July 2018 – Medicare Hot Topics

MEDICARE HOT TOPICS[1]

1. ORAL HEALTH UPDATE

On July 19, 2018 the Center issued the following press release:

July 19, 2018 – Washington, DC – The Center for Medicare Advocacy, along with a diverse group of partners, released a white paper, An Oral Health Benefit in Medicare Part B: It’s Time to Include Oral Health in Health Care. This white paper is an interprofessional, collaborative effort written and published by leaders in the consumer, healthcare and dental fields, including the American Dental Association, Center for Medicare Advocacy, the DentaQuest Foundation, Families USA, Justice in Aging, Oral Health America and the Santa Fe Group.

With an expected 72.1 million seniors living in the United States by 2030, An Oral Health Benefit in Medicare Part B: It’s Time to Include Oral Health in Health Care, examines the need for oral health care to be integrated with, and elevated to, the same importance as the rest of health care in Medicare. Says Center for Medicare Advocacy Senior Attorney Wey-Wey Kwok, “Medicare’s dental exclusion is misguided given the clear connection between oral health and overall health. The time has come to include an oral health benefit that covers preventive services, disease management, and necessary procedures for all Medicare beneficiaries.”

Medicare plays a key role in providing health and financial security for 59 million older people and younger people with disabilities. However, traditional Medicare does not include coverage for routine oral health care like checkups, cleanings and x-rays, or restorative procedures like fillings or bridges, tooth extractions and dentures. The Center for Medicare Advocacy is committed to working with our many dedicated partners to advance access to quality oral health care for Medicare beneficiaries by adding an oral health benefit into Part B, which will improve overall health and quality of life for millions of older adults and people with disabilities.

An Oral Health Benefit in Medicare Part B: It’s Time to Include Oral Health in Health Care looks at many aspects of adding an oral health benefit to Medicare, including medical necessity, costs and the need for legislative changes. Top findings include:

• 70 percent of all Medicare recipients lack or have limited dental insurance and fewer than half access dental care each year.
• Cost is the number one reason that older adults have not gone to the dentist in the past year.
• Integrating dental coverage in Medicare would close disparities in dental use and expense between the uninsured and insured and among older adults with few financial resources and limited oral health education.
• Surveys show that consumers widely support adding oral health coverage to Medicare and prioritize two categories of care: checkups and pain treatment.
• 71.2 percent of dentists agree that Medicare should include comprehensive dental benefits and a majority indicated they were willing to comply with typical Medicare practice requirements.
• The ADA recently commissioned a study that analyzed the cost structure for various dental benefit designs within Medicare. This study estimated that a comprehensive benefit without dollar value caps would cost the federal government between 31.4 billion dollars in 2016 dollars, $32.3 billion in 2018; the estimated base premium increase for a Part B benefit would be $14.50 per beneficiary per month. ADA input to this white paper does not constitute endorsement of inclusion of a dental benefit under Medicare at this time. The ADA is currently investigating a number of options to serve the dental care needs of a growing elder population.

An Oral Health Benefit in Medicare Part B: It’s Time to Include Oral Health in Health Care recommends the addition of a comprehensive oral health benefit to Medicare Part B as it covers outpatient services. Such a benefit would be amended to include dental services using the medically necessary and reasonable standard that applies to all Part B services. Advantages to the inclusion of Part B include:

• Ensures that everyone enrolled in Medicare will receive the oral health benefit.
• Provides the greatest number of beneficiaries access to a basic level of oral health care, encouraging equitable health solutions and provider participation.
• Simplifies a potentially confusing program and process for providers and beneficiaries.
• Uses established protections for both Medicare beneficiaries and providers, alleviating the need for a new system and bureaucracies.

To move an oral health benefit in Medicare Part B forward, Congress must pass legislation to remove the statutory exclusion in Section 1862(a)(12) of the Social Security Act. They must establish dental coverage in Part B, permit payment for preventive services prescribed in the dental benefit and define the dental services in the Medicare Statute.

“Research demonstrates that oral health disparities exist for many racial and ethnic groups, by socioeconomic status, gender, age and geographic location. This underscores the need to approach oral health disparities as a component of social justice,” says Center for Medicare Advocacy Policy Attorney Kata Kertesz.

The recommendations included in An Oral Health Benefit in Medicare Part B: It’s Time to Include Oral Health in Health Care stress the necessity of an oral health benefit for older adults. Read more about the medical necessity, costs, proposed structure and legislative changes needed at oralhealthamerica.org/medicaretoolkit.

2. UPDATES ON DURABLE MEDICAL EQUIPMENT

Durable Medical Equipment for Medicare Beneficiaries in Skilled Nursing Facilities

The general rule is that Medicare does not cover durable medical equipment (DME) for a beneficiary in a nursing facility.  The basis for the rule is that DME is intended for use in the “home” and an institution is not considered the beneficiary’s “home.”  42 U.S.C. §1395x(n).  However, there are exceptions to the general rule.

Medicare will cover DME in an institution when the beneficiary

• rented the DME for the month during which the beneficiary was admitted to a skilled nursing facility,
• received the DME in anticipation of discharge from the skilled nursing facility to home, or
• is in a Medicaid-only nursing facility that provides primarily “nonskilled care.”

CMS, Medicare Benefit Policy Manual, ch. 15, §110.5; Office of Inspector General, CMS Did Not Detect Some Inappropriate Claims for Durable Medical Equipment in Nursing Facilities, OEI-06-16-00380 (Jun. 2018).

CMS Releases Issue Brief on Access Challenges of DME for Duals

The Medicare-Medicaid Coordination Office’s Integrated Resource Center (ICRC) of the Center for Medicare & Medicaid Services recently released an issue brief addressing the challenges of access to durable medical equipment (DME) for dually eligible beneficiaries. The brief, Facilitating Access to Medicaid Durable Medical Equipment for Dually Eligible Beneficiaries in the Fee-for-Service System: Three State Approaches, cites the logistical problems created by the mismatch of Medicare and Medicaid processing rules as creating barriers in access to needed care that individuals enrolled in only one or the other of the programs do not have. ICRC researched examples of states that have implemented provisional prior authorization (PA) policies, supported by lists of DME that Medicare generally does not cover. Fourteen states – Alaska, California, Connecticut, Georgia, Idaho, Illinois, Indiana, Kansas, Minnesota, Nevada, New York, Ohio, Oregon, and Utah – all appear to authorize suppliers to bill Medicaid directly for DME items that Medicare generally does not cover. The brief examines DME policies in three states (Illinois, California and Connecticut) that have led to improved access.

• Illinois: Illinois enables providers to use an online information system called Medical Electronic Data Interchange (MEDI) that lets providers verify multiple elements of a beneficiary’s eligibility, including QMB status, and an online table for providers that specifies the services/items for which providers and suppliers can bill Medicaid directly because Medicare generally does not cover them under Part B. The table also includes other key information, such as Medicaid prior authorization requirements and the maximum quantity of DME items allowed.
• California: California providers are allowed to submit claims directly to Medi-Cal (California’s Medicaid program) when any of the following criteria apply: Medicare does not cover the item or service; the beneficiary’s Medicare benefits have been exhausted; or Medicare has denied the claim; or the recipient is not Medicare-eligible.
• Connecticut: Connecticut requires that the state consider preauthorization of a DME item before the state receives a formal denial from Medicare. The state cannot deny dually eligible beneficiaries access to prior authorization for new or rental DME because Medicare has not yet made a coverage determination.

The Center for Medicare Advocacy has heard from state advocates that since Connecticut has allowed prior authorization in Medicaid for DME, dually eligible beneficiaries in the state have had access to DME without the delays seen in other states. The Center has advocated for this model to be implemented in other states.

Federal Update

The brief cites a Medicare prior authorization process, implemented July 2017, which is in effect nationwide for two types of power wheelchairs. The aim is to make the authorization process easier for dually eligible beneficiaries and power wheelchair providers by enabling them to get an earlier Medicare decision on those DME items. Beginning September 1, 2018, thirty-one additional power mobility device codes will be subject to required prior authorization.

The Center for Medicare Advocacy has promoted a prior authorization system in Medicaid (as is the case in Connecticut) and will be monitoring the impact on access to DME of adding additional power mobility device codes to Medicare prior authorization. The Center urges advocates to contact us at DMEPOS@medicareadvocacy.org to update us about DME access for dually eligible beneficiaries.

• The ICRC Issue Brief is available at: http://www.integratedcareresourcecenter.com/PDFs/ICRC_Access_to_DME_in_FFS_06-2018.pdf
• For more information on the Center’s work on DME access for duals, please visit: https://www.medicareadvocacy.org/cms-bulletin-moves-to-improve-access-to-durable-medical-equipment-for-dually-eligible-beneficiaries/; and https://www.medicareadvocacy.org/cma-organizes-sign-on-letter-concerning-cms-request-for-information-regarding-dually-eligible-beneficiaries-access-to-dme/

Medicare Prior Authorization Requirement for Power Wheelchairs Expanding Nationwide Effective September 1, 2018

Thirty-one new items of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) will join two existing items of DMEPOS on the Center for Medicare and Medicaid Services (CMS) Master List of Items Frequently Subject to Unnecessary Utilization, requiring prior authorization as a condition of payment. All these 33 DMEPOS items are types of power wheelchairs.

In a June 5, 2018, Federal Register announcement, CMS stated the goal of prior authorization is to reduce fraud, waste, and abuse, while protecting access to care.[2] In previous Federal Register postings, however, CMS stated that 92% of the DMEPOS improper payment rate is attributed to “insufficient documentation”[3] rather than fraud, waste, and abuse. Insufficient documentation is often a simple mistake in the process of documenting the need for the equipment – a doctor leaves off a date, or the therapist does not complete a field. These are clerical errors, not fraud.

For CMS to state that simple mistakes in paperwork result in “unnecessary utilization” of wheelchairs by individuals who legitimately require them for access to mobility is unconscionable. Characterization of the “Master List” as “Items Frequently Subject to Unnecessary Utilization” portends that beneficiaries should engage in proactive measures to ward off prior denial, rather than to assume prior authorization will be approved.

Beneficiaries should be aware of the pros and cons of prior authorization and be fully prepared in order to avoid prior denials.

Possible Benefits of Prior Authorization:    

• Beneficiaries may have greater confidence of coverage before the item is ordered.
• Questionable billing practices may be prevented.
• There are specified review timeframes (ten business days for initial review, twenty business days for resubmissions).
• The system may be made more efficient for all by encouraging careful and correct legitimate requests for coverage.

Possible Problems with Prior Authorization:

• Beneficiaries may see delays in access, and/or unfair denials of access, to services and equipment.
• The time to review may be doubled for re-review, even for a simple clerical error.
• While the prior authorization process allows unlimited prior authorization submissions, for non-affirmative prior authorization decisions, if a supplier submits a claim for payment determination to Medicare for DMEPOS, and that claim is denied, only then are beneficiary appeal rights available.
• Beneficiaries may be dependent upon providers and suppliers to ensure the paperwork is correct and error-free.

How to Minimize/Avoid Denials:

• Understand which items will be subject to prior authorization, effective September 1, 2018. The list is located at https://federalregister.gov/d/2018-11953.[4]
• Ensure sufficient documentation. Evidence must include information that the item complies with all applicable Medicare coverage, coding, and payment rules. The paperwork must be error-free, legible, and complete. Whenever possible, have the prior authorization request reviewed by multiple people before submitting it.
• Monitor the maximum prior authorization timeframes established by the rule.[5] The timeframes are ten business days for initial review, twenty business days for re-submissions. There are unlimited re-submissions, but, unfortunately, no appeal rights.
• Know that there is a process for an expedited request for prior authorization. Documentation must be submitted with the request that indicates how the life or health of the beneficiary will be seriously jeopardized without an expedited review.

If a beneficiary encounters difficulties with the prior authorization process, please inform the Center for Medicare Advocacy. Please email your stories or comments to DMEPOS@MedicareAdvocacy.org.

3.  HOME HEALTH UPDATE

NEW! Home health coverage infographic:

https://www.medicareadvocacy.org/wp-content/uploads/2018/04/Home-Healthcare-Infographic-r4-18-0404.pdf

Medicare Home Health Rules Proposed by CMS to “Improve Access to Solutions” Will Further Reduce Patient Access to Care

The announcement on July 2, 2018, that CMS seeks to “modernize” Medicare home health care is filled with patient-oriented rhetoric, but will actually further gut the Medicare home health benefit – which is already being implemented in a way that doesn’t work for many patients who are most in need.

New payment policies, such as those in the proposed rule, will continue to make it impossible to effectively implement Medicare coverage laws for millions of beneficiaries who qualify for care under the law. Medicare beneficiaries who meet home health coverage criteria will be forced to go without necessary care or enter institutions because home health agencies consider Medicare payments inadequate to cover their care.

Under the current payment system, for example, Medicare home health aide visits to provide patients with covered personal care services have declined from 48% to less than 10% over the past two decades despite no change in home health aide coverage laws. Changes in payment policies have driven the decline. The new proposed rule will further erode the lawful Medicare benefit and decrease delivery of home health aide services.

In the coming weeks, the Center for Medicare Advocacy will comment on these proposed rules. We urge others to participate by sharing or signing on to these comments. The crisis in access to home care is growing. This proposed rule would only exacerbate that trend and must be stopped. CMS must instead create a payment system that allows equal access to legal Medicare coverage, not a payment system that further illegally limits access to care and destroys lives.

Home Health Pre-Claim Review Demonstration Model, Take Two

In April 2017, the Centers for Medicare and Medicaid Services (CMS) abandoned a multi-state Medicare Pre-Claim Review Demonstration Model that had so many flaws it never made it out of the initial implementation state, Illinois. The latest proposed model promises to improve on the past model and boasts of greater flexibility and choice for providers in demonstration states (Illinois, Ohio, North Carolina, Florida, and Texas). Instead of having to follow the strict pre-claim review procedures of the earlier model, or face a 25% payment reduction for home health services, providers will be able to choose from either 100% pre-claim review or 100% post-payment review, or face a 25% payment reduction. CMS states that these review processes will achieve the following:

• Help ensure that payments for home health services are appropriate;
• Further develop improved procedures for the identification, investigation, and prosecution of Medicare fraud occurring among home health agencies;
• Protect the trust fund; and
• Reduce appeals.

For over half a century, the public has believed that CMS (and its’ administrative predecessors) have strived for appropriate payments in the Medicare program. However, before purposeful progress can be achieved to address fraud in the Medicare program, CMS must first ensure that Medicare contractors know Medicare law. The Center for Medicare Advocacy recently participated as legal experts in reviewing an OIG audit performed by a Medicare contractor. The contractors’ medical reviewers misunderstanding of Medicare law was shocking. Even more stunning was the fabricated standards applied to deny legally-defensible cases. Equally disturbing is that these same contractors are charged with educating providers about Medicare coverage. The dissemination of misinformation by contractors is unconscionable and must be corrected. That is how the trust fund will be best protected, by ensuring beneficiaries are properly approved for legally covered services. Finally, the goal of reducing appeals will only be appropriate when inappropriate denials are reduced.

The Center for Medicare Advocacy has no information offering assurance that this proposed demonstration program will be an improvement over the earlier failed model. Adding the alternative option of 100% post-payment review does not address the concerns that brought down the 2016 model in Illinois – onerous, rigid requirements that had to be met in unreasonable sequential order, derailed as soon as a doctor could not be reached for signature or a file could not be uploaded to a Medicare contractor properly. Under the failed demonstration, access to home health services in Illinois was reduced for beneficiaries by a double-digit percentage. Was that fraud reduction or the result of unreasonable administrative barriers for providers, who were then unable to continue the fight to serve Medicare beneficiaries? And the Medicare beneficiaries who lose access in those battles are the most vulnerable patients, with long-term chronic conditions.

CMS’ announcement of the new “Review Choice” Demonstration mistakenly stated that they had “posted a 60-day Federal Register Notice to allow providers the opportunity to review and comment” on the revised demonstration. (Emphasis added). Certainly CMS meant to include beneficiaries and their advocates among those interested parties and members of the public who are legally entitled to comment and whose information CMS should consider when they review comments.

Public comments on the proposed action must be received by July 30, 2018.

Home Health Highlight:

People Can Leave Home and Still Receive Medicare-Covered Home Care

The Center for Medicare Advocacy hears from Medicare beneficiaries throughout the country who are living with serious illnesses and injuries without the home care they need – and that should be covered by Medicare. There are many reasons for these access problems. Patients are told they don’t meet the qualifying criteria because they aren’t “homebound,” they don’t need skilled nursing or therapy, or they “only need maintenance care,” since they aren’t improving. Increasingly, they are told home health aides only provide bathing, for only a few days a week. None of this is accurate. All of it is harmful.

Recently people have reported being denied access to Medicare home health care due to restrictive interpretations of the homebound standard, which must be met in order to qualify for coverage. To meet this standard,

• The individual must require assistance of another person or supportive device to leave home; or
• It is contraindicated for him/her to leave due to his or her medical, cognitive, or psychological condition; and
• There is a normal inability to leave home; and
• It requires a “considerable and taxing effort” to leave home.

Unfortunately, too many Medicare providers and contractors misunderstand or distort this requirement.  For example, we received the following question from a woman who has ALS:

I cannot speak [due to my ALS] but I have a question. I was discharged a year ago from my home health agency because after the long winter of being home bound, I went to see a movie with my adult son. [The home health agency] said “You must admit, your case of ongoing care with our agency is unusual!” I didn’t fight their treatment. My question is this: living in Wisconsin with our harsh winters, making going out considerably more difficult, could I get the help I need for the winter months? My doctor has never hesitated to give me an order for needing skilled care and a plan of care. …

This kind of experience is untenable. The individual is clearly homebound, in fact, without help from another person, she would be bedbound.  She is not required to be a prisoner in her own home in order to meet the Medicare homebound requirement.

As the Centers for Medicare & Medicaid Services’ own policy manual states,

“… occasional absences from the home for nonmedical purposes, e.g., an occasional trip to the barber, a walk around the block or a drive, attendance at a family reunion, funeral, graduation, or other infrequent or unique event would not necessitate a finding that the patient is not homebound if the absences are undertaken on an infrequent basis or are of relatively short duration and do not indicate that the patient has the capacity to obtain the health care provided outside rather than in the home.”[6]

The intent of the homebound standard is to provide Medicare-covered care at home for people who don’t ordinarily have the capacity leave home to obtain the health care they need. We urge advocates, providers, and CMS to help ensure the standard is not restrictively interpreted to bar access to reasonable and necessary care for people who qualify under the law.

4.  EXECUTIVE ORDER RE: ADMINISTRATIVE LAW JUDGES (ALJs)

On July 12, 2018, the Center published the following Weekly Alert:

Administrative Law Judges and Objective Medicare Appeals Jeopardized By Recent Executive Order

On July 10, 2018, the President signed an Executive Order undermining the impartial hiring of Administrative law Judges (ALJs). The order states that “conditions of good administration make necessary an exception to the competitive hiring rules and examinations for the position of ALJ.”  What this really means is that ALJs will now be hired directly by each individual agency, including CMS for Medicare appeals. This is a dramatic change from the current centralized system that selects applicants deemed qualified through a competitive examination and selection procedures administered by the Office of Personnel Management.

Advocates and legislators are concerned.  Rep. John Larson of Connecticut says that Americans “deserve an impartial hearing by a highly-qualified, independent judge. But under the Administration’s new policy, they will face a judge beholden to ideology and politics rather than one selected through a competitive process designed to ensure qualification and neutrality.”

By statute, Medicare ALJs must be independent of CMS. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), Public Law 108-173, §931 transferred the function for Medicare ALJ appeals from the Social Security Administration to the Department of Health and Human Services. The law specifically states that ALJs are to be “organizationally and functionally independent of CMS.” (5 USC §554(d); 70 Fed Reg 11420-499 (March 8, 2005). The Executive Order conflicts with this statutory requirement.

The Executive Order’s tie of ALJ appointments to CMS does not bode well for Medicare beneficiaries who seek a fair, independent review of Medicare coverage denials. The Center for Medicare Advocacy’s experience with thousands of Medicare appeals demonstrates that the lower levels of appeal are all but rubber stamps of Medicare denials. The ALJ level of appeal is the only real chance for beneficiaries to obtain an independent review. The fairness and objectivity of the appeals process will be gravely damaged by authorizing CMS to appoint its own ALJs, replacing current objective examination and competitive processes.

5. AFFORDABLE CARE ACT (ACA) SABOTAGE UPDATE

On July 19, 2018, the Center published the following Weekly Alert:

Now Can We Call it Sabotage?

In a previous CMA Alert we highlighted a statement reportedly made by CMS Administrator Seema Verma that she took “exception to those out there who have made claims that we have tried to sabotage the health care of the American people, particularly when it comes to the health-care exchanges…” We listed actions taken prior to that statement that we believe undermined the Affordable Care Act (ACA) and the stability of the Exchanges.

Here are a few new examples that must, unfortunately, be added to our previous Sabotage list:

• In a hearing on Capitol Hill, Health and Human Services (HHS) Secretary Azar defended the Administration’s proposal on junk plans. Azar is quoted as saying “…expanding short-term health plans will not harm the insurance marketplace.” He also stated that “People are not going to be leaving subsidized insurance,” even as repeated studies show the opposite to be true.
• The U.S. Department of Justice (DOJ) sided with the states that are suing the federal government over the constitutionality of the ACA and will not be defending it against the lawsuit. DOJ actually argued against provisions of the ACA that guarantee coverage to people who are older, sicker, or have pre-existing conditions.
• The Department of Labor issued the final rule for Association Health Plans. Expanding these plans will make it easier for certain small employers to offer plans don’t have ACA coverage protections. These plans could attract younger, healthier consumers away from the ACA Marketplace, raise costs for consumers who are older or sicker, and weaken essential health benefits for people who need coverage the most.
• CMS released reports on the performance of the exchanges and the individual health insurance market. The reports used unhelpful statements such as “Reports show individual market erosion and increasing taxpayer liability” and “…Obamacare was failing its consumers.”
• The Administration is slashing even more funding for organizations called “navigators” that assist people who need health insurance. The Washington Post reported that for the upcoming enrollment period, funding for navigators will be cut from $36.8 million to $10 million. Just as troubling, organizations that apply for navigator grants will be “expected” to promote inadequate insurance such as Association Health Plans and short-term plans.
• The Sunlight Foundation’s Web Integrity Project found that HHS removed 14 pages of information about the Affordable Care Act from its Medicaid website. According to the Sunlight Foundation, the removed pages “provided information such as eligibility requirements under Medicaid and the ACA…” The Foundation also states that “Other Americans who are newly eligible for Medicaid through Medicaid expansion under the ACA could have used this information to understand how the ACA affects their Medicaid benefits and services they can receive.”
• The Administration announced that it was stopping payments to insurers under the ACA’s risk adjustment program. The risk adjustment program supports insurers that provide coverage to large numbers of sicker enrollees who have higher costs. America’s Health Insurance Plans, an insurance industry group, stated that CMS’ decision “will create more market uncertainty and increase premiums for many health plans, putting a heavier burden on small businesses and consumers, and reducing coverage options.

Regrettably, this looks like more sabotage to us.

6.    LITIGATION UPDATE

• Alexander v. Azar (formerly Bagnall v. Sebelius, Barrows v. Burwell), No. 3:11-cv-1703 (D. Conn.) (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 cross motions for summary judgment 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 have 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). The parties filed an updated plan for further discovery.

  Plaintiffs filed a renewed motion for class certification on March 3, 2017. 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.

  Update: The second round of discovery closed on June 15, 2018, with both parties having conducted numerous depositions and exchanging documents. A status conference with the court was held on June 28, 2018, during which the government stated its intention to file for partial summary judgment and also for decertification of the class. Plaintiffs want to move to trial as they disagree with the grounds for the government’s motions and think it is unlikely they will resolve this aged case. The court is not allowing the government to file for summary judgment again on the protected property interest issue, and strongly discouraged additional extensive motion practice on the other issues raised by the government, particularly on the class, though it has stated that summary judgment on the Mathews v. Eldridge factors (which determine what process is due) may assist it in understanding the criteria plaintiffs contend will govern the proposed hearings. The government will file its motion or motions by July 30, 2018.  The court also set trial to start the week of February 18, 2019 and stated it could not guarantee that it would decide the government’s motion before trial.

  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: https://www.medicareadvocacy.org/submit-your-observation-status-story/

  • For more information about this case, see: https://www.medicareadvocacy.org/court-certifies-nationwide-class-in-observation-status-case/
  • For more information about observation status, including pending legislation   see: https://www.medicareadvocacy.org/medicare-info/observation-status/.

• Dobson v. Azar, No. 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.Update: The parties consented to proceed before a magistrate judge on June 13, 2018. The government is due to file its answer to the complaint and the administrative record by August 21, 2018, and the court has set a schedule for summary judgment briefing, to be completed by late November 2018.

• 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: https://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

  For information about and a copy of the Exley settlement, see:  https://www.medicareadvocacy.org/exley-v-burwell-settlement-in-medicare-appeals-delay-case-granted-final-approval/

• Ryan v. Hargan, 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.

  Update: Class counsel will alert advocates when CMS has published the application process on its website, which we expect will be around August 1, 2018.

  For more information, including a copy of the complaint, see: https://www.medicareadvocacy.org/federal-court-class-action-challenges-medicares-practice-of-repeatedly-denying-home-health-coverage-for-homebound-beneficiaries/.