a critically needed medication.  The plaintiff is disabled from a traumatic workplace injury that damaged his spinal cord. As a result of severe pain and multiple surgeries, he suffers daily from debilitating nausea and vomiting. After numerous medications failed to provide relief, his doctor prescribed Dronabinol, which significantly relieved his nausea and vomiting and allowed him to resume many activities of a normal life.

When Mr. Dobson became eligible for Medicare Part D, his plan denied coverage because his particular use of Dronabinol is not FDA-approved.  However, the Part D plan should cover the medication because Mr. Dobson’s use of the drug is supported by one of the “compendia” (DRUGDEX) of medically-accepted indications listed in the Medicare law. Medicare looks to the compendia for acceptable off-label uses of medications, and the symptoms of nausea and vomiting are listed in an entry for Dronabinol.  The plaintiff’s position is strongly supported by a recent federal decision granting Part D coverage of the same medication for a beneficiary with very similar symptoms (Tangney v. Burwell, 186 F. Supp. 3d 45 (D. Mass. 2016)).  In spite of this, Mr. Dobson was denied coverage at each level of administrative review.  In appealing his claim to federal court, we will contest the agency’s use of an inappropriately restrictive reading of the law to claim that coverage cannot be granted.  The goal is to get Mr. Dobson the medication he desperately needs, and help ensure appropriate application of the law governing off label uses in other cases.

 

  • 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.”

 

  • 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: abers@medicareadvocacy.org.

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

 

  • 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.

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