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On October 6, 2014, President Obama signed into law the “Improving Medicare Post-Acute Care Transformation Act of 2014” or IMPACT Act.  The bill resulted from a bipartisan, bicameral effort by the House Ways & Means and Senate Finance Committees to address various issues relating to care Medicare beneficiaries receive once they are discharged from the hospital.  The IMPACT Act focuses primarily on standardizing post-acute care (PAC) assessment data relating to quality, payment and hospital discharge planning.   The Act standardizes data collection and assessment over the next few years with the aim of gathering enough information to make further, more fundamental changes to how Medicare approaches and pays for PAC.   As noted in a Senate Finance Committee press release, the IMPACT Act “lays the groundwork for further reforms to the Medicare program” such as instituting bundled payments,  site-neutral payments and value-based purchasing.

Although the IMPACT Act does not change PAC payment, which would need to be accomplished through subsequent legislation, the Center has concerns about some of these payment proposals.  For example, as discussed during our last Alliance Call, see the Center’s recent Alert challenging one of the premises behind site-neutral payment – that the same care can be and is provided at different types of facilities.

As discussed further below, the IMPACT Act also improves oversight in certain post-acute care settings:

  • The Act provides funding for the electronic submission of nursing home staffing information; and
  • The Act also strengthens Medicare’s oversight of certain aspects of hospice care by mandating hospice surveys every three years.  


Skilled Nursing Facilities – The federal nursing home website, Nursing Home Compare, is about to undergo major changes that should significantly improve the accuracy of information about nursing homes that is provided to the public.  The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act of 2014), discussed above, supports one of the key changes – providing funding to implement a provision of the Affordable Care Act (ACA) that requires nursing home staffing data reported on Nursing Home Compare to be electronically-submitted and "based on payroll and other verifiable and auditable data."

Hospice – Ensuring hospice agencies’ compliance with beneficiary rights enumerated in the Medicare Conditions of Participation is the duty of State Survey Agencies.  Unfortunately, as noted in a recent report by the Office of Inspector General, State Agencies are not sufficiently monitoring hospice providers.  The recently passed IMPACT Act now mandates hospice surveys every three years. 

More frequent surveys will help ensure that hospice patients get enough care and the right kind of care. However all hospice patients should take an additional step to protect their rights: they should choose an attending physician. The Medicare Conditions of Participation afford hospice patients certain enumerated rights including the right to choose one's own attending physician.  A new rule published in the Federal Register on August 22, 2014 which took effect on October 1, 2014 bolsters this right by adding helpful language to the hospice election statement.  As of October 1, the hospice election statement will indicate that the identified attending physician has been chosen by the patient or the authorized representative. 

CMS Requests for Information (RFI) – CMS is currently soliciting feedback on several issues that might be of interest to advocates.  Comments to both of the following documents are due November 3, 2014.

  • Effect of Dual Eligibility on Part C and D Plan Quality Ratings – In this RFI, CMS “seeks analyses and research that demonstrate that dual status causes lower MA and Part D quality measure scores. Alternatively, we are also interested in research that demonstrates that high quality performance in MA or Part D plans can be achieved in plans serving dual eligible beneficiaries and how that performance level is obtained.”  The RFI is available at:  
  • Health Plan Innovation Initiatives – the Centers for Medicare and Medicaid Innovation (CMMI), a division of CMS, released an RFI seeking input on a variety of policy proposals including value based insurance design (VBID) in Medicare Advantage, care coordination by Medigaps or retiree supplemental plans, and integrating hospice benefits with curative care for Medicare Advantage plan enrollees. The RFI is available at:


The Center has received a series of Medicare Appeals Council decisions denying coverage of care at skilled nursing facilities after finding that due to ruling 1455-R, Medicare adjudicators could not change a hospitalization from outpatient to inpatient.  Pursuant to the ruling, “[an] appeals adjudicator’s scope of review is limited to the claim(s) that are before them on appeal, and appeals adjudicators may not order payment for items or services that have not yet been billed or have not yet received an initial determination.” 

In response to these decisions, the Center has updated our observation status self-help packet.  Rather than asking the administrative law judge to address whether the beneficiary should have been admitted as an inpatient, we simply ask her to find that the kind of care she received while hospitalized was an inpatient level of care.  Then, if while at the skilled nursing facility the beneficiary received reasonable and necessary daily skilled care, we ask the ALJ to grant coverage for the care because pursuant to the regulations Medicare coverage is available for care in a skilled nursing facility if the beneficiary was “hospitalized in a participating or qualified hospital…, for medically necessary inpatient…care, for at least three consecutive calendar days, not counting the date of discharge…” 42 C.F.R. §409.30.


Medicare’s Annual Coordinated Election Period (ACEP) for Medicare Advantage and Part D plans began on October 15th and runs through December 7th.   During the ACEP, often referred to as "open enrollment," Medicare beneficiaries who do not have a Part D plan can enroll in one, and those who do have Part D coverage can change plans.  Beneficiaries can also return to traditional Medicare from a Medicare Advantage (MA) plan, enroll in an MA plan, or change MA plans.  Enrollment requests made during the ACEP will have an effective date of January 1 of the following year.

As advocates are well aware, beneficiaries should review their plan options carefully each year to make sure they are getting the coverage they need.  The following provides brief summaries of recent surveys/reports regarding the 2015 landscape of Part C and D plans as well oversight of such plans:

Reminder: Starting in 2015 there will be a limited special enrollment period (SEP) for certain MA enrollees following certain provider network terminations.  See the Medicare Managed Care Manual, Ch. 2, Section 30.4.6 – reprinted below and available at the following link:

30.4.6 – SEP for Significant Change in Provider Network

An SEP exists for situations in which CMS determines that changes to an MA plan’s provider network that occur outside the course of routine contract initiation and renewal cycles are considered significant based on the affect or potential to affect, current plan enrollees.

CMS will establish an SEP, on a case by case basis, if it determines a network change to be significant. The SEP will be in effect once CMS makes its determination and enrollees have been notified. The SEP begins the month the individual is notified of the network change and continues for an additional two months. Enrollment in the new plan is effective the first day of the month after the plan receives the enrollment request.

The scope of the SEP will be determined by CMS, and it may include enrollees who have been affected, or who may be affected, by the network change. Individuals eligible for the SEP may disenroll from the MA plan and elect Original Medicare or another MA plan, including an MA-PD even if they did not have prescription drug coverage previously. CMS will provide specific instructions directly to the affected organization, including instructions on required beneficiary notifications and information to be provided to affected beneficiaries regarding other enrollment options, if applicable.


  • Problems with Medicare Appeals – As previously discussed during Alliance calls, the Center’s experience with dismal success rates in beneficiary appeals at the lower levels of review are quite staggering, and have been getting exponentially worse over the past few years.
    • On June 4, 2014, the Center filed a complaint in United States District Court in Connecticut against Kathleen Sebelius, Secretary of Health and Human Services (at that time), on behalf of plaintiffs who have been denied a meaningful review of their Medicare claims at the first two levels of appeal. Hull v. Sebelius, No. 14-801 (D.Conn.).  The case was brought as a class action on behalf of Connecticut Medicare beneficiaries seeking home health care coverage, and the four named plaintiffs represent the thousands of beneficiaries who cannot get a meaningful review of their cases.”. Instead, Medicare beneficiaries receive almost automatic denials of coverage, which is essentially “rubber stamped” at both the Redetermination and Reconsideration levels. The problem persists throughout the country.
  • ALJ Delay Issues – The “rubber stamp” denials at the lower levels of Medicare appeals have resulted in huge backlogs to receive an ALJ hearing – the only meaningful review of a Medicare appeal and chance for success. The statute and regulations require that an ALJ issue a decision within 90 days of the Request for Hearing. While the Chief ALJ has stated that individual beneficiary cases should not be delayed, still most of the Center’s cases are greatly exceeding statutory timelines for decisions.
    • On August 26, 2014, the Center filed a nationwide class action lawsuit in United States District Court in Connecticut: Lessler v. Burwell, No. 14-1230 (D.Conn.).. The five named plaintiffs, from Connecticut, New York and Ohio, have all waited longer than the statutory 90-day limit for a decision on their Medicare appeals. The current average wait time is over five times the congressionally mandated time limit.  The complaint is available here:
  • Jimmo v. Sebelius (Improvement Standard) No. 11-cv-17 (D.Vt. filed 1/18/11).  As reported during previous Alliance calls, the Settlement in Jimmo was approved on January 24, 2013 during a scheduled fairness hearing.  As previously discussed, CMS has issued revisions to its Medicare Benefit Policy Manual to ensure that Medicare coverage is available for skilled maintenance services in the home health, nursing home and outpatient settings.  CMS also implemented 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. Pursuant to the Settlement, counsel for the parties are meeting twice a year to discuss problems with implementation and possible solutions, and are in regular contact between meetings.
  • Bagnall v. Sebelius (Observation Status) No. 3:11-cv-01703 (D. Conn., filed 11/3/2011). In November 2011, the Center for Medicare Advocacy and the National Senior Citizens Law Center 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. 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 coverage of post-hospital nursing home care, people on observation status do not have 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.

As previously reported, unfortunately, 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.  .Both the AMA and the American Health Care Association filed amicus briefs in support of plaintiffs, and the American Hospital Association filed an amicus brief that was neutral as to the parties.  With the appeal fully briefed, oral argument has been scheduled for this Thursday, October 23.

  • There is bipartisan support in both the House and Senate to fix this problem. Representatives Joseph Courtney (D-CT) and Tom Latham (R-IA) have introduced the Improving Access to Medicare Coverage Act of 2013 (H.R.1179) to help Medicare beneficiaries who are hospitalized in observation status. This bill would require that time spent in observation be counted towards meeting the three-day prior inpatient stay that is necessary to qualify for Medicare coverage of SNF care. Senator Sherrod Brown (D-OH) has introduced a companion bill, S.569, cosponsored by Senator Susan Collins (R-ME).
  • For more information about observation status, including pending legislation   see:

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