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And Proposals for the Future of Medicare



During our October 2012 Alliance call, we discussed that through the Center’s extensive experience with the Medicare administrative appeals process, we continue to find that: 1) the success rate for beneficiaries at the initial levels of appeal is generally very low; and 2) once appeals get to the Administrative Law Judge (ALJ) stage, where chances of success improve dramatically, and at the subsequent stage of appeal, the Medicare Appeals Council (MAC), the issuance of decisions often far exceeds built-in timeframes (e.g., 90 days).  See the Issue Brief for the October 2012 call at:

The statistics on success rates – better viewed as denial rates – at the lower levels of review are quite staggering.  The Center for Medicare Advocacy has been handling thousands of home health and SNF cases for over 20 years.  In the early to mid-90s, about 30 to 40% of all appeals at the redetermination and/or reconsideration levels of CMA-represented appeals were favorable to the beneficiaries.  In the late 90s, that percentage began to drop significantly, so that only 15 to 20% were granted.  The number of granted appeals continued to fall throughout the early part of the last decade, while the number of denials increased.  In the last two full years (2011 and 2012), there were close to 8,000 denials in each year, with about 300-400 favorable to beneficiaries.  In those years, the percentage granted in home health cases was under 1% — 0.50% in 2011 and 0.96% in 2012.  CMS has confirmed that these statistics are consistent with the national rates.

These results are so skewed against beneficiaries as to be counterproductive.  Rather than providing a step at which beneficiaries could obtain a relatively informal review of their initial determination denial, which is the purpose of those levels, they operate as time- and effort-wasting hurdles that have to be confronted before a beneficiary has any chance of success, which is at the ALJ level.  CMS informally takes the position that the lower level denial rates represent a measure of the accuracy of the initial determination stage, that redetermination and reconsideration are quality control mechanisms rather than an available tool for beneficiaries.  If beneficiaries are losing over 99% of the time, the system simply does not work.

  • We’d like to hear from you – what are your experiences?
  • Additional issues we’re concerned about and want to know if Alliance members are also seeing:
  • Not getting Exhibit Lists from ALJs prior to hearings;
  • Not getting copies of medical records in the Office of Medicare Hearings and Appeals (OMHA) case files from ALJs prior to the hearing;
  • Taking up to a year or more to get date for an ALJ hearing and then waiting a long time for decisions.


Over the last few years, there have been several proposals that seek to alter Medicare's benefit structure, under the guise of streamlining or simplifying the program.  Such proposals are receiving increased attention by policymakers in Washington on both sides of the aisle. Upon closer inspection, however, these proposals would actually harm the majority of beneficiaries.  Many of these proposals have similar elements, including creating a single, combined deductible for Parts A and B, a uniform coinsurance rate of 20% for all covered services, an out-of-pocket cap on beneficiary expenses (which does not currently exist in Traditional Medicare) and various other piecemeal changes, including introducing home health copayments.  Often these proposals to redesign Medicare's benefits are coupled with proposals to restrict Medigap "first-dollar coverage", in other words, policies that provide coverage for Medicare deductibles and co-payments.

While taking a measured look at Medicare’s benefit structure and how it could be improved would be a welcome exercise, these proposals are being discussed now in the context of deficit reduction with the aim of saving federal dollars rather than truly improving the program for those is serves.  For more information, see:


  • 2013 Revised Budget Timeline: the budget debt/deficit reduction debate will likely continue throughout the year:
  • House and Senate have released and passed their respective budgets
  • Sequestration went into effect, including 2% provider cut in Medicare, effective April
  • President releases proposed budget April 10th
  • FY2013 Continuing Resolution (CR) expires – March 27
  • Debt ceiling may need to be raised May-August
  • Medicare physician’s payment (sustainable growth rate, or SGR) expires Dec 31


The over seven million people dually eligible for both Medicare and Medicaid represent some of the poorest and most vulnerable health care consumers in the nation. In an effort to improve care coordination and reduce unnecessary costs, CMS and states are moving forward with demonstrations to integrate care for dual eligible beneficiaries.   Five states- Massachusetts, Ohio, Washington, Illinois and California have entered into Memorandum of Understanding (MOU) with CMS. All but one of these states (Washington) will be moving large numbers of their dually eligible residents into capitated managed care. Most beneficiaries will begin receiving notices July 2013 with the first waves of enrollment in many states beginning in October 2013.

State and national advocates have continually stressed the importance of consumer protections in these demonstrations, including the need for a state based ombuds that is adequately funded and independent from the state Medicaid agency. Ideally, an ombuds would be a trusted, community-based organization that has a deep knowledge of Medicare and Medicaid. The core functions of the ombuds are individual assistance, system monitoring and reporting and consumer education and empowerment.

Individual assistance, at its core, is making sure consumers can navigate the complexities of managed care and get the right care, in the right setting at the right time. The ombuds would assist members in exercising  their rights- including around community integration and Omlstead rights, help consumers access covered benefits, assist with enrollment and disenrollment decisions, assist with plan denial appeals and help resolve quality of care issues, to name a few. An ombuds would also be responsible for system wide monitoring and reporting, and could provide policymakers and stakeholders an “on the ground” beneficiary perspective on how the demonstrations are performing.  An effective ombuds would reach out to, and be a resource for, consumers, caregivers and advocates.

We encourage you to find out if your state has a dual eligible demonstration and to get involved. In particular, push your state for an independent ombuds program to ensure dual eligible beneficiaries are protected and the demonstrations are a success.

For more information about the dual eligible demonstrations and the ombuds program see:


  • Jimmo v. Sebelius (Improvement Standard) No. 11-cv-17 (D.Vt., filed 1/18/11).  As reported during the last Alliance call, the Settlement in this case was approved on January 24, 2013 during a scheduled fairness hearing.  With the settlement now officially approved, the Centers for Medicare & Medicaid Services (CMS) is tasked with revising its Medicare Benefit Policy Manual and numerous other policies, guidelines and instructions to ensure that Medicare coverage is available for skilled maintenance services in the home health, nursing home and outpatient settings.  CMS must also develop and implement a nationwide education 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. A new CMS Factsheet on Jimmo was recently made available online and will be discussed on the call.

The Factsheet is available at:

For more information, see the Center’s website at:

  • Bagnall v. Sebelius (Observation Status) No. 3:11-cv-01703 (D. Conn., filed 11/3/2011). On November 3rd, the Center for Medicare Advocacy filed a 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. Here is a link to the Press Release announcing the suit:

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