Examining Bipartisan Medicare Policies that Improve Care for Patients with Chronic Conditions
May 16, 2017
Hearing before the Senate Committee on Finance
Statement for the Record
Center for Medicare Advocacy
1025 Connecticut Avenue, N.W., Suite 709
Washington, DC 20036
The Center for Medicare Advocacy, founded in 1986, is a national, non-partisan education and advocacy organization that works to ensure fair access to Medicare and to quality health care. At the Center, we educate older people and people with disabilities to help secure fair access to necessary health care services. We draw upon our direct experience with thousands of individuals to educate policy-makers about how their decisions affect the lives of real people. Additionally, we provide legal representation to ensure that people receive the health care benefits to which they are legally entitled and the quality health care they need.
Many Medicare beneficiaries have chronic conditions and need a range of health care services in a variety of health care settings in order to maintain their functional status and to avoid unnecessary and costly hospitalizations. As discussed below, the Center for Medicare Advocacy submitted recommendations on chronic care reform to the Senate Finance Committee on June 22, 2015, which we summarize below. We focus in this Statement on Jimmo v. Sebelius, a nationwide class action lawsuit addressing Medicare coverage of maintenance nursing and maintenance therapy, an issue of particular concern to Medicare beneficiaries who have chronic conditions.
Finance Committee’s Request for Comments on Chronic Care Reform
In response to the Committee’s request for comments on chronic care reform, the Center for Medicare Advocacy submitted a number of recommendations on June 22, 2015. Among the Center’s key recommendations were the need to assure full implementation of Jimmo; integration of oral health into covered and coordinated health care services; removing current barriers to medically necessary care, such as therapy caps and the three-day prior hospitalization requirement for coverage of post-acute care in a skilled nursing facility (SNF); integration of prescription drug coverage into traditional Medicare; streamlining payment systems to provide incentives for appropriate care; opposing site-neutral payments for different types of care; protecting Medicare beneficiaries from cost-shifting; improving access to care in Medicare Advantage and Part D plans by improving the administration of utilization management tools and beneficiary appeals processes; and assuring high quality care in all settings.
Jimmo and the Maintenance Level of Care and Services
Despite the Medicare program’s long-standing recognition that Medicare coverage is appropriate to maintain a patient’s functioning, a myth developed among health care providers and Medicare adjudicators that Medicare covers care and services only if a beneficiary is expected to improve.
On January 18, 2011, the Center for Medicare Advocacy and Vermont Legal Aid filed a nationwide class action lawsuit to dispel the myth and to assure that patients in both traditional Medicare and Medicare managed care – in skilled nursing facilities, home care, and outpatient therapy – receive medically necessary nursing and therapy services to maintain their function and to prevent or slow their decline or deterioration. Jimmo v. Sebelius, Civ. No. 11-cv-17 (D.Vt. Jan. 18, 2011). Six organizations representing beneficiaries with chronic conditions – Alzheimer’s Association, National Multiple Sclerosis Society, National Committee to Preserve Social Security & Medicare, Paralyzed Veterans of America, Parkinson’s Action Network, and United Cerebral Palsy – were also plaintiffs, illustrating the particularly harsh effects of the myth of improvement on people with chronic conditions. Although Parkinson’s, for example, will not “go away,” as an acute condition might, patients with Parkinson’s may need nursing care or therapy services in order to slow the inevitable course of their disease and to keep them functioning at the highest level possible.
Jimmo was settled by the parties in October 2012. Chief Judge Christina Reiss of the Federal District Court in Vermont approved the Settlement on January 24, 2013. Relevant language from the Settlement confirms Medicare coverage for medically necessary maintenance therapy services at skilled nursing facilities, home health, and outpatient therapy:
[U]nder the SNF, HH, and OPT maintenance coverage standards, skilled therapy services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a qualified therapist (“skilled care”) are necessary for the performance of a safe and effective maintenance program. Such a maintenance program to maintain the patient’s current condition or to prevent or slow further deterioration is covered so long as the beneficiary requires skilled care for the safe and effective performance of the program. When, however, the individualized assessment does not demonstrate such a necessity for skilled care, including when the performance of a maintenance program does not require the skills of a therapist because it could safely and effectively be accomplished by the patient or with the assistance of non-therapists, including unskilled caregivers, such maintenance services will not be covered under the SNF, HH, or OPT benefits.
Similar maintenance language addresses nursing services.
The New York Times heralded the Settlement in an Editorial as a “humane Medicare rule change” that may even lead to savings.
That prediction has indeed proven true. The Center for Medicare Advocacy spoke with the director of rehabilitation at a home care agency based in Michigan that has provided maintenance home care services to its clients since the Jimmo Settlement. The company reports that the rate of hospitalization of its patients declined from 32.0% to 14.2% over the past three years.
If Medicare beneficiaries with chronic conditions receive medically necessary and appropriate maintenance nursing care and therapy services and are able to avoid some hospitalizations as a result, both beneficiaries and the Medicare program benefit. Beneficiaries can receive medically necessary nursing care and therapy without being hospitalized and the Medicare program can achieve substantial savings. There is no question that many home health visits, outpatient therapy services, and even days in a SNF can be covered for the cost of a single day in the hospital.
Barriers to Full Implementation of Jimmo
Proper implementation of the Jimmo Settlement should lead to improved Medicare coverage of care for all Medicare beneficiaries, including those who have chronic conditions. Unfortunately, we continue to hear regularly from beneficiaries who are denied maintenance coverage because they “are not improving” or have “plateaued.” Some of these inappropriate denials of coverage and care occur because of public policies that limit the effectiveness of the Settlement. These policies include Medicare payment policies, quality reporting measures, and fraud investigations that target appropriate maintenance activities, among other activities.
For example, proposed quality reporting measures for SNFs, as required by the IMPACT Act, reflect solely an expectation of improvement. (The May 4, 2017 Notice of Proposed Rulemaking contains such language as “Residents receiving care in SNFs include those whose illness, injury, or condition has resulted in a loss of function, and for whom rehabilitative care is expected to help regain that function”). Although many individuals go to SNFs with an expectation of improvement, improvement is not the sole purpose of therapy in a SNF. Jimmo also recognizes that many residents may need physical, occupational, or speech therapy in order to maintain their function and to prevent or slow their decline. By evaluating, measuring, and reporting SNFs’ performance solely on an improvement scale, however, the proposed quality measures undermine Medicare beneficiaries’ ability to receive therapy for necessary and legitimate maintenance purposes. Maintenance goals must be included as additional appropriate quality measures for SNFs.
Similarly, audits may have targeted legitimate maintenance goals. In 2010, the Inspector General issued a report, Questionable Billing for Medicare Outpatient Therapy Services, which was based on the premise that outpatient therapy is intended solely “to improve a beneficiary’s functional level.” “Questionable” billing practices identified by the Inspector General included billing for therapy services throughout a year, rather than for a limited period of time, and billing that exceeded the annual therapy caps – factors that could reflect ongoing, legitimate, and appropriate maintenance therapy. Following issuance of the national report, which was based on the language of the pre-Jimmo Medicare Manual, the Inspector General conducted a series of audits of therapy providers who provide outpatient therapy services to Medicare beneficiaries under Part B. In one such report, for example, the Inspector General describes as the sole purpose of physical therapy – “to restore maximal functional independence to each individual patient by providing services that aim to restore function, improve mobility, and relieve pain.” The audit found fault with the therapist’s billing for a patient for whom “There was no expectation of significant improvement within a reasonable and predictable period of time.” The audits’ failure to recognize the legality of maintenance therapy as appropriate for Medicare Part B coverage undermines the provision of medically necessary and appropriate maintenance therapy.
Thank you for the opportunity to submit comments on Medicare policies to improve care for patients with chronic conditions. As a final comment, we urge Congress to add any new benefits and opportunities for improved care and coordination to traditional Medicare that are added to Medicare Advantage.
Toby S. Edelman
Senior Policy Attorney
Center for Medicare Advocacy
 The full set of recommendations is available at https://www.medicareadvocacy.org/center-comments-to-senate-finance-committee-regarding-chronic-care-reform/.
 See, for example, 42 C.F.R. §409.32(c) (“Even if full recovery or medical improvement is not possible, a resident may need skilled services to prevent further deterioration or preserve current capabilities”) and 42 C.F.R. §409.33(c)(5) (Maintenance rehabilitation therapy is a covered service “… when the specialized knowledge of a qualified therapist is required to design and establish a maintenance program based on an initial evaluation and periodic assessment of a resident’s needs…”).
 Jimmo v. Sebelius, Civ. No. 11-cv-17, ¶IX 6 (D.Vt. Jan. 18, 2011), https://www.medicareadvocacy.org/wp-content/uploads/2012/12/Jimmo-Settlement-Agreement-00011764.pdf.
 Id. ¶IX 8.
 Editorial, “A Humane Medicare Rule Change,” The New York Times (Oct. 24, 2012), http://www.nytimes.com/2012/10/24/opinion/a-humane-medicare-rule-change.html.
 82 Fed. Reg. 21014, 21048-21049 (May 4, 2017), https://www.gpo.gov/fdsys/pkg/FR-2017-05-04/pdf/2017-08521.pdf.
 OEI-04-09-00540 (Dec. 2010), https://oig.hhs.gov/oei/reports/oei-04-09-00540.pdf.
 HHS Inspector General, A South Texas Physical Therapy Practice Claimed Unallowable Medicare Part B Reimbursement for Outpatient Therapy Services, A-06-14-00064, page 1 (Jun. 2016), https://oig.hhs.gov/oas/reports/region6/61400064.pdf.
 Id. 4.