Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

September 2015 – Proposed Rules for Nursing Facilities are Inadequate & Other Issues

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ADMINISTRATIVE UPDATE

1. Proposed Requirements of Participation for Nursing Facilities

On July 16, 2015, the Centers for Medicare & Medicaid Services (CMS) published proposed rules to revise the nursing home Requirements of Participation (RoPs) – the federal rules that govern the standards of care that facilities must meet in order to participate in the Medicare or Medicaid programs, or both.

The Center’s initial review raised a number of serious concerns about the proposed rules. The most serious concern was, and remains, the failure of the proposed rules to mandate specific nurse staffing standards.  Many studies over many years have documented the understaffing of nursing homes nationwide.  Without sufficient numbers of well-trained, well-supervised, and well-compensated registered nurses and certified nurse assistants (CNAs), facilities are unable to provide residents with the care they need.

Other key concerns in the proposed rules are:

  • The downgrading of Quality of Life requirements (by scattering them throughout the proposed rules among other regulatory areas and by taking only activities from the current Quality of Life RoP and adding it to the new combined Quality of Care and Quality of Life RoP);
  • The revision of  the Quality of Care RoP to eliminate (in some instances) a key statutory expectation that a resident not decline unless there is a medical reason specific to that individual, and to move certain specific requirements, such as drugs, to other RoPs, making it impossible to find all standards for care in a single location;
  • The long delays and confusion that will inevitably follow from reorganizing the RoPs, due to the need to revise the survey protocol and train surveyors in its use.

There are positive aspects to the proposed rules, including new requirements that:

  • A baseline care plan be completed within 48 hours of a resident’s admission;
  • The interdisciplinary care planning team include a CNA responsible for the care of the resident and a member of both the social services and food and nutrition departments.

CMS Reopens Public Comment Period

At the request of many organizations, including the Center for Medicare Advocacy, CMS re-opened the 60-day public comment period.  The September 15 notice re-opening the comment period gives commenters an additional 30 days to submit comments. Comments must now be submitted by October 14, 2015.

The Center has a preliminary draft available at https://www.medicareadvocacy.org/draft-comments-medicare-and-medicaid-programs-reform-of-requirements-for-long-term-care-facilities/. We will continue to revise our comments and will submit them to CMS by the October 14 deadline.  Those interested in submitting their own comments should feel free to use these draft comments as a model.

2. Update on 2016 Part B Premiums and Deductibles

On July 22, 2015, the Medicare and Social Security Trustees issued the 2015 Annual Report of the Boards of Trustees of the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund.  The Trustees report projects a significant increase in Part B premiums for some, and a significant increase in the deductible for all.  

Premiums

In part due to increased Part B expenditures, the monthly Part B premium (currently $104.90) could increase to $159.30 in 2016 (a $54, or 52% increase) for approximately 30% of beneficiaries.

  • The 30% of affected individuals are:
    • those who will be new Medicare enrollees in 2016;
    • those with income-related premiums (incomes higher than $85,000 for individuals);
    • those beneficiaries who pay their premiums directly instead of having it deducted from their Social Security checks (or those who don’t collect Social Security, such as certain government employees); and
    • individuals dually eligible for Medicare and Medicaid (these costs will be paid for by state Medicaid agencies rather than individuals).

Because Social Security does not expect there to be a cost of living adjustment (COLA) to Social Security payments next year, the remaining 70% of beneficiaries will be protected by a “hold harmless” provision of the Medicare statute, meaning their premiums will stay at the same rate next year ($104.90).  Because of this provision, higher increased costs will be borne by the 30% of individuals described above, rather than a lower amount spread across the entire Medicare population.

Note that the Trustees Report also projects a drop in the premium amount for 2017, back down to $120.70 per month.   (This is roughly what the premium increase would be for everyone in 2016 if the hold harmless provision did not apply.)

Deductible

Similarly, because the Part B deductible is tied to the premium by statutory formula, the Trustees Report estimates that the deductible will increase from $147 in 2015 to $223 in 2016 (an increase of $76).  There is no “hold harmless” provision that applies to the deductible, so it will apply to all Medicare beneficiaries.  Many Medicare beneficiaries, though, have supplemental or other coverage that includes coverage of the deductible.  However, state Medicaid agencies, employer plans, and certain Medigap plan carriers will pay these increased costs which could, among other things, affect premiums.  Those without any supplemental coverage that covers the Part B deductible will pay the full amount. 

Similar to projections relating to premiums, the Trustees Report projects that the deductible will drop in 2017 down to $169.

On October 15th, the Bureau of Labor Statistics will release the final data necessary to calculate the COLA, and SSA will then declare whether there will be a COLA in 2016.  Sometime in the next few weeks, CMS will also announce the final 2016 Part B premiums and deductible. At this point, things may change; stay tuned ….

3. Access to Care for Low-Income Medicare Beneficiaries

A recent Centers for Medicare & Medicaid Services (CMS) report, Access to Care Issues Among Qualified Medicare Beneficiaries (QMB), revealed several access to care problems for low-income Medicare beneficiaries enrolled in the QMB program.

The report analyzed two studies focused on access to care for low-income beneficiaries. The first study utilized qualitative interviews with beneficiaries to examine the illegal provider practice of “balance billing” (providers’ billing and collecting cost-sharing from QMB enrollees for Medicare-covered services); the second study, the quantitative study, investigated whether there is an association between state reimbursement policies for cost-sharing and health service utilization in this population.

Qualitative Study: Balance Billing

People with QMB are excused, by law, from paying Medicare cost-sharing. Providers are prohibited from charging them. All cost-sharing (premiums, deductibles, co-insurance and copayments) related to Parts A and B is excused, meaning that the individual has no liability.  The state has responsibility for these payments for QMBs regardless of whether the particular service is also a Medicaid-covered service. 

Despite this prohibition, the CMS study found that providers illegally balance-billed participants for Medicare cost-sharing on a regular basis. Due to a lack of information, confusion regarding the system, or concern over outstanding bills, most QMB enrollees participating in the study paid these bills. Additionally, participants reported that unpaid bills were submitted to collection agencies. Another finding in the study was that participants experienced challenges with the appeals process. The study also found that beneficiaries were dissatisfied with service coverage, particularly for Durable Medical Equipment (DME).

Quantitative Study: State Cost-Sharing Policies

A provision in the Balanced Budget Act of 1997 (BBA), gave states the option to reimburse Medicare cost-sharing to providers for services provided to dually eligible beneficiaries at their lower Medicaid rate, rather than the full Medicare rate. Federal law also authorizes states to pay at the Medicare rate even if that rate is higher than what the state would pay for a non-dual eligible on Medicaid. Under a BBA provision sometimes referred to as the “lesser-of” policy, if the Medicare share (80 percent of the Medicare allowable amount for most Part B services) is more than the state's Medicaid rate for the same service, the state need pay nothing. Since the enactment of the BBA, courts have held, even in cases that predated the BBA, that states may reimburse at the lower of the two reimbursement rates. Thus, dually eligible beneficiaries are treated as Medicaid rather than Medicare beneficiaries, with respect to provider reimbursement. Studies have found that these payment reductions have led to reduced utilization and provider access problems.

The CMS report cited to previous research that found a direct association between the percent of cost-sharing paid by Medicaid and access to care, with reduced access to care in states that reimbursed providers at the lower rate. “The extent of the reductions in Medicaid cost-sharing payments proportionately lowered the odds that a dually eligible beneficiary would have an outpatient visit.”

In sum, the CMS report shows an alarming trend that low-income beneficiaries enrolled in the QMB program are frequently being illegally balance-billed, and that though they are not liable for the charges, many of the bills were sent on to collections if unpaid, and most beneficiaries actually paid. In addition, the CMS report found that QMB enrollees were less likely to use office visits and hospital outpatient services compared to Medicare-only enrollees in states that employed the “lesser-of” policy for reimbursement, thereby limiting access to essential routine and preventive care for beneficiaries. The report provides troubling information regarding access to care for low-income beneficiaries that underscores the need for continued advocacy efforts for this vulnerable population.

For more information, see the Center’s Weekly Alert “CMS Report Finds Access to Care Problems for Low-Income Medicare Beneficiaries” (August 27, 2015), at: https://www.medicareadvocacy.org/cms-report-finds-access-to-care-problems-for-low-income-medicare-beneficiaries/.

4. Proposed Policy Change on Lower Limb Prostheses Coverage

In July 2015, Medicare Contractors issued a Proposed Draft Local Coverage Determination (LCD) on Lower Limb Prostheses (DL33787) (see http://www.medicarenhic.com/viewdoc.aspx?id=3109).  

The Center recently called for the elimination of this proposed LCD that would drastically reduce Medicare coverage of lower limb prostheses.  The proposed LCD endorses harmful, pain-producing, and independence-robbing strategies for those who need lower limb prostheses.  In comments submitted to the Durable Medical Equipment Medicare Administrative Contractors (DME MAC), the Center argued the proposed LCD arbitrarily eliminates coverage, creates higher risk of complications for prostheses wearers, adds discriminatory and offensively ignorant prerequisites, and inexplicably removes the expertise of licensed and certified prosthetists from consideration.

In addition to the proposed LCD unfairly and illegally restricting Medicare coverage, the Center believes it violates individuals’ civil rights and tenets of the Affordable Care Act.  Strong public outcry against the proposed LCD has included a public protest at the Department of Health and Human Services (HHS) and a successful “We the People” petition that garnered over 100,000 signatures (in part thanks to responders to the Center’s Action Alert on the issue).  Reaching 100,000 signatures has triggered the White House to say they will review and respond to the issue.  Other action has included direct pleas from advocates, veterans, and elected officials to HHS Secretary Burwell to rescind the proposed LCD.  The deadline for comments to the DME MAC was August 31, 2015.

Read the Center’s full comments at: https://www.medicareadvocacy.org/comments-regarding-proposed-draft-lcd-on-lower-limb-prostheses-dl33787/.  

LITIGATION UPDATE

  • 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 Justice in Aging 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 Part A 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, 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, a three-judge panel of 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.

Update: The parties are now in discovery on the question of whether plaintiffs have a “protected property interest” in Part A coverage of their hospital stays, such that they would have due process rights. Plaintiffs have received voluminous documentation from the government. The law firm of Wilson Sonsini Goodrich & Rosati, which has helped the Center in previous litigation, is providing pro bono assistance with the discovery process.

  • Lessler v. Burwell, No. 14-1230 (D.Conn.) (ALJ Delay Issues) –The Medicare statute and regulations require that an administrative law judge (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: https://www.medicareadvocacy.org/wp-content/uploads/2014/08/00083998.pdf.

On January 29, 2015, defendant’s motion to dismiss was denied.

Update:  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 have also conducted discovery. Cross motions for summary judgment are due to be filed this fall.

  • 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.
     

  • Hull v. Sebelius, No. 14-801 (D.Conn.) (Lower level Medicare appeals) 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. 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.
    ​

    • On December 8, 2014, the court granted the government’s motion to dismiss on the grounds that the named plaintiffs, who are dual-eligibles, lack standing because they received coverage from Medicaid.  Plaintiffs filed a motion for reconsideration.

Update: On July 6, 2015, the court reconsidered its order but adhered to its decision granting the government’s motion to dismiss because the plaintiffs lack of standing.  In its reconsideration, the court noted that the Supreme Court has granted certiorari in a case that may shed light on the standing issue at dispute. See Spokeo, Inc. v. Robins, 135 S. Ct. 1892 (2015) (granting cert on the following question presented: Whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute.).  Plaintiffs appealed the case to the Second Circuit on September 17, 2015, and they plan to ask the court to hold the appeal in abeyance pending the outcome of Spokeo at the Supreme Court.

​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. 

Update: On July 27, 2015, the court denied the government’s motion to dismiss, finding four separate ground on which the dually eligible plaintiffs have standing. (Compare Hull, above, in which the court rejected similar standing arguments.) The court also found that it had subject matter jurisdiction and that plaintiffs had stated a claim on which relief could be granted. The plaintiffs’ motion for certification of a regional class is fully briefed and set for oral argument in Rutland, Vermont on September 21, 2015.

  • Lodge v. Burwell (Extreme Dental) 3:15-CV-390 (D. Conn., filed 3/17/2015).

This appeal filed in federal court, District of Connecticut, presents an opportunity for the court to review whether surgical treatment to a Medicare beneficiary’s teeth damaged by radiation therapy to the head and neck was 1) properly characterized by an Administrative Law Judge as a covered physician service medically reasonable and necessary as a part of an overall plan of care for cancer or 2) improperly characterized by the government contractor as excluded dental services.  These competing interpretations depend upon how the specific treatment is characterized.

Update: The plaintiff amended the Complaint on June 30, 2015 to add a claim under the Administrative Procedure Act (APA), stating that in 1974 the agency removed the word “routine” from the description of excluded dental services without following proper notice-and-comment procedure.   On August 13, 2015, the government answered the Complaint and attempted to file a motion to dismiss the APA claim as time-barred. The court quickly denied the government’s motion without prejudice to renew because a procedural pre-filing rule had not been followed.  The government is expected to refile its motion to dismiss after a conference is held with the court.

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