CMA Alert | July 28, 2022

Medicare Announces Development of Appeal Process for Certain Hospital “Observation Status” Patients

As the result of a court case, the Medicare.gov website now alerts a nationwide class of Medicare beneficiaries that they “have appeal rights” when a hospital changes their status from inpatient to outpatient observation, and that the appeal process is currently under development. View the information here (click on “Appeals in Original Medicare” and scroll to “Coming Soon: Appeal when a hospital changes your status from an inpatient to an outpatient with observation services.”).

The “observation” designation can have severe ramifications for beneficiaries. Many will face no coverage for post-hospital nursing home care, which requires a prior “inpatient” hospitalization of at least three days. Time spent in observation status does not count towards the required inpatient stay, even though observation stays can last several days and the care can be indistinguishable from inpatient care.

The Center for Medicare Advocacy, Justice in Aging, and Wilson Sonsini Goodrich & Rosati represent a class of Medicare beneficiaries who were not permitted to appeal the issue of whether their hospitalizations should be covered as inpatient services or outpatient observation services. Many class members had to pay thousands of dollars for medically necessary nursing home care, or forgo that care altogether, because they were labeled as “observation status” and not permitted to appeal for inpatient coverage. In 2020, a federal court held that as a matter of due process, Medicare must provide appeal procedures for such patients. The ruling was affirmed in January 2022.

As of July 26, 2022, the Medicare website contains general information about the court decision and who will be eligible to appeal. It explains that the court-ordered appeal process is still under development and not currently available. It also states that appeals can be filed once the process is set up, and more information will be posted on Medicare.gov when it is available. Class counsel is continuing to advocate for implementation as soon as possible.

• For more information about the court decision, see the Center’s Frequently Asked Questions.

CMS Announces Changes to Staffing Measure in Five-Star Rating System; Staffing Ratings Decline for One-Third of Nursing Facilities

Effective July 27, 2022, the Centers for Medicare & Medicaid Services (CMS) includes weekend staffing rates for nurses and information on annual turnover of nurses and administrators as it calculates the staffing measure for the federal website Care Compare.[1] CMS cites research[2] documenting that staffing levels and staff turnover “‘can substantially affect quality of care and health outcomes for people living in nursing homes.’” Since January 2022, CMS has posted weekend staffing and turnover rates on Care Compare.  An analysis reported in McKnight’s Long-Term Care News on July 28 finds that one-third of nursing facilities nationwide declined in their staffing rating as a result of the new methodology, with 939 facilities losing two or more stars.[3]

A companion Fact Sheet[4] to the July 27 Press Release identifies the four new components of the methodology for the staffing measure:

• Total nurse (RN, licensed practical nurses, and nurse aides) staffing hours per resident per day on weekends
• Total nurse staff turnover within a given year
• RN turnover with a given year
• Number of administrators who have left the nursing home within a given year

CMS converts performance on each measure into points, “which are then totaled and compared to thresholds for each staffing star rating.” Additional information is available in CMS’s Technical Users’ Guide for the Five-Star Quality Rating System, which CMS updated in July.[5]

Also effective July 27, CMS no longer adds a star to a facility’s overall rating on Care Compare if the facility has four stars (on a five-point scale) in the staffing domain.[6] Only nursing facilities with five stars in staffing will receive an additional star in their overall rating. Care Compare gives one to five stars in three domains (survey inspections, staffing, and quality measures) and calculates an overall rating, with one star defined as much below average and five stars defined as much above average. When CMS previewed this change to Care Compare on July 7, 2022,[7] various nursing home industry analysts predicted that 10-16% of facilities would no longer see increases in their overall ratings as a result of the change.[8]  

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[1] CMS, “CMS Enhances Nursing Home Rating System with Staffing and Turnover Data” (Press Release, Jul. 27, 2022), https://www.cms.gov/newsroom/press-releases/cms-enhances-nursing-home-rating-system-staffing-and-turnover-data 
[2] See Qing Zheng, Christianna S. Williams, Evan T. Shulman, Alan J. White, “Association between staff turnover and nursing home quality – evidence from payroll-based journal data,” Journal of the American Geriatrics Society (2022) 
[3] Danielle Brown, “1 in 3 nursing homes fall in staffing under new CMS Five-Star rating system,” McKnight’s Long-Term Care News (Jul. 28, 2022), https://www.mcknights.com/news/1-in-3-nursing-homes-fall-in-staffing-under-new-five-star-rating-system/ 
[4] CMS, “Updates to the Care compare Website July 2022” (Fact Sheet, Jul. 27, 2022), https://www.cms.gov/newsroom/fact-sheets/updates-care-compare-website-july-2022 
[5] CMS, Technical Users’ Guide for the Five-Star Quality Rating System (Jul. 2022), https://www.cms.gov/medicare/provider-enrollment-and-certification/certificationandcomplianc/downloads/usersguide.pdf 
[6] CMS, “CMS Enhances Nursing Home Rating System with Staffing and Turnover Data”(Press Release, Jul. 27, 2022), https://www.cms.gov/newsroom/press-releases/cms-enhances-nursing-home-rating-system-staffing-and-turnover-data 
[7] CMS, “Updates to the Nursing Home Compare Website July 2022 Updates” (Fact Sheet, Jul. 7, 2022), https://edit.cms.gov/files/document/updates-nursing-home-compare-website-july-2022-updates.pdf 
[8] Kimberly Marselas, “Thousands of nursing homes face lower Five-Star ratings with changes to staffing stars,” McKnight’s Long-Term Care News (Jul. 11, 2022), https://www.mcknights.com/news/thousands-of-nursing-homes-face-lower-five-star-ratings-with-changes-to-staffing-stars/

Nurse Staffing Study Confirms Nursing Home Resident Deaths Increased When Nurse Staffing Levels Declined During Pandemic

An analysis of “severe outbreaks” of COVID-19 in nursing homes between January 1, 2017 and June 30, 2021 finds that “the contemporaneous increase in staffing shortages and resident non-COVID-19-related deaths is consistent with worsened resident health owing to inadequate staffing.” The COVID pandemic began in 2020. In other words, nurse staffing shortages during severe outbreaks of the pandemic were correlated with resident deaths from causes other than COVID-19, documenting, once again, the correlation of insufficient nurse staffing levels with poorer resident outcomes.

The study was intended to “quantify the association of severe COVID-19 outbreaks with changes in facility staff,” using payroll-based journal data. Its final sample was 2,967 facilities, a 10% sample of facilities in the highest tier of COVID-19 outbreaks. 

During severe COVID-19 outbreaks, facilities lost nursing staff, due to temporary absences and permanent departures from the workforce. Facilities coped with these losses largely by using contract staff and paying overtime to facility staff. However, since facilities’ declining numbers of residents were larger than the reductions in nursing staff, nurse staffing levels were actually higher during severe outbreaks than before the pandemic. Nevertheless, facilities were more likely to report severe nursing shortages during severe outbreaks.

The largest decline in nursing staff was among certified nurse aides, who typically have low wages and limited benefits. As of early May 2022, more than one million nursing home staff members were confirmed to have COVID-19 and more than 2300 of them died.  The researchers observe that this death rate means that nursing homes surpass the most deadly occupations in the country, which include commercial fishing and logging.

The researchers call for strike teams to supplement facilities’ nursing staff, as needed, and increasing Medicaid reimbursement, with wage pass-throughs. They question “whether traditional staffing measures accurately capture the adequacy of staffing levels during a pandemic or if new measures are needed.”

• The article: Karen Shen, Brian E. McGarry, David C Grabowski, Jonathan Gruber, Ashvin D. Gandhi, “Staffing Patterns in US Nursing Homes During COVID-19 Outbreaks,” JAMA Health Forum. 2022;3(7):e222151. doi:10.1001/jamahealthforum.2022.2151, PDF of article available at https://jamanetwork.com/journals/jama-health-forum/fullarticle/2794538

Proposed Civil Rights Rule Marks Important Step in Restoring Health Care Protections

This week the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services issued a proposed rule that seeks to restore critical nondiscrimination protections the previous administration rolled back.

Section 1557 of the Affordable Care Act bars discrimination on the basis of race, color, national origin, sex, age, and disability in certain health programs and activities. The Trump administration gutted Section 1557’s regulations in several ways, including the elimination of notice and tagline requirements for people with limited English proficiency (LEP). Those language access requirements helped reduce health disparities in communities of color and immigrant communities by ensuring that LEP patients understood medical information and instructions.

The Center for Medicare Advocacy partnered with Justice in Aging in challenging the elimination of those key protections in a lawsuit filed on behalf of two community-based organizations that serve LEP older adults. OCR’s notice of proposed rulemaking cites the lawsuit in its analysis, and states that the proposed rule would “help restore consistency in language assistance procedural requirements and provide certainty to covered entities and consumers about what covered entities’ obligations are and what rights consumers have.”

The proposed rule also affirms protections against discrimination on the basis of sexual orientation and gender identity, and expands the scope of the rule to cover more health-related programs and services. After decades of exclusion, it includes Medicare Part B payments in the definition of “federal financial assistance,” expanding the coverage of civil rights protections within the Medicare program.

The Center for Medicare Advocacy applauds this important step in restoring and strengthening vital protections against discrimination in health care. The Center plans to submit its views on the proposed rule during the public comment period. Enforcement of civil rights is essential to creating an equitable health care system, with high quality health care for all. We encourage organizations and individuals to comment on the proposed rule during the 60-day period for written feedback once it is published in the Federal Register.

Free Webinar | Medicare Enrollment Matters

Thursday October 13, 2022 | 2;30 PM – 4:00 PM EDT

This webinar will discuss the 2023 Annual Coordinated Election Period (ACEP), including outreach and education materials issued by the Medicare program, common enrollment pitfalls, options when you miss your Initial Enrollment Period, and other considerations for Medicare beneficiaries and those who assist them. Policy changes and other updates for 2023 will also be discussed.

Register now at https://medicareadvocacy.org/webinars/

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