- Center for Medicare Advocacy Urges Incoming Administration to Suspend Direct Contracting Demonstration
- “Observation Status” May Disproportionately Burden Medicare Beneficiaries in the Most Vulnerable Neighborhoods
- Confirmed: Without Good Oral Health, Complete Health Is Simply Not Possible
- Senators Casey and Wyden Release Third Report on Nursing Homes and COVID-19
- Center for Medicare Advocacy Welcomes New Attorneys
On December 3, 2020, the Centers for Medicare & Medicaid Services (CMS) announced a new Geographic Direct Contracting Model demonstration (the “Model”) aimed at coordinating care and clinical management for beneficiaries in traditional Medicare in their region. The Model will be overseen by the Centers for Medicare & Medicaid Innovation (CMMI), a division of CMS.
According to a CMS press release, Model participants, called Direct Contracting Entities (DCEs), will include health plans that “will take responsibility for beneficiaries’ health outcomes” and “[w]ithin each region, organizations with experience in risk-sharing arrangements and population health will partner with health care providers and community organizations to better coordinate care.”
DCEs “will coordinate care and clinical management for beneficiaries in Original Medicare in their region” and Medicare “[b]eneficiaries in the model will remain in Original Medicare and maintain all of their benefits and coverage rights. Beneficiaries will also keep all of the protections of Original Medicare, including access to all Medicare providers and suppliers, the freedom to choose and change providers at any time, and a strong appeals and Ombudsman system.” CMS notes that beneficiaries “may also receive enhanced benefits, including additional telehealth services, easier access to home care, access to skilled nursing care without having to stay in a hospital for three days, and concurrent hospice and curative care. Participants will also have the ability to reduce beneficiary cost sharing for Medicare Part A and Part B services as well as offer beneficiaries a Part B premium subsidy.”
DCEs “may create a network of preferred providers” that “may choose to enter into alternative payment arrangements, including prospective capitation and other value-based arrangements” [emphasis added]. According to a CMMI fact sheet describing the Model, for preferred providers, “DCEs may implement a range of program integrity tools including prior authorization, concurrent or pre-claim review, pre-payment claim edits, and pre-payment and post-payment medical and payment review so long as such tools are referenced in the agreement entered into between the DCE and the Geo Preferred Provider” [emphasis added].
Beneficiaries will be aligned with a DCE in one of several ways; they “will have the option to select a DCE in their region at the start of each performance period as well as to change DCEs either quarterly or annually” but may not opt out of the Model.
CMS is soliciting letters of interest this month, December 2020, the Request for Applications will be made available in January 2021, and Applications will be due on April 2, 2021. Model Participants will be selected by June 30, 2021, to begin the demo in 2022.
Commonwealth Fund Analysis
On December 15, 2020, the Commonwealth Fund issued a blog post discussing the demonstration: “What Does the New “Geo” Model Mean for Medicare?” by Gretchen Jacobson, Elizabeth Fowler, and Melinda K. Abrams.
According to Commonwealth, “[t]his model will have the effect of enrolling Medicare beneficiaries into a managed care–like plan; it is one of the most significant changes to the way Medicare beneficiaries receive health care since managed care was introduced into Medicare in the 1970s” [emphasis added].
The blog notes that “CMS has identified 15 regions as potential sites and will select between four and 10. All are large urban areas, many in counties with the highest per capita Medicare spending in the country. In demonstration regions, virtually all beneficiaries in traditional Medicare will be required to enroll in a [Direct Contracting Entity], including people dually eligible for Medicare and Medicaid” [emphasis added].
While the Commonwealth Fund post does not take a position on the Model, it raises important issues and unanswered questions. The blog post notes: “In addition to basic operational questions, such as how beneficiaries will be assigned to participating DCEs and what happens if beneficiaries want to switch to another DCE, the Geo model also raises questions about spending and accountability.”
According to Commonwealth, such unanswered questions include:
- With respect to tracking beneficiaries’ spending and use of services, Commonwealth notes that “[t]he model does not require DCEs to report claims or encounter data to CMS. Currently, data on Medicare spending and use of services is used to uncover possible fraud, identify inappropriate care, and develop best practices.” Further, although not noted by Commonwealth, unlike Medicare Advantage (MA) plans, it does not appear that health plans or other entities participating in the Model will be subject to a medical loss ratio (MLR).
- Quality of Care “will be evaluated by surveying beneficiaries and measuring outcomes, similar to Medicare Advantage’s star ratings. Will these data be sufficient to evaluate care for frail and vulnerable beneficiaries?” However, as addressed in a recent Center for Medicare Advocacy CMA Alert, the Medicare Payment Advisory Commission (MedPAC) has identified significant concerns about the existing Medicare Advantage quality ratings, such that the Commission states that it “can no longer provide an accurate description of the quality of care in MA.”
- People dually eligible for Medicare and Medicaid “will be automatically enrolled in DCEs that also operate Medicaid managed care organizations. Will DCEs be required to coordinate Medicare and Medicaid benefits within their organizations?”
- Looking forward, Commonwealth raises questions about “Future iterations of the model. How will this model evolve? Could future DCEs look like HMOs with closed provider networks that limit beneficiaries’ access to specific providers? Could DCEs evolve into a premium support model? Will DCEs be allowed to offer Part D benefits in the future? Could DCEs improve or exacerbate inequities in health care?”
Additional Unanswered Questions
As the Commonwealth Fund notes, the current Geo Model builds on earlier versions that CMMI introduced in recent years (see, e.g., the CMMI website here). The Center for Medicare Advocacy posed a number of questions in response to earlier models (see, e.g., the Center’s comments submitted to CMMI in May 2019 here). Many previously raised issues and questions remain unaddressed, in addition to the ones posed by the Commonwealth Fund.
For example, how will this Model work with other insurance (such as Medigap or retiree coverage) – will assigned beneficiaries be incentivized to drop coverage they might not be able to get back? If utilization management tools such as prior authorization are used by preferred providers, how will assigned beneficiaries be able to challenge such usage relying on the appeals system in traditional Medicare which has no such mechanism to do so? What, if any, consumer protections applicable in the MA program – such as marketing guidelines – apply to DCEs?
What will beneficiary-focused education, outreach and notice look like – how will this Model be explained to aligned beneficiaries? Even though people will be free to see any provider under the rules of the Model, what will they actually be led to believe by DCEs and preferred providers? If the DCE offers additional coverage, inducements and incentives, will such measures be used to lure beneficiaries absent sufficient explanation and education, similar to the new MA supplemental benefits?
In many ways, the “Geo Model” appears to turn more of the federal Medicare program over to private insurers – privatizing the Medicare program even beyond the growth in Medicare Advantage, (due in part to imbalanced payment, coverage and enrollment changes made in recent years). This new Model would actively target the still-majority of Medicare beneficiaries who choose not to enroll in private, managed care plans, and, in effect, force them to do so. At the same time, CMS contemplates participation by health plans – including some of the same sponsors of current MA plans – but will not subject them to many of the minimal reporting and oversight requirements applicable to MA plans (e.g., medical loss ratio, reporting of encounter data, etc.).
There remain too many unanswered questions surrounding what the Commonwealth Fund describes as “one of the most significant changes to the way Medicare beneficiaries receive health care since managed care was introduced into Medicare in the 1970s.” Instead of rushing to implement this program, set in motion in the waning days of the Trump Administration, the Center for Medicare Advocacy urges the incoming Biden administration to suspend implementation of this Direct Contracting Model.
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A new study shows that the consequences of “observation status” may disproportionately burden Medicare beneficiaries in neighborhoods with high levels of socioeconomic deprivation.
When hospitalized patients are labeled in observation status they are considered “outpatients,” even though there may be no difference between their medical care and the care of inpatients, and even though the hospital stay may last for several days. Observation status often prevents beneficiaries from accumulating three days as a hospital inpatient, which is required for Medicare to cover post-hospital care in a skilled nursing facility (SNF). Patients are thus denied access to medically necessary rehabilitation after their hospital stays.
The new findings, published in Mayo Clinic Proceedings, show that people living in the most deprived neighborhoods were more likely to be re-admitted for a subsequent observation stay within 30 days of a first observation stay. In other words, the most vulnerable patients – and those least likely to be able to pay out-of-pocket costs on their own – are most likely to have repeat observation stays, increasing their risk for non-coverage of SNF care. The study also found the most vulnerable patients were more likely to have long observation stays, and less likely to be discharged to SNFs.
These findings are not surprising as it is prohibitively expensive to receive care in a nursing facility without Medicare coverage. The consequence of observation stays is that patients often do not receive the post-hospital care they require. As the authors put it, the study “raises the possibility that those least able to afford unexpected medical costs from serial observation hospitalizations or subsequent uncovered SNF stays are the ones most likely to bear these expenses under Medicare’s current observation policy, which in turn may discourage these patients from seeking needed health care.”
There was already evidence of racial or ethnic disparities in the use of observation stays within hospitals. This new study is another indication that Medicare’s observation status policies – and the pressure the agency places on hospitals to comply with its billing rules – have a disproportionate impact on those who can least afford it, and may contribute to health disparities and inequities.
The study bolsters the Center for Medicare Advocacy’s support for a policy change, so that time spent in observation status would count toward Medicare’s three-day inpatient hospitalization requirement for SNF care. It also reinforces the need for beneficiaries to be able to appeal an Observation Status classification to show they met Medicare’s criteria for inpatient coverage. The Center for Medicare Advocacy’s class action lawsuit pursuing beneficiaries’ right to appeal Observation Status classification is currently on appeal by the government after a favorable trial decision issued earlier this year.
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A recent article in the Journal of the American Medical Association (JAMA) calls attention to the vital need to strengthen Medicare coverage for medically necessary oral health services. It stresses the important point that, “The US population is growing older and living longer with chronic illnesses, and the successful management of some diseases is influenced by oral health.”
Titled “Oral Health in Medicare: Considerations for 21st-Century Coverage,” the JAMA article illustrates how Medicare’s longstanding and restrictive dental coverage policy is incompatible with current standards of care for various medical conditions. The authors assert, for instance, that it is “now known that diseases of the oral cavity can adversely affect the success of treatments often covered by Medicare, including heart valve replacements, hematopoietic stem cell transplants, bisphosphonate therapy, and radiation therapy.”
Although Medicare covers medically necessary oral health/dental services in a few circumstances, that coverage is “incomplete and inconsistent.” For example, Medicare pays for an inpatient dental exam prior to a kidney transplant, but not for treatment to resolve any identified dental infections in order to qualify for the kidney transplant. Similarly, Medicare’s dental policy covers tooth extractions prior to radiation directed at the jaw, but will not cover extractions or other treatment for someone who later suffers dental devastation as a direct result of radiation therapy.
The Center for Medicare Advocacy has long championed the view expressed in this article that “[a]n expansion of medically necessary services through a broader interpretation of the existing law could increase access in certain patient populations without a legislative change.” The Center has been working in broad coalition with medical, dental, public health and patient advocacy groups to advance such a coverage expansion administratively.
We firmly agree with the article’s conclusion that “Strengthening the role of oral health in Medicare could allow for coverage (and access) that is more congruent with the changing needs not only of specific individuals, but of the health care system as a whole, acknowledging that without good oral health, complete health is simply not possible.”
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In The Cost of Inaction: 19 Deaths an Hour and Rising (Dec. 2020), Senators Bob Casey (D-PA) and Ron Wyden (D-OR) describe the worsening coronavirus crisis in nursing homes, updating their two earlier reports. More than 104,000 residents and workers have died of COVID-19.
The Senators call for:
a national strategy to save lives in nursing homes, including a sufficient supply of PPE, ample access to testing, resources for vaccine distribution, funding for strike teams and adequate workforce supports, and accountability measures to uphold resident rights and permit safe visits with family.
They also call on Congress “to pass a comprehensive COVID relief package.”
The report’s four findings document the growing crisis:
- “In November, more than 15 nursing home residents died of COVID-19 per hour, with 19 residents dying each hour during the week of November 22, 2020.”
- “The number of weekly COVID-19 deaths among nursing home residents has increased 133 percent since Labor Day, and 96 percent among nursing home workers.” Id.
- “Rising COVID-19 infection rates suggest that death rates will continue increasing in nursing homes.”
Between September 6 and November 22, the number of confirmed COVID-19 cases among residents increased by 181%, from approximately 7,500 residents to 21,200 residents. In the same period, the number of confirmed cases among workers increased by 184%, from approximately 7,000 workers to 20,000 workers.
- “Workforce shortages have increased since Labor Day: In November, one in six nursing homes nationwide reported that they do not have a sufficient workforce.”
The Senators’ analysis of CMS data finds that facilities have reported nurse shortages for multiple months. “Specifically, 50 percent of the nursing homes reporting nursing staff shortages on November 1, 2020 had been reporting those same shortages for the previous two months.”
For further information, please see:
- The Cost of Inaction: 19 Deaths an Hour and Rising is available at The Cost of Inaction. 19 Deaths and Hour and Rising.pdf (senate.gov)
The two earlier reports are:
- Senators Bob Casey, Gary Peters, & Ron Wyden, COVID-19 in Nursing Homes: How the Trump Administration Failed Residents and Workers, (Jul. 1, 2020), https://www.aging.senate.gov/download/covid-19-in-nursing-homes
- Senators Bob Casey & Ron Wyden, The Cost of Inaction: 11 Deaths An Hour (Sep. 22, 2020), https://www.aging.senate.gov/download/the-cost-of-inaction
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The Center for Medicare Advocacy is pleased to announce the additions of attorneys Eric Krupa and Rachel Oest to our staff. Ms. Oest and Mr. Krupa join the Center’s team that focuses on individual advocacy and education on behalf of Medicare beneficiaries.
Prior to joining the Center for Medicare Advocacy, Eric Krupa was a fellowship attorney for Pine Tree Legal Assistance – Maine’s oldest and largest civil legal services provider. Before that he clerked for Superior Court Judge Peter A. Bogaard in New Jersey and was also a human rights attorney with the Connecticut Commission on Human Rights and Opportunities. Mr. Krupa graduated from Hunter College and Notre Dame Law School. He is licensed to practice law in Connecticut and Maine.
Before joining the Center, Rachel Oest completed two judicial clerkships with the Alaska Court System, at the trial and appellate levels. Ms. Oest graduated from Mercyhurst University in 2014 and received her law degree from Vermont Law School in 2018. She is a member of the Alaska Bar.
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