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1. UPDATES on the BENES Act and PART D LEGISLATION

Guest Speaker:  Lindsey Copeland from the Medicare Rights Center

Beneficiary Enrollment Notification and Eligibility Simplification (BENES) Act (S. 1280/H.R. 2477)

Part D Appeals Bill

  1. OVERVIEW of the ADMINISTRATION’S ROLLBACK of NURSING HOME PROTECTIONS

The following is a joint statement from the Center for Medicare Advocacy, Long Term Care Community Coalition, Consumer Voice, Justice in Aging and California Advocates for Nursing Home Reform.  It is available on the Center’s website at: https://www.medicareadvocacy.org/wp-content/uploads/2019/01/Nursing-Home-Briefing-Statement.pdf.

Nursing Home Residents at Risk: A Briefing for Members of Congress 

The Nursing Home Reform Law requires every nursing home to provide residents with the services they need to attain and maintain their “highest practicable physical, mental, and psychosocial well-being.” To ensure that residents receive the care that they need and deserve, the law and its implementing regulations detail specific resident rights and protections that all nursing homes must adhere to when they voluntarily participate in Medicare and/or Medicaid. Unfortunately, the Centers for Medicare & Medicaid Services (CMS) has been rolling back these resident rights and protections, often at the request of the nursing home industry, for the purpose of reducing so-called provider “burdens.”

The following actions represent only a few of CMS’s deregulatory efforts over the past two years:

  1. CMS placed an 18-month moratorium on the full enforcement of eight standards of care. These standards relate to important resident protections, such as baseline care planning, staff competency, antibiotic stewardship, and psychotropic medications. The moratorium means that nursing homes will not be financially penalized when these safeguards are violated.
  2. CMS shifted the default civil money penalty (CMP) from per day (for the duration of a violation) to per instance. The New York Times reported that “the change means that some nursing homes could be sheltered from fines above the maximum per-instance fine of $20,965 even for egregious mistakes.”
  3. CMS issued a notice of proposed rulemaking (NPRM) to roll back emergency preparedness requirements. Most notably, the proposed rule would allow nursing homes to review their programs and train staff every two years instead of annually.
  4. In response to industry lobbying, CMS is carrying out plans to revise the federal nursing home Requirements of Participation to “reform” standards that have been identified as “excessively burdensome” for the nursing home industry. The Requirements were recently revised in 2016 (for the first time in 25 years) to better address longstanding problems, including persistent abuse and neglect. These standards need to be implemented, not watered down.

Nursing home residents are some of the most vulnerable individuals in the nation. CMS’s deregulatory agenda puts residents in danger of experiencing harm or being placed in immediate jeopardy of health, safety, or well-being. This potential for resident harm is in direct opposition to the HHS Secretary’s duty under the law. The law makes clear that the Secretary is responsible for assuring the “requirements which govern the provision of care in skilled nursing facilities…, and the enforcement of such requirements, are adequate to protect the health, safety, welfare, and rights of residents and to promote the effective and efficient use of public moneys.” CMS’s actions indicate that the Secretary is ignoring this long-standing mandate.

CMS’s efforts are even more dangerous because they exacerbate existing problems in nursing homes. Multiple reports from the HHS Office of the Inspector General (OIG) and the Government Accountability Office (GAO) document persistent and widespread problems facing nursing home residents. For instance, a 2014 OIG report found that one-third of Medicare beneficiaries experienced harm within, on average, 15.5 days of entering a nursing home; the OIG stated that 59 percent of these events were preventable. Similarly, a 2008 GAO report highlighted that studies since 1998 indicate state surveyors “sometimes understate the extent of serious care problems in homes because they miss deficiencies . . . .” Such persistent problems over the years have created greater insecurity for residents, requiring additional legislation and regulations, not less.

The following problems include only some of the ongoing concerns:

  1. More than 95 percent of all citations for violations of the federal minimum standards of care result in findings of no resident harm. A “no harm” citation does not mean that the resident did not, in fact, experience pain, suffering, or humiliation. However, a finding of “no harm” all too often does mean that the nursing home is not penalized for poor care.
  2. Staffing is essential to resident care and quality of life. Too often, insufficient staffing is the underlying cause of other health violations. By law, nursing homes must have a registered nurse on duty for eight consecutive hours and 24-hour licensed nurse services every single day. This is recognized as the minimum necessary to ensure that residents receive the “skilled nursing” care and monitoring that they need and which facilities are paid to provide. However, CMS noted in a 2017 memorandum that about six percent of nursing homes that submitted nurse staffing data for the third quarter of 2017 had seven or more days with no reported RN hours and that 80 percent of these days were on weekends. The New York Times further found that, for at least one day in the last quarter of 2017, 25 percent of nursing homes reported no registered nurses at work.
  3. Antipsychotic Drugs. About 20 percent of nursing home residents are administered antipsychotic drugs every day. However, less than two percent of the population will ever have a diagnosis for a clinical condition (e.g., Schizophrenia) identified by CMS when it risk-adjusts for potentially appropriate uses of these drugs. In a 2011 statement addressing widespread and inappropriate use of antipsychotic drugs in nursing homes, the HHS Inspector General stated that “[g]overnment, taxpayers, nursing home residents, as well as their families and caregivers should be outraged – and seek solutions.” Nevertheless, seven years later, in the absence of meaningful enforcement the problem is still widespread.
  4. Transfer and Discharge. CMS has stated that “facility-initiated discharges continue to be one of the most frequent complaints made to State Long Term Care Ombudsman Programs.” Although the Nursing Home Reform Law places specific restrictions on when and how a resident can be transferred or discharged, many residents fall victim to inappropriate and unsafe discharges. Residents have been discharged to unsafe and inappropriate settings, such as homeless shelters, storage units, and motels.
  5. The buying and selling of nursing homes and the transfer of licenses to new managers raise questions about who these operators are and whether there are sufficient state and federal law, regulations, and practices in place, and meaningfully enforced, to protect residents. For instance, Skyline Healthcare took over 100 nursing homes across the country starting in 2015 before ultimately collapsing in 2018. Officials from various states indicated that Skyline was at imminent risk of running out of necessary food and medication, and was unable to meet payroll. Many of Skyline’s nursing homes were acquired from Golden Living, another chain that was sued by the Pennsylvania Attorney General in 2015 for providing poor care to residents.

Nursing home residents are in need of urgent action to protect their quality of care and quality of life. Given the ongoing problems that already exist in nursing homes, CMS’s deregulation places residents at an even greater risk of experiencing harm. Our organizations would like the opportunity to work with you to address the needs of this exceptionally vulnerable population. Please do not hesitate to contact us if you have any questions or concerns about long-term care issues.

  • OBSERVATION STATUS UPDATE

Observation Status and Surprise Medical Bills

The Center for Medicare Advocacy frequently hears from Medicare beneficiaries and their families about patients who receive treatment, tests, and services for multiple days while they are in a hospital bed but who are called “outpatients.” If these patients need post-hospital care in a skilled nursing facility (SNF), Medicare Part A will not pay for their stay and they must pay out-of-pocket, solely because the hospital did not call them “inpatients” for three consecutive days.[1]  Three consecutive inpatient days is a prerequisite for most Medicare SNF coverage.

Coincidentally, there is growing momentum in Congress to address the issue of “surprise medical bills” – unexpected bills for medical care that patients could not have predicted or prevented, but nevertheless receive.[2] Congressman Joe Courtney (D, CT) has described observation status as “surprise medical bills on steroids.” He is absolutely correct. One of the most surprising medical bills that many beneficiaries receive is the bill for a SNF stay after they have been hospitalized for multiple days.

The issue of how hospitals bill Medicare for a patient’s stay – whether the hospital submits the bill to Medicare Part A (inpatient) or to Medicare Part B (outpatient) for medically necessary hospital care – deprives potentially hundreds of thousands of Medicare patients each year of their Part A SNF benefit. A 2016 report by the HHS Office of Inspector General found that 633,148 patients in Fiscal Year 2014 had spent three or more midnights in the hospital that did not include three inpatient midnights.[3] There is nothing that patients can do about their status in the hospital. Although the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) requires hospitals to inform patients of their status as outpatients,[4] Medicare regulations expressly prohibit patients from appealing observation status.[5]

The Center supports a comprehensive approach to surprise medical bills that includes addressing outpatient observation status for beneficiaries and incorporating the Improving Access to Medicare Coverage Act of 2019 (H.R. 1682/ S. 753).[6]

Three Recent Calls to the Center Illustrate the Absurdity of Observation Status

  • A 94-year old man was sent by his assisted living facility to the hospital when staff were concerned that he might have had a stroke.  The World War II veteran remained hospitalized for three days – two days in observation and one day as an inpatient. Since he did not have a three-day inpatient hospital stay, he had to pay out-of-pocket for his SNF stay. The facility required payment of $11,861, in advance, for one month. His total bill, for little more than two months, was nearly $35,000. Since the hospital classified the man as an inpatient, the hospital received the full inpatient hospital payment rate for his care. If it had classified him as an inpatient for all three days, Medicare would have also covered his SNF stay, some or all of it.
  • A woman had knee replacement surgery and was hospitalized for three days as an “observation status” patient. Despite her three-day hospital stay, she had to pay for her subsequent 10-day SNF stay, at $455 per day (total $4550). Ten years earlier, knee replacement surgery on her other knee – by the same physician at the same hospital – was done on an inpatient basis. Medicare covered her care in the hospital and for three weeks of rehabilitation in a SNF.
  • An older woman fell. With a bone sticking out of her leg, she was hospitalized – the first day (when she had surgery) in observation, followed by two days as an inpatient.  Lacking a three-day inpatient stay, she had to pay $7000 for admission to a SNF. Her total SNF bill was more than $18,000. The hospital was paid the inpatient rate for her stay, but Medicare did not pay for her SNF stay because her first day in the hospital was classified as outpatient observation.

Too many Medicare beneficiaries are paying for SNF stays, or foregoing necessary care, because of how hospitals bill Medicare for their patients’ stays. Congress needs to comprehensively address the issue of surprise medical bills to include outpatient observation status issues and the Improving Access to Medicare Coverage Act.

2. LITIGATION UPDATE

Affordable Care Act (ACA) Case

Oral argument in Texas v. United States, No. 19-10011, the lawsuit seeking to dismantle the Affordable Care Act (ACA), was held on Tuesday July 9, 2019 in the Fifth Circuit Court of Appeals. At stake in this case is the health care of millions of Americans. The case will affect the entire health care system and every aspect of the ACA, not just the much-discussed pre-existing conditions. People at risk of losing protections and benefits include older Americans and Americans currently on employer insurance, not just those who rely on the Affordable Care Act exchanges for coverage.

The Center for Medicare Advocacy joined AARP and Justice in Aging in filing an amicus brief in Texas v. United States, urging the Fifth Circuit Court of Appeals to reverse the trial court’s December 2018 ruling that would nullify the entire Affordable Care Act (ACA).  See the Center’s press release dated April 1, 2019.

For more information, see these resources from the Kaiser Family Foundation:

Center for Medicare Advocacy Cases

  • Alexander v. Azar (formerly Bagnall v. Sebelius, Barrows v. Burwell), 3:11-cv-1703 (D. Conn.) (Beneficiary Appeals of 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 an 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 the protected property interest issue and defendant’s supplemental motion to dismiss, the court issued a decision on February 8, 2017, denying both parties’ 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 had 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).

Plaintiffs then filed a renewed motion for class certification, and 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.

A second round of discovery closed on June 15, 2018, with both parties having conducted numerous depositions and exchanging documents. The government filed for summary judgment for a second time on July 30, 2018, this time on the “what process is due” element of plaintiffs’ claim. The government focused on the three factors from Mathews v. Eldridge, 424 U.S. 319 (1976), which determine what procedural safeguards are due – with a particular focus on the risk of erroneous deprivation of the private interest at stake under the current procedures used (note: there are currently no procedures for beneficiaries to appeal their hospital status) The government also filed a motion to decertify the class on August 24, 2018, although the court had discouraged it.

A hearing was held on November 26, 2018 to address the motion for summary judgment on the Eldridge factors, the motion to decertify the class, and the court’s own question on whether it should bifurcate the trial to deal with the protected property interest separately. However, the hearing focused mostly on the court’s questions about the criteria plaintiffs rely on for a protected property interest, in particular CMS’s “Two-Midnight Rule,” which plaintiffs have argued is the governing standard for inpatient admission since it was introduced in 2013. The court gave plaintiffs an opportunity to amend their complaint as it relates to the Two-Midnight Rule, which plaintiffs declined because the second complaint in intervention (filed in 2015) already makes sufficient allegations about the Rule. Over the objection of plaintiffs, the court decided that the government should have an additional opportunity to address whether the Two-Midnight Rule can create a protected property interest. The court removed the scheduled trial from the calendar and directed the government to file another, supplemental summary judgment motion specifically on whether the Two-Midnight Rule can serve to create a protected property interest. It also directed the government to address how the court should treat the remaining claims from the original complaint and first complaint in intervention if it grants summary judgment with respect to the property interest theory based on the Two-Midnight Rule. On December 6, 2018, the government alerted the court and plaintiffs that in addition to the supplementary summary judgment motion, it would also file a motion to dismiss claims from the first two complaints for lack of subject matter jurisdiction pursuant Fed. R. Civ. P. 12(h)(3).

The case was initially stayed during the partial government shutdown of late 2018 and early 2019, which delayed the briefing schedule. But the court eventually put the schedule back in motion despite the shutdown. On January 30, 2019, the government filed its supplemental summary judgment motion regarding a protected property interest based on the Two-Midnight Rule, and a motion to dismiss based on lack of subject matter jurisdiction (claiming that all of the named plaintiffs lack standing and that their claims are moot). The motions were fully briefed as of March 6, 2019.

On March 27, 2019, the court issued a ruling denying the government’s motion for summary judgment, motion to decertify the class, and motion to dismiss. The judge concluded that evidence submitted by the plaintiffs could reasonably establish that physician decisions about whether to classify beneficiaries as inpatients are “meaningfully constrained” by criteria set by Medicare, including the Two-Midnight Rule since it came into effect in 2013, and class members may therefore possess a property interest in the inpatient Medicare coverage they seek. It also found that a trial was necessary to balance the evidence submitted about the three Mathews v. Eldridge factors. The court declined to dismiss the case, finding that the plaintiffs continue to have standing and that their claims are not moot. The court also did not take the drastic step of decertifying the nationwide class, but did modify the class definition to target individuals who, in the court’s view, are more certain to experience harm from the observation designation. The definition is now:

All Medicare beneficiaries who, on or after January 1, 2009: (1) have received or will have received “observation services” as an outpatient during a hospitalization; (2) have received or will have received an initial determination or Medicare Outpatient Observation Notice (MOON) indicating that the observation services are not covered under Medicare Part A; and (3) either (a) were not enrolled in Part B coverage at the time of their hospitalization; or (b) stayed at the hospital for three or more consecutive days but were designated as inpatients for fewer than three days. Medicare beneficiaries who meet the requirements of the foregoing sentence but who pursued an administrative appeal and received a final decision of the Secretary before September 4, 2011, are excluded from this definition.

The court requested additional briefing from the parties on whether it should create two subclasses, consisting of people whose hospitalizations occurred before the Two-Midnight Rule came into effect in October 2013, whose assertion of a protected property interest relies on the application of commercial screening tools in determining patient status, and those whose hospitalizations occurred after the Two-Midnight Rule came into effect, who rely on the Rule itself. The court inquired whether the subclasses may require separate counsel, or whether they should be created solely for “case management” purposes. Plaintiffs responded that the creation of subclasses was not required. Separate counsel is not necessary as there is no conflict between the two identified groups, and the creation of subclasses would not alter how plaintiffs present their case. The government argued that subclasses should be created, including the appointment of separate counsel.

The court held a telephonic status conference on April 3, 2019 to discuss scheduling, and subsequently issued an order setting trial to bring on August 12, 2019. On the same day, the government also filed a motion for clarification and reconsideration of the court’s March 27 ruling. It asked the court to identify what the criteria for admission are under the Two-Midnight Rule and the “legal framework” the court applied in determining that such criteria would give rise to a protected property interest. The government also requested that the court reconsider the new class definition on the grounds that not everyone who is hospitalized for three days requires follow-up SNF care. (This issue was addressed by the parties in previous briefing.)

Update: On June 4, 2019, the court issued a ruling denying the government’s motion for reconsideration, meaning the class definition remains the same for now. The court also declined to further detail its reasoning on the issue of a protected property interest. Additionally, the court decided that it would not subdivide the class, formally or otherwise. The parties have exchanged exhibits and they filed a joint trial memorandum with the court on July 12. The government also filed a motion in limine seeking to exclude some of plaintiffs’ evidence. A pretrial conference will be held on July 29, and the bench trial will begin on August 12, 2019.

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/

 

  • M. v. Azar, No. 2:19-cv-114-cr (D. Vt.) (coverage of home health services). On July 2, 2019, Vermont Legal Aid and the Center for Medicare Advocacy filed a lawsuit in federal court in Vermont, on behalf of a Medicare beneficiary whose was denied coverage of home health services. The beneficiary required skilled nursing visits to assess and treat her multiple serious medical conditions. The case challenges the Medicare agency’s failure to follow applicable law, including the standard clarified in the Jimmo v. Sebelius settlement, which requires the determination of whether individuals are eligible for Medicare coverage to be made on the basis of beneficiaries’ need for skilled care, not on their potential for improvement. This determination should be based on each beneficiary’s unique condition and individual needs. In this case, the plaintiff challenges the Secretary’s conclusion that her “stable” condition precludes a determination that she required skilled care and qualified for Medicare coverage of home health services. In addition, she challenges the agency’s failure to afford appropriate weight to the opinion of her treating physician about her need for skilled care.

 

  • Dobson v. Azar, 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.

The parties consented to proceed before a magistrate judge on June 13, 2018. Briefing on cross-motions for summary judgment was complete as of December 3, 2018. On January 10, 2019, the court alerted the parties that the case had been reassigned to a different magistrate judge. The parties consented to jurisdiction by the new magistrate judge on February 7, 2019.

  • 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: 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

 

  • Ryan v. Price, 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.

CMS has published the application process on its website. Eligible class members must identify themselves and their eligible claims to the CMS by completing and submitting the “Ryan Re-Review Form,” along with any supporting documentation, no later than August 1, 2019.  The form provides information to assist in determining whether the beneficiary’s claims qualify for re-review under the settlement (for example, the home health services have to have been received on or before August 2, 2015, and denied on or after January 1, 2010). The re-review form and other important information about the settlement are published on CMS’s website here. Please contact Vermont Legal Aid or the Center for Medicare Advocacy with questions about the settlement.

Ryan Re-Review Form: https://www.cms.gov/Center/Special-Topic/Ryan-Settlement/Ryan-Re-Review-Form.pdf

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[1] See the Center’s materials on observation status at https://www.medicareadvocacy.org/?s=observation+status&op.x=0&op.y=0.
[2] CMA, “Congressional Hearing on Surprise Medical Bills; Center for Medicare Advocacy Submits Statement on Observation Status” (CMA Alert, May 23, 2019), https://www.medicareadvocacy.org/congressional-hearing-on-surprise-medical-bills-center-for-medicare-advocacy-submits-statement-on-observation-status/.
[3] OIG, Vulnerabilities Remain Under Medicare’s 2-Midnight Hospital Policy, 13, OEI-02-15-00020 (Dec. 2016), https://oig.hhs.gov/oei/reports/oei-02-15-00020.pdf.
[4] 42 U.S.C. §1395cc(a)(1)(Y).
[5] 42 C.F.R. §405.926(u).
[6] The Center’s statement to the Ways and Means Committee is available at https://www.medicareadvocacy.org/wp-content/uploads/2019/07/Surprise%20Medical%20Bills%20Statement%20Center%20for%20Medicare%20Advocacy%20May%202019.pdf.

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