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  1. Alexander v. Azar Trial Update – Seeking an Appeal of Outpatient Observation Status
  2. CMS Could Truly Put “Patients over Paperwork” By Fully Implementing the Jimmo Settlement
  3. Comparing Spending on Medicare Advantage vs. Accountable Care Organizations (ACOs)
  4. Recorded Webinar: Proposed Changes to Nursing Home Standards

Alexander v. Azar Trial Update – Seeking an Appeal of Outpatient Observation Status

Since 2011 the Center for Medicare Advocacy has been pursuing a nationwide class action lawsuit seeking an appeal for Medicare beneficiaries who are classified as hospital outpatients in observation status. (Alexander v. Azar, 3:11-cv-1703, U.S. District Court, Connecticut.) Co-counsels in the case are Wilson, Sonsini, Goodrich & Rosati and Justice in Aging.

The Alexander trial was held before US District Court Judge Michael Shea from August 12 – 20, 2019. The Judge ordered post-trial briefing, which is expected to take approximately 75 days. Then the parties will await Judge Shea’s decision.

Medicare beneficiaries who received “observation services” in a hospital on or after January 1, 2009 and either did not have Medicare Part B, or, were hospitalized for at least three consecutive days but not three days as an inpatient, may be a member of the Alexander class. No action is required to “join” the class. Individuals who meet the class definition, are in the class (note that the class definition is subject to change). We recommend saving paperwork related to the hospital observation status and to costs that may have resulted from it.

We also encourage you to share your observation status story with the Center for Medicare Advocacy here.


CMS Could Truly Put “Patients over Paperwork” By Fully Implementing the Jimmo Settlement

The Centers for Medicare & Medicaid Services (CMS) launched a “Patients over Paperwork” initiative in 2017 “to evaluate and streamline regulations with a goal to reduce unnecessary burden, to increase efficiencies, and to improve the beneficiary experience.”[1] Unfortunately, most of CMS’s efforts under this initiative focus on reducing so-called provider “burden” instead of improving beneficiary experience. As a result, Medicare beneficiaries and their families continue to experience the greatest possible burden: unnecessary and unlawful barriers to care. For example, the Center for Medicare Advocacy (the Center) still regularly hears from beneficiaries and families about the denial of Medicare-covered skilled care in home health, outpatient therapy, and skilled nursing facilities solely because the beneficiary is not improving. These denials violate the settlement agreement in Jimmo v. Sebelius.[2]

The Jimmo Settlement, approved by a federal district court in 2013, confirmed that Medicare coverage should be determined based on a beneficiary’s need for skilled care (nursing or therapy), not on the potential for improvement. Relevant chapters of the Medicare Benefit Policy Manual now clearly state that “[s]killed care may be necessary to improve a patient’s condition, to maintain a patient’s current condition, or to prevent or slow further deterioration of the patient’s condition.”[3] Sadly, more than six years after the Settlement’s approval, the ongoing lack of knowledge about Jimmo continues to harm beneficiaries in both traditional Medicare and Medicare Advantage.

CMS could dramatically reduce beneficiary burden by insisting that the Jimmo Settlement is fully implemented. This would ensure people living with longer-term, chronic, and debilitating conditions can obtain, and retain, necessary care to maintain their conditions or slow deterioration. The barriers such patients and their families currently face are unjust and often unsustainable. While CMS recently spotlighted the Jimmo Settlement on its “Skilled Nursing Facility Center” webpage, the Center urges more assertive action. CMS should provide more extensive education about Jimmo to providers, contractors, and adjudicators. It should actively monitor these entities and ensure Jimmo is implemented.

Our 2018 national survey of Medicare providers found that a shocking 40 percent of respondents had never even heard about the Settlement. 30 percent were not aware that Medicare coverage does not depend on the beneficiary’s potential for improvement. Given that beneficiaries and families affected by such unlawful Medicare denials may have to go through multiple levels of appeal and/or forego care, improving beneficiary experience by addressing Jimmo implementation problems would truly put patients over paperwork.


[1] What is Patients over Paperwork, CMS, (last visited Aug. 21, 2019).
[2] No. 5:11-CV-17 (D. VT).
[3] CMS Transmittal 179, Pub 100-02, 1/14/2014; see also Medicare Benefit Policy Manual (MBPM), Chapter 7 – Home Health Services, Sections 20.1.2, 40.1-40.2; MBPM, Chapter 8 – Coverage of Extended Care (SNF) Services Under Hospital Insurance, Sections 30.2 30.4; MBPM, Chapter 15 – Covered Medical and Other Health Services, Sections 220, 220.2-220.3, 230.1.2.


Comparing Spending on Medicare Advantage vs. Accountable Care Organizations (ACOs)

A new entry in the Health Affairs Blog, “Evaluating Medicare Programs Against Saving Taxpayer Dollars,” compares Medicare’s two payment programs that are paving the way to “value-based” care: the Medicare Shared Savings Program (MSSP) and Medicare Advantage (MA) program. They are both growing rapidly, the authors note, and, together, they comprise over half of Medicare beneficiaries today. The MSSP is Medicare’s program for Accountable Care Organizations (ACOs), a growing model of care delivery where providers can share in cost savings if they are able to reduce total health care spending for their patients while maintaining high-quality care.

The authors[1] make the basic yet often overlooked point that a beneficiary in MA increases total spending in Medicare, on average; conversely, the MSSP, which is part of Traditional Medicare, generates savings for the government. The increase in spending in the Medicare Advantage program is attributed to generous payments to health plans through risk adjustment and the quality star rating program, which have succeeded in attracting private insurance companies to participate, but which are rife with gaming. They also note, as referenced in a recent CMA Alert, that CMS is likely overpaying Medicare Advantage plans because patients who remain in Traditional Medicare systematically demonstrate lower spending patterns than those who decide to enter Medicare Advantage.

The authors propose a number of policy solutions to begin to correct imbalances. These solutions include structural changes and technical tweaks, with the goal of improving both programs and ensuring that they are equally funded and supported by CMS.


[1] Including Sean Cavanaugh, former Deputy Administrator and Director of the Center for Medicare at the Centers for Medicare & Medicaid Services, and Center for Medicare Advocacy Board Member.


Recorded Webinar: Proposed Changes to Nursing Home Standards

The Centers for Medicare & Medicaid Services (CMS) recently issued a notice of proposed rulemaking to roll back several nursing home standards of care. The Long Term Care Community Coalition (LTCCC) hosted a webinar on August 20, 2019, to help consumers understand the impact of these proposed changes. Dara Valanejad, a Policy Attorney at both the Center for Medicare Advocacy and LTCCC, participated in the webinar. Discussing the impact of the proposed changes, Mr. Valanejad detailed how the proposal would gut standards for resident grievances and make it easier for facilities to administer antipsychotic drugs to residents.


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