Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

April, 2014 – Ongoing Medicare Appeal Concerns & Other Issues

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1.  LITIGATION UPDATES

  • 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.
  • 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.  Their opening brief was filed on February 13, 2014.  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.  The Secretary’s brief is due on May 15, 2014.
     

    • 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: https://www.medicareadvocacy.org/medicare-info/observation-status/

2.      RE-REVIEW OF PREVIOUSLY DENIED CLAIMS PURSUANT TO THE JIMMO SETTLEMENT

As discussed during the last Alliance call, in addition to revising Medicare manual provisions to now allow Medicare coverage for skilled maintenance care, the Settlement Agreement in Jimmo v. Sebelius provides that Medicare beneficiaries who were previously denied Medicare coverage may have claims re-reviewed under the revised manual provisions.  The process is not automatic: people who wish to take advantage of the re-review process must fill out and submit a form, known as a Request for Re-Review, which is now available on the Center for Medicare Advocacy's website and the CMS website. 

  • Medicare Claims Eligible for Re-review

A Medicare beneficiary may be eligible for re-review if she/he:

  1. Has received skilled nursing or therapy services in a skilled nursing facility, home health setting, or outpatient therapy setting, and
  2. Has received a partial or full denial of Medicare coverage for those services based on the lack of improvement potential, and
  3. The denial became final and non-appealable on or after January 18, 2011.

Thus, the claims that are eligible for re-review are coverage denials that were alive on or after January 18, 2011 (even though the services for which the claim was made could have taken place prior to that date) through January 23, 2014.

  • Deadlines for Filing Request for Re-Review Form

There are two different deadlines for filing the form and obtaining re-review. 

  1. If the claim became "final and non-appealable" from January 18, 2011 through January 24, 2013, the deadline for filing is July 23, 2014. 
  2. If it became "final and non-appealable" from January 25, 2013 through January 23, 2014, the deadline is January 23, 2015 (six months later than the first group's deadline).  The best practice, of course, is to file the re-review form as soon as possible so that there is no doubt about timeliness.

For further information on the Jimmo re-review process:

  1. Center's website, www.medicareadvocacy.org
  2. Center’s Alert “Jimmo Class Members Can Now Have Their Coverage Denials Re-Reviewed”  (January 30, 2014)

3.  DUE PROCESS AND MEDICARE APPEALS

  • Denial Rate of Beneficiary Appeals at Lower Levels of Review

As discussed on previous Alliance calls, the Center’s experience with diminishing success rates concerning beneficiary appeals – better viewed as denial rates – at the lower levels of review are quite staggering, and have been getting progressively worse. (Here, the lower levels of review refer to the first two steps in the Medicare administrative appeals process prior to the Administrative Law Judge (ALJ) hearing stage.)

  • As noted in our April 2013 Alliance Call Issue Brief, the Center has been handling thousands of home health and SNF cases for over 20 years.  In the early to mid-90s, about 30 to 40% of all appeals at the redetermination and/or reconsideration levels of CMA-represented appeals were favorable to the beneficiaries.  In the late 90s, that percentage began to drop significantly, so that only 15 to 20% were granted.  The number of granted appeals continued to fall throughout the early part of the last decade, while the number of denials increased.  In the four calendar years from 2010 through 2013, there were 14,372 home health care redetermination and reconsideration decisions — with only 346 partial or totally favorable, a “success rate” of 2.4%.  In one year, 2011, the rate was 0.61%, and the trend continues into 2014, with a denial rate of 98.8%.  CMS has confirmed that these statistics are consistent with the national rates.
     
  • These “success rates” are so ludicrously low as to be review at all.  The irony is that the review process developed in the last decade was supposed to make the lowest levels of review a more efficient and effective part of the process, so that beneficiaries would not be forced to go to the ALJ level.  Now, with success virtually impossible at the lowest levels of review, beneficiaries must stay on to the ALJ level to have any chance of success, but very few are able to go that distance.  As a practical matter, the lowest levels of review now act as a barrier to obtaining any effective review at all.
     
  • ALJ Scheduling Backlog

Problems relating to the success rate of beneficiary-initiated appeals have been exacerbated by increased scheduling delays for administrative law judge (ALJ) hearings, where beneficiaries typically have a greater chance of success.  Note that 42 CFR §405.1016 states, in part: “When a request for an ALJ hearing is filed after a [Qualified Independent Contractor, or QIC, the second level of Medicare appeal] has issued a reconsideration, the ALJ must issue a decision, dismissal order, or remand to the QIC, as appropriate, no later than the end of the 90 calendar day period beginning on the date the request for hearing is received by the entity specified in the QIC's notice of reconsideration, unless the 90 calendar day period has been extended as provided in this subpart.”

In December 2013, the Office of Medicare Hearings and Appeals (OMHA) issued a notice concerning the growing backlog, resulting in a temporary suspension of most new non-beneficiary requests for hearing.  In part, the letter stated: “with the current backlog we do not expect general assignments [to ALJ dockets] to resume for at least 24 months and we expect post -assignment hearing wait times will continue to exceed 6 months.”

On February 12, 2014, OMHA held a Medicare Appellant Forum in Washington, DC.  Presentations at the Forum are posted online at:  http://www.hhs.gov/omha/omha_medicare_appellant_forum.html.

  • At the Forum, OMHA asked users to visit the page at least once per month – the page is typically updated around the 15th of the month. Here is the link to OMHA’s home page: http://www.hhs.gov/omha/index.html;
  • On the OMHA home page, there is a link to “Tips for Filing a Request for Hearing” which provides instructions for beneficiary appeals: http://www.hhs.gov/omha/tips_for_filing_requests_for_hearing.pdf
    • Theoretically, if an appeal envelope is marked “Attention: Beneficiary Mail Stop” it’s supposed to get the attention of the OMHA mailroom. Also Part D expedited appeals sent by mail should be addressed to: “Attention: Expedited Part D Appeal;”
  • An appellant who files a timely request for hearing before an ALJ and whose appeal continues to be pending before the ALJ at the end of the applicable ALJ adjudication period may request MAC review.  See 42 CFR §405.1104.  There is also an address for “Escalation from ALJ to Medicare Appeals Council (MAC)”: “Attention: Escalation Mail Stop.”

If you have trouble getting a hearing scheduled for a Medicare beneficiary (no decision received within 90 days of your request for hearing):

  • Contact the ALJ and inform the ALJ that the case concerns an individual beneficiary; or
  • If the ALJ is not responsive, contact the Associate Chief ALJ for the relevant OMHA field office or Anne Lloyd, OMHA Director of Field Operations, Anne.Lloyd@hhs.gov and (703) 235-0691. You will need the ALJ # or the QIC # assigned to the case.

If you cannot get a timely decision in a Medicare beneficiary’s case from the Medicare Appeals Council (MAC), you can contact: Deborah Samenow, Deputy Director Medicare Operations Division, HHS- Departmental Appeals Board: deborah.samenow@hhs.gov and (202) 565-0122.

  • Rights of Surviving Spouses to Appeal Medicare Claims

The Center has seen a pattern of surviving spouses (and others) being told by Medicare that they cannot appeal a deceased beneficiary’s Medicare claim unless they produce court documentation of their authority to represent the estate.  This is contrary to Medicare regulations and policy which allows anyone who still is obligated to make or receive payment be a party to the appeal.  See, e.g., 42 CFR §405.906(a)(1).  Many beneficiaries do not have their estates probated in court, especially when there is a surviving spouse – and we think that lots of people are probably affected by this misapplication of the rules – especially if they are unrepresented.  

Are other advocates encountering this problem? 

4.         LEGISLATIVE UPATE

  • Medicare Physician Payment (Sustainable Growth Rate, aka SGR) – One-Year Patch

On Tuesday, April 1st, President Obama signed into law the "Protecting Access to Medicare Act of 2014" (H.R. 4302).  This bill is a one year short-term "fix" or "patch" to pending Medicare physician payment cuts under the current physician payment formula called the "sustainable growth rate" or "SGR".  Due to this flawed payment formula, physicians faced an approximate 24% cut in Medicare payments on April 1st.  In addition, the fate of a number of other Medicare "extenders" was at risk, including the Qualified Individual (QI) program and the exceptions process to the annual outpatient therapy caps.  Instead of fixing SGR and addressing the extenders on a permanent basis, though, through this bill Congress passed the 17th short-term patch since the SGR formula was created in 1997.  This SGR patch extends through March 2015.

The SGR patch included the two extenders that the Center has followed most closely:

  • QI Extended for One Year – Section 201 extends the Qualified Individual (QI) Medicare Savings Program for one year, through March 31, 2015.  The QI program pays the Part B premium for individuals with income between 120 and 135% of the federal poverty level, and who also have very limited resources.
  • Therapy Cap Exceptions Process Extended for One Year – Section 103 extends the current therapy cap exceptions process through March 31, 2015.  Current law imposes a payment cap on the annual amount of Medicare coverage available for beneficiaries receiving outpatient therapy services. Two distinct caps apply to therapy services: for physical therapy (PT) and speech language pathology service (ST) combined, the cap is $1,920 in 2014.  For occupational therapy (OT) services, the cap is also $1,920.  In addition, claims exceeding a threshold of $3,700 (either for PT and ST combined, or separately for OT) are subject to a mandatory manual medical review (MMR) by Medicare contractors.

The SGR bill contains a number of new proposals, some permanent, that have not been associated with SGR in the past.  Ostensibly many of these new provisions were included as a means to pay for the short-term SGR patch.  Some of these new provisions include:

  • Further delays enforcement of hospital "two-midnight rule" – Section 111 extends the moratorium on enforcement of CMS’ two-midnight policy through March 2015.  This means that Recovery Audit Contractors (RACs) won’t be able to audit inpatient hospital claims for services from October 1, 2013 through March 31, 2015.
  • Value-based purchasing in skilled nursing facilities (SNFs) – Section 215 creates a Value-Based Purchasing (VBP) program under Medicare for skilled nursing facilities (SNFs).  Beginning October 1, 2018, Medicare will make incentive payments to facilities that reduce hospital readmissions of their residents, using a readmission measures and later, a resource use measure developed by CMS. 
  • Changes in Policies for Clinical Diagnostic Lab Tests and Advanced Diagnostic Imaging.

For more information re: the SGR bill, see the Center’s Weekly Alert “Medicare Physician Payment – Another One-Year Fix Passes Congress with Usual Extenders and Some New Payment Policies” (4/3/14), available at: https://www.medicareadvocacy.org/medicare-physician-payment-another-one-year-fix-passes-congress-with-usual-extenders-and-some-new-permanent-payment-policies/. 

  • Dueling Budgets – President Obama and House Budget Chair Paul Ryan

In March 2014, President Obama released his proposed budget for FY2015.  On April 1, 2014, House Budget Committee Chairman Paul Ryan introduced a 10 year budget proposal called “The Path to Prosperity.”  While neither of these budgets is likely to become law, they offer very different approaches to the future of the Medicare program.   

The President’s budget is very similar to last year’s budget, with respect to Medicare, in both its good and bad provisions.  On the one hand, the budget would close the doughnut hole more quickly, and achieve considerable savings for the Medicare program by requiring prescription drug rebates relating to lower income individuals, both of which the Center supports.  On the other hand, the budget includes a number of proposals that would shift additional cost burdens onto Medicare beneficiaries, including further income-relating premiums, increasing the Part B deductible, adding home health copays, taxing Medigap “first-dollar coverage” and increased cost-sharing for brand name Part D drugs obtained by individuals with the Low-Income Subsidy.

On April 10th, the House of Representatives passed  Chairman Ryan’s “Path to Prosperity” budget which purports to balance the federal budget by repealing the Affordable Care Act (yet retaining the ACA’s savings, including reducing Medicare Advantage payments) and cutting $5.1 trillion in federal spending.  With respect to Medicare, as noted by the Center on Budget and Policy Priorities (CBPP): “Once again, Chairman Ryan proposes to replace Medicare’s guarantee of health coverage with a premium-support voucher and raise the age of eligibility for Medicare from 65 to 67.  Together, these changes would shift costs to Medicare beneficiaries and (with the simultaneous repeal of health reform) leave many 65- and 66-year-olds without health coverage.”

5.  REGULATORY UPDATES

  • Final FY2015 Call Letter

On April 7, 2014, the Centers for Medicare & Medicaid Services (CMS) issued the 2015 rate announcement and final Call Letter for Medicare Advantage (MA) and Part D programs. In addition to establishing payment rates for Part C and D plans, the Call Letter sets out sub-regulatory guidance that plans are expected to follow in the next calendar plan year.  While the Call Letter touches on a number of issues, here we highlight two, particularly as they relate to differences between the draft and final Call Letter.   The 2015 final Call Letter can be found at: http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2015.pdf

In response to these MA network provider terminations, CMS offered a set of proposals in their draft Call Letter to require more timely plan sponsor notice to both CMS and plan enrollees, and to improve the notices that plan enrollees receive.  While the final Call Letter fell short of incorporating many of these proposals, it does require plans, beginning in 2015, to notify CMS at least 90 days prior to network changes the plans deem “significant” (however “significant” is left undefined).  In addition, CMS will institute a new special enrollment period (SEP) available to certain plan enrollees, effective 2015, for certain mid-year provider terminations (see Call Letter, p. 102, et seq.).

  • Windsor and Medicare Enrollment

On June 26, 2013, the Supreme Court, in U.S. v. Windsor, Executor of the Estate of Spyer, et al, ( No. 12–307), found unconstitutional section three of the Defense of Marriage Act (DOMA). In its ruling, the Court stated that Section three of DOMA is a “deprivation of the equal liberty of persons that is protected by the Fifth Amendment of the U.S Constitution.” 

On April 3, 2014, the Department of Health and Human Services (HHS) issued the following announcement entitled “HHS announces important Medicare information for people in same-sex marriages” (see: http://www.hhs.gov/news/press/2014pres/04/20140403a.html):  

Today, the Department of Health and Human Services (HHS) announced that the Social Security Administration (SSA) is now able to process requests for Medicare Part A and Part B Special Enrollment Periods, and reductions in Part B and premium Part A late enrollment penalties for certain eligible people in same-sex marriages. This is another step HHS is taking in response to the June 26, 2013 Supreme Court ruling in U.S. v. Windsor, which held section 3 of the Defense of Marriage Act (DOMA) unconstitutional. Because of this ruling, Medicare is no longer prevented by DOMA from recognizing same-sex marriages for determining entitlement to, or eligibility, for Medicare.

“Today’s announcement helps to clarify the effects of the Supreme Court’s decision and to ensure that all married couples are treated equally under the law,” said HHS Secretary Kathleen Sebelius. “We are working together with SSA to process these requests in a timely manner to ensure all beneficiaries, regardless of sexual orientation, are treated fairly under the law.” 

While Medicare is managed by the Centers for Medicare & Medicaid Services (CMS), SSA is responsible for determining eligibility for, and enrolling people in, Medicare.

For additional information, visit: http://medicare.gov/sign-up-change-plans/same-sex-marriage.html. 

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