Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

Issue Brief #76 – August 2022 – Medicare Provisions in the Inflation Reduction Act & Other Issues

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1. MEDICARE PROVISIONS in the INFLATION REDUCTION ACT of 2022 (IRA)   

On Tuesday, August 16, 2022, President Biden signed into law the Inflation Reduction Act (IRA) of 2022 (Pub Law 117-169), which includes expansive health and climate provisions.  This bill is the culmination of over a year of debate about a wide range of proposals, including an extensive expansion of Medicare benefits (see, e.g., this September 2021 CMA Alert). 

While the final bill includes only prescription drug provisions relating to Medicare, these provisions by themselves are a historic step forward concerning the price of prescription drugs and will be of significant benefit to Medicare beneficiaries.

Among other things, the IRA will:

  • Allow Medicare to negotiate with drug manufacturers for the price of some Part D and Part B drugs
    • List of first 10 drugs expected September 2023, effective date 2026
  • Cap beneficiary out-of-pocket Part D drugs costs at $2,000 per year
    • Starting in 2025
    • In 2024, the 5% coinsurance for Part D catastrophic coverage will be eliminated
    • Will also allow beneficiaries to spread out out-of-pocket costs over the year
  • Impose checks on the annual rise in costs of drugs and Part D premiums
    • Limitations on drug prices start in 2023 – requires drug companies to pay rebates if prices rise faster than inflation
    • Limitations on annual increased in Part D premiums start for 2024-2030
  • Limit monthly out-of-pocket copays for insulin to $35 (starting in 2023)
  • Eliminates cost-sharing for adult vaccines covered under Part D (also improves access to adult vaccines under Medicaid and CHIP)
  • Expand access to the full Part D low-income subsidy (“Extra Help”) up to 150% FPL (federal poverty level) – starting in 2024

For a more detailed analysis, see this Kaiser Family Foundation report titled “What Are the Prescription Drug Provisions in the Inflation Reduction Act?” (Aug. 11, 2022) and this article in Health Affairs Forefront titled “Understanding The Democrats’ Drug Pricing Package” by Rachel Sachs (Aug. 10, 2022).

2. MEDICALLY NECESSARY DENTAL

The Centers for Medicare & Medicaid Services (CMS) recently released the 2023 Medicare Physician Fee Schedule (PFS) proposed rule. It includes a proposal to broaden reimbursement for medically necessary dental services and seeks comments on various circumstances in which coverage would be appropriate. Though the proposed rule has a vast scope, advocates are encouraged to provide comments even if they are limited to a single, particular issue or topic, such as the dental proposal. Comments are due to the CMS by Sept. 6, 2022 and can be submitted at regulations.gov.

Additional Resources:

3. MEDICARE ADVANTAGE OVERSIGHT

Medicare Advantage and Nursing Home MA Issues Survey

Almost half of the eligible Medicare population (48%) are enrolled in a Medicare Advantage (MA) plan,[1] and the MA enrollment rate has been steadily growing over the years – doubling since 2009.[2] The Center for Medicare Advocacy is concerned about the increasing privatization of the Medicare program, primarily because, as we have found, MA has not lived up to its promise of delivering better care at lower cost.[3] In addition to being concerned about network adequacy requirements and oversight,[4] the Center has been involved in addressing an increasing number of alarming issues around MA plans – stemming from experiences of both individual beneficiaries and skilled nursing facilities (SNFs) from around the nation.

In April 2022, the Center conducted a short survey of SNFs in Connecticut. The goal of the survey was to determine the nature and scope of issues, if any, facilities were facing with MA plans. The survey was disseminated by CAHCF/CCAL and LeadingAge Connecticut. Of the state’s 211 SNFs, 31 facilities responded (27 for-profit and 4 non-profit), amounting to approximately 15% of the state’s SNF population.

Overall: Almost two-thirds (65%) of respondents indicated “Yes” their facility had “consistent” issues with a Medicare Advantage plan (e.g., denials of coverage and prior authorization delays).

Of those respondents who replied “Yes”:

  • 60% contended that the MA issues impacted the ability of staff to provide quality care to nursing home residents.
  • 75% answered that the issues with MA plans have increased in the past twelve months.

Issues brought up independently in the survey by the SNFs

Prior Authorization (45% of respondents), issues such as:

  • Prospective patients sitting in the hospital
  • Delays in authorization
  • Denials
  • No availability on weekends to provide prior authorizations
  • “We are seeing consistent delays in hospital authorizations with Wellcare, Aetna, and UnitedHealthcare. It has taken upwards of 3 or more days to obtain authorization.” – SNF A
  • “Prior authorization delays for admissions from hospitals. Sometimes up to 48-72 hours.” – SNF B

Denials of Coverage (75% of respondents), issues such as:

  • Not complying with the 48-hour requirement for a NOMNC
  • Cut from skilled care, even though staff is documenting skilled needs. Potentially leading to unsafe discharge.
  • “Constant NOMNC. If a member appeals and wins the appeal, the MA just issues another NOMNC to start the process over again.” – SNF C
  • “Aetna has an in-house policy of retro denials. They authorize and then they will recoup payments … and the facility is held liable.” – SNF D
  • “Patients are having their benefit cut before they are ready to return home, and are left to privately pay for room and board or have an unsafe discharge.” – SNF C
  • “These plans either do not comply with the 48 hours of notice – or – and more importantly issue denials in situations when we know Medicare would have allowed more time.” – SNF E

Not Following Medicare Coverage Criteria (25% of respondents), issues such as:

  • “Staff are educated on Medicare skilled criteria, and Medicare Advantage plans do not follow this. Residents present as needing skilled care and staff is forced to discharge them home, perhaps unsafely, because there is no payor.” – SNF F

Form to Contest Multiple Medicare Denials Issued by Medicare Advantage Plans

As discussed in recent CMA Alert (August 25, 2022), we have seen an alarming increase in complaints from Medicare Advantage enrollees who, despite requiring skilled nursing facility (“SNF”) care, receive Notices of Medicare Non-Coverage (“NOMNCs”) stating that their Medicare Advantage plan has decided to terminate coverage of their SNF care.  Although these patients frequently win expedited appeals of the Medicare coverage denials, their Medicare Advantage plans often respond by issuing a new NOMNC within several days after losing the first appeal, essentially starting the coverage denial process over again and forcing enrollees and their families to respond to a barrage of routine coverage denials. These denials conflict with the opinions of the beneficiaries’ providers, the skilled nursing and/or skilled therapy required, and the total condition of the patient. Discharge plans are rarely in place.

Although there is no appeal process to prevent MA Plans from issuing these routine NOMNCs, we want to assist enrollees and their families in challenging the practice. One way for Medicare Advantage enrollees to push back against this spike in improper and harassing denials of Medicare coverage is to file a formal complaint with the plan, known as a Grievance. The Center has drafted a Grievance form, that can be filed with a plan that issues inaccurate and repetitive NOMNCs.  After receiving a properly completed Grievance, an MA Plan must respond in writing and complete certain reporting requirements to CMS pursuant to federal regulations. 

Additionally, we encourage enrollees who file grievances with their plans to send copies of the Grievances to their state and federal representatives and to the Center for Medicare Advocacy.

CMS’ Medicare Advantage Request for Information (RFI)

On August 1, 2022, the Centers for Medicare & Medicaid Services (CMS) published a Request for Information (RFI) that “seeks input from the public regarding various aspects of the Medicare Advantage program. Responses to this request for information may be used to inform potential future rulemaking or other policy development.” The RFI can be accessed from the Federal Register here.  Comments are due August 31, 2022 and can be submitted online at https://www.regulations.gov/document/CMS-2022-0123-0001. The Center for Medicare Advocacy urges beneficiary advocates to do so.

Through the RFI, CMS is “seeking feedback on ways to strengthen Medicare Advantage” with the goal, in part, “to create more opportunities for stakeholders to engage with CMS”.  CMS solicits comments from “a wide variety of voices on the questions below, including beneficiary advocates, plans, providers, community-based organizations, researchers, employers and unions, and all other stakeholders.” 

As a beneficiary advocacy organization, the Center for Medicare Advocacy is devoted to identifying and addressing barriers to care for Medicare beneficiaries.  There are many such barriers in the traditional Medicare program, but in our experience, these problems are almost always exacerbated for enrollees in MA plans – particularly for those who tend to be more sick and have greater care needs than most MA enrollees, including those with chronic conditions.  

The Medicare Advantage industry and their champions have tremendous resources to promote their views and visions about how MA works for their enrollees.  We urge stakeholders across the board – MA plan enrollees, providers, counselors and others who might not ordinarily take part in federal agency public notice and comment efforts to weigh in with your experiences with Medicare Advantage. 

The Center for Medicare Advocacy (CMA) will be submitting separate, extensive comments to this RFI; we offer the overarching points for commenters to consider via the link below.  (Note that the comments below are arranged by the categories of comments solicited in the RFI, within which CMS poses more than 45 questions; the responses below address some (but not all) of the questions/issues most relevant to MA plan enrollees.)  

Sample Comments: https://medicareadvocacy.org/medicare-agency-is-seeking-comments-on-medicare-advantage/.  Comments Due August 31, 2022.

4. Wheelchair Seat Elevation Systems Should be Covered by Medicare

Show Your Support at www.rise4access.org to Advocate for Coverage, Register for Updates, and/or Sign the Coverage Petition

Visitors to the lobby of the Christopher and Dana Reeve Foundation headquarters have been greeted by the powerful sight of Christopher Reeve’s wheelchair which he used following a horse-riding accident that left him living with paralysis. Although Christopher Reeve died in 2004, it strikes an observer of his wheelchair, seemingly high-tech at that time, how functionally limiting his wheelchair options were. Today’s wheelchairs, with proven technological advancements, have greater potential to improve the health, safety, and quality of life of individuals who have access to wheelchair advancements. Unfortunately, Medicare coverage has not kept up with the reasonable needs of many individuals who depend on wheelchairs and to whom access to critical technological functionality has been unfairly denied.

Seat elevation is one of the technological advancements in wheelchair design that is integral to maximum functioning for certain beneficiaries. A wheelchair system, also referred to by the Centers for Medicare and Medicaid Services (CMS) as an “accessory” to a wheelchair frame, seat elevation allows individuals with certain medical needs who use wheelchairs to achieve a variety of vertical height options with a chair. The ability to alter the elevation of a wheelchair seat has many benefits, including:

  • Making it safer for an individual to transfer from place to place at the same height, thus reducing the risk of falls and fractures (for example, moving from bed to wheelchair, or wheelchair to toilet);
  • Helping to prevent long-term physical damage to an individual’s neck, back, and overall body alignment caused by constantly having to look up at standing individuals, instead allowing people to engage eye-to-eye;
  • Allowing individuals to achieve greater independent access to activities of daily living with less reliance on aides or caregivers (such as reaching into higher cabinets or looking down into a boiling pot on the stove to prepare dinner); and,
  • Providing immeasurable psychological and quality-of-life benefits.

In 2004, the Durable Medical Equipment (DME) Medicare Administrative Contractors (MACs) published a Local Coverage Article (LCA) A52504 (last revised in 2020) which continues to maintain that power seat elevation systems are “not primarily medical in nature” and, therefore, are Medicare non-covered.[5] On September 15, 2020, the ITEM (Independence Through Enhancement of Medicare and Medicaid) Coalition submitted a Formal Request for Reconsideration of the Medicare National Coverage Determination[6], a thoroughly researched and compelling document, making a strong case that CMS should determine that seat elevation systems for wheelchairs are primarily medical in nature and are covered within the Medicare statutory definition of durable medical equipment. Now, almost two years after the ITEM Coalition submitted a request for review, CMS is providing the public an opportunity to comment.

CMS is accepting public comment through September 14th at https://www.cms.gov/medicare-coverage-database/view/ncacal-tracking-sheet.aspxncaid=309&fbclid=
IwAR0v8unyjFbQwI1D3fqyEgeTFO0jYAJIsdrWGlo30LEWm4S3SdbNl8a_On4. Also access the ITEM Coalition website addressing this topic at www.rise4access.org.

5. LITIGATION UPDATE  

Center for Medicare Advocacy Cases

  • (Beneficiary Appeals of 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, as CMS has strictly enforced its definition of which services hospitals should bill as inpatient/Part A and which services they should bill as observation/Part B. However, CMS has not allowed beneficiaries to appeal the issue of whether their hospitalizations should be classified as observation or as inpatient for Medicare coverage purposes.

In September 2013, a federal judge in Connecticut granted the government’s motion to dismiss the lawsuit. Bagnall v. Sebelius, No. 3:11cv1703 (MPS),2013 WL 4356659 (D. Conn. Sept. 23, 2013). Plaintiffs appealed, limited to the issue of the right to an effective notice and review procedure for beneficiaries placed on observation status. In January 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).

Substantial motion practice and more discovery occurred (for details see previous issue briefs). The law firm of Wilson Sonsini Goodrich & Rosati joined as representatives of the plaintiffs during this phase and has provide extraordinary and invaluable pro bono assistance. A bench trial on the merits of the due process issue was then held in August 2019.  The plaintiffs presented several witness who were affected by observation status, an expert witness, and also several witnesses from the government. The government also examined several witnesses from CMS as well as their own expert. The parties then submitted post-trial briefing.

In March 2020, the trial court issued a decision. Alexander v. Azar, — F. Supp. 3d –, 2020 WL 1430089 (D. Conn. Mar. 24, 2020). It held that the Secretary of Health and Human Services violates the Fifth Amendment Due Process Clause by not allowing certain patients to appeal their placement on observation status. Thus, as matter of constitutional due process, patients who are admitted as inpatients by a physician, but whose status is changed to observation by their hospital, have the right to appeal to Medicare and argue for coverage as hospital inpatients. In this ruling, the court held that there is a protected property interest in Medicare Part A coverage, meaning that an individual cannot be deprived of that coverage without procedural safeguards. The court did not, however, find a due process violation for patients whose doctors never order inpatient status, or whose status is switched only from observation to inpatient. It drew a distinction between the actions of doctors and the actions of hospital utilization review staff.  It decided that doctors’ decisions to admit patients as inpatients are not attributable to the government and thus not “state action,” a required component of a due process claim. But it held that then when a hospital’s utilization review staff finds that patient should be in observation status rather than an inpatient, that is due to Medicare’s billing rules and therefore does constitute state action.

The court modified the existing class definition accordingly. It is now:

All Medicare beneficiaries who, on or after January 1, 2009: (1) have been or will
have been formally admitted as a hospital inpatient, (2) have been or will have
been subsequently reclassified as an outpatient receiving “observation services”;
(3) have received or will have received an initial determination or Medicare
Outpatient Observation Notice (MOON) indicating that the observation services
are not covered under Medicare Part A; and (4) either (a) were not enrolled in Part
B coverage at the time of their hospitalization; or (b) stayed at the hospital for
three or more consecutive days but were designated as inpatients for fewer than
three days, unless more than 30 days has passed after the hospital stay without the
beneficiary’s having been admitted to a skilled nursing facility. Medicare
beneficiaries who meet the requirements of the foregoing sentence but who
pursued an administrative appeal and received a final decision of the Secretary
before September 4, 2011, are excluded from this definition.

The court ordered that the agency establish an appeals process for class members, under which they can argue that their inpatient admission satisfied the relevant criteria for Part A coverage—for example, that the medical record supported a reasonable expectation of a medically necessary two-midnight stay at the time of the physician’s inpatient order. Patients in the “three-day” portion of the class will be able to pursue these appeals in an expedited manner while still hospitalized. The court also ordered the agency to provide notice of these procedural rights.

In May 2020, the government appealed the district court’s trial decision to the Second Circuit. At plaintiffs’ request, a status conference was held with the district court in October 2020 regarding implementation of the court’s order. The court ordered submissions on proposed measures the agency could take while the case is on appeal.

The government’s opening appellate brief in the Second Circuit was filed in October 2020. It challenged the district court’s decisions regarding standing, class certification, and the merits of the due process claim. Three amicus briefs in support of plaintiffs were filed in March: one from AARP and Disability Rights Connecticut, one from the American Medical Association and the Connecticut State Medical Society, and one from the American Health Care Association.

At the district court, the government filed a motion for a stay of the judgment on January 11, 2021, stating that it would be irreparably harmed by implementing the court’s order, and that there are serious questions about the district court’s decision, indicating likelihood of success on appeal. Because of the pending stay motion, the district court did not address the proposed implementation measures, as it indicated that it wished to rule on the stay motion first. By June 2021 the district court had still not acted on the motion, and the government moved for a stay in the Second Circuit. On July 16, a single judge of the Second Circuit granted a temporary stay of implementation while it referred the government’s motion to be considered by the panel of judges that retained consideration of the case. Oral argument was held in October 2021.

On January 25, 2022 the Second Circuit affirmed the trial court’s decision and grant of injunctive relief in full and denied the government’s pending stay motion as moot. Barrows v. Becerra, 24 F.4th 116 (2d Cir. 2022). The court found that one of the named plaintiffs who paid over $10,000 for nursing home care after an observation stay had demonstrated Article III standing.  The court also found no abuse of discretion in the trial court’s certification of the class, holding that the class meets the commonality and typicality requirements. It found that it was not an abuse of discretion for the district court to characterize plaintiffs’ protected property interest as the entitlement to Medicare Part A coverage, as opposed to entitlement to admission as inpatients. It found that decisions by hospital personnel to reclassify a patient from inpatient to an outpatient receiving observation services constituted state action. Finally, it conducted an analysis under Mathews v. Eldridge to agree with the trial court that the Secretary violates Due Process by offering no procedural protections for beneficiaries whose status is changed from inpatient to observation through the hospital utilization review process.

UPDATE: The Second Circuit’s decision affirming the trial court is final as of June 24, 2022. The parties have continued to meet and confer regarding implementation, and a second joint statue report was filed on August 1, 2022, with a status conference held on August 16. The government reports that it is implementing the court’s injunction via a Notice of Proposed Rulemaking. The court ordered the government to file an estimated timeline of next steps by September 30, 2022, and another status conference will be held in October.

For answers to frequently asked questions from people who think they may be class members, please see the Center’s website here.

  • Dobson v. Secretary of Health and Human Services, No. 20-11996, 2022 WL 424813 (11th Cir. Feb. 11, 2022) (per curiam) (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 Medicare beneficiary seeking Part D coverage for the “off-label” (non-FDA-approved) use of a critically needed medication. The plaintiff, Mr. Dobson, 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 (brand-name Marinol), 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 of medically-accepted indications listed in the Medicare law (specifically by DRUGDEX). Medicare looks to the compendia for acceptable off-label uses of medications, and dronabinol has a listing for intractable, disease-related nausea and vomiting. The plaintiff’s position is also supported by a federal court 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, Mr. Dobson contested the agency’s use of an inappropriately restrictive reading of “supported by citation” to claim that coverage cannot be granted.

A magistrate judge issued a decision on March 31, 2020, finding that Mr. Dobson’s medication cannot be covered by Medicare Part D. Dobson v. Azar, 451 F. Supp.3d 1346 (S.D. Fla. 2020). She deferred to the government’s argument that Mr. Dobson’s use was not a “medically accepted indication,” “supported by citation” in DRUGDEX. The judge accepted the Medicare Appeals Council’s reasoning that because Mr. Dobson does not have the identical diagnosis as the patient in the study contained within the citation for disease-related, treatment-refractory nausea and vomiting, his use cannot be supported. The plaintiff appealed the district court’s decision.

In the appellate briefing, Mr. Dobson argued that the Medicare statute mandates coverage of his medication because his use is “supported by” the DRUGDEX citation in question and that the Secretary’s interpretation is erroneous under any standard. The American Medical Association and Greater Boston Legal Services (which litigated the Tangney case) filed amicus briefs in support of Mr. Dobson.

On February 11, 2022, the 11th Circuit issued a decision vacating the entry of summary judgment for the Secretary and remanding the case with instructions to enter summary judgment for Mr. Dobson. Dobson v. Sec’y of Health & Human Servs., 2022 WL 424813 (11th Cir. Feb. 11, 2022) (per curiam). The court found that the meaning of “supported by” presents a question of law, i.e., the construction of the phrase in the governing statute. It therefore performed a careful analysis of the statute with an eye toward Congressional intent. It found that the meaning of the statute is not ambiguous and therefore the government’s interpretation was not owed deference. Starting with the text of the statute, it found that the ordinary meaning of the word “support” requires the conclusion that a compendium citation must tend to show or help prove the efficacy and safety of the prescribed off-label use. “Nothing about the common meaning of ‘support’ means that a compendium citation must hyperspecifically identify a prescribed off-label use to tend to show or help prove its efficacy and safety.” It also reviewed the particular citation in question, how it was phrased compared to other citations for the same medication, and the evidence cited within the citation. The court concluded that the citation read as a whole tends to show or help prove the efficacy and safety of the prescribed off-label use of dronabinol for Mr. Dobson. It stated that the common meaning of “support”  does not “as the Medicare Appeals Council concluded, demand that every aspect of the DRUGDEX citation must match the prescribed off-label use precisely.” It also found the legislative history of the statute to support this plain-text reading.

After remand, the district court entered judgment in favor of Mr. Dobson, in accordance with the 11th Circuit’s decision.

The Center is grateful for the pro bono assistance of Akin Gump Strauss Hauer & Feld at the appellate stage of this case.

  • Chinatown Service Center v. Cochran, No. 1:21-cv-00331 (D.D.C.) (LEP Protections under Section 1557 of the ACA).  Justice in Aging and the Center for Medicare Advocacy, along with pro bono firm Stinson LLP, filed this case on February 5, 2021 on behalf of two community-based organizations that provide social services to Limited English Proficient (LEP) older adults. In the waning days of the Trump Administration, the federal government eliminated protections for LEP individuals in health care by rolling back regulations that were put in place as part of Section 1557 of the Affordable Care Act. The protections were intended to target health disparities by requiring health plans and other entities to inform patients both of their right to interpretation, and their right to legally challenge discrimination based on language ability. But, in 2020, the Trump Administration issued a rule that eliminated these language access protections (as well as many others affecting LGBTQ people, immigrants, and women). The plaintiffs are asking the court to vacate the 2020 rule and enjoin its implementation.

The parties agreed to stay all proceedings in the matter until July 16, 2021, at which point they filed a joint status report. The court then requested briefing on whether the case should be remanded voluntarily or further stayed based on the administration’s representation that it will be revisiting the Section 1557 regulations and expects to commence a rulemaking proceeding to revise or replace the 2020 rule that eliminated the relevant language access provisions. On August 18, 2021, the government moved for voluntary remand or in the alternative a stay of proceedings. Plaintiffs filed an opposition requesting that if the case is going to be remanded, the rule should be vacated in the meantime to avoid further harm to plaintiffs and others, and that if the case is stayed in the alternative it should be time-limited with reporting requirements. The government’s motion was fully briefed as of October 8.

On October 13, 2021, the court issued an order staying the case until further notice while the Department of Health and Human Services revises the current rule. The court decided to follow the same approach it had followed in a related case, Whitman-Walker Clinic, Inc. v. HHS, No. 20-1630, 2021 WL 4033072 (D.D.C. Sept. 3, 2021), which challenges several aspects of the 2020 rule, and in which the court had found that a stay was appropriate. The court also ordered HHS to provide bi-monthly updates on its proposed rulemaking, starting in November.

The government’s filed status reports on November 30, 2021, January 31, 2022, and March 31, 2022 stating that in continued to expect to issue a Notice of Proposed Rulemaking no later than April 2022. On May 31, 2022, the government filed a status report stating that that it had submitted a draft proposed rule to the Office of Management and Budget.

UPDATE:  On July 29, 2022 the government file a status report stating that on July 25, 2022, HHS publicly released a proposed rule implementing Section 1557 of the Affordable Care Act. Plaintiffs’ counsel is reviewing the proposed rule and will be submitting comments.

6. NURSING FACILITY UPDATE

Implementation of President Biden’s nursing home reform agenda (announced Feb. 28, 2022) (”Fact Sheet: Protecting Seniors by Improving Safety and Quality of Care in the Nation’s Nursing Homes,” https://www.whitehouse.gov/?s=nursing+home) is a priority.

Nurse staffing

Federal nurse staffing study: CMS’s blog post, “Centers for Medicare & Medicaid Services Staffing Study to Inform Minimum Staffing Requirements for Nursing Homes” (Aug. 22, 2022), https://www.cms.gov/blog/centers-medicare-medicaid-services-staffing-study-inform-minimum-staffing-requirements-nursing-homes

“CMS Hosts Public Call on Nursing Home Staffing on August 29” (CMA Alert, Aug. 25, 2022), https://medicareadvocacy.org/cms-hosts-public-call-on-nursing-home-staffing-on-august-29/

CMS first describes what it learned from the Request for Information that it included in the April 2022 notice of proposed rulemaking for the annual update to Medicare Part A reimbursement.  Briefly, CMS notes that resident advocacy groups and family members “were generally strongly supportive of establishing a minimum staffing requirement, while other industry and provider groups expressed significant concern.”

CMS next describes the staffing study now underway, which buildings on previous studies and includes:

Literature review

Site visits to 75 nursing homes in 15 states (CA, CO, FL, IL, MA, MD, MO, NC, NY, OH,PA TX, VA, WA, and WY).  These site visits, involving interviews (with nursing staff, residents, families), surveys, and direct observations of direct care staff, “will provide qualitative, contextual information to inform the establishment of minimum staffing requirements.”  Data collected at the site visits “will enable the development of a simulation model to examine the impact of different staffing levels and patient acuity levels on the quality and timeliness of care.”   CMS describes the simulation model as “important to ensure that the staffing study reflects not just what staffing levels exist currently as a descriptive model, but also what staffing levels are needed for safe, quality care for patients at varying acuity levels [italics in original].”  CMS also intends to identify the impact of staffing levels on quality, barriers to implementation of staffing levels, “and any potential unintended consequences of imposing minimum staffing requirements.”

Quantitative analyses will “identify staffing levels associated with improved quality of care and resident safety in nursing homes.”  CMS will also examine trends in staffing from 2018-2021 and identify “specific factors that are related to staffing levels.”

Cost analyses, needed for all rulemaking, will identify costs of meeting the new staffing requirements.

  • Nursing facilities’ answer to low staffing levels: weaken training requirements for staff (allow temporary nurse aides to become permanent certified nurse aides without getting full state-mandated training) and allow poor quality facilities to train new aides (i.e., repeal current automatic statutory two-year ban that prohibits certain understaffed and poorly-performing facilities from directly conducting their own nurse aide training programs)

 “Nursing Home Staffing at All-Time Low; Which Solutions Will Help?” (CMA Alert, Jun. 23, 2022), https://medicareadvocacy.org/all-time-low-nursing-home-staffing/

Changes to Five-Star Rating System: Effective July 27, 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 Care Compare website.  CMS also adds one star to a facility’s overall rating only if the facility has a five-star rating in staffing (previously a star was added for four and five stars in staffing).  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.  Industry analysts find/predict that one-third of facilities lose a star in their overall rating, as a result of the changes.

“CMS Announces Changes to Staffing Measure in Five-Star Rating System; Staffing Ratings Decline for One-Third of Nursing Facilities” (CMA Alert, Jul. 28, 2022), https://medicareadvocacy.org/cms-announces-changes-to-staffing-measure-in-five-star-rating-system-staffing-ratings-decline-for-one-third-of-nursing-facilities/)

Financing and Ownership Issues: Become Ever More Important

  1. “When Private Equity Takes over a Nursing Home” by Yasmin Rafiei, The New Yorker (posted Aug. 25, 2022), When Private Equity Takes Over a Nursing Home | The New Yorker 
  1. Bill Hammond, Empire Center, “Following the Money: An analysis of ‘related company’ transactions in New York’s nursing home industry” (Jul. 5, 2022), https://www.empirecenter.org/publications/following-the-money-2/l, finds for-profit facilities in New York State hide profits in related-party transactions. Analyzing in-depth a 17-facility state nursing home chain, the Center finds that the chain’s two owners “netted at least $13.8 million in profits and salaries from their combined nursing homes businesses,” more than eight times the $1.7 million officially reported as profits. Seventeen facilities, two owners, nearly $14 million in profits. In 2018, The New York Times reported that nursing facilities’ contracts with related companies “accounted for $11 billion of nursing home spending in 2015 – a tenth of their costs – according to financial disclosures the homes submitted to Medicare.”  Jordan Rau, “Care Suffers as More Nursing Homes Feed Money Into Corporate Webs,” The New York Times (Jan. 2, 2018), https://www.nytimes.com/2018/01/02/business/nursing-homes-care-corporate.html  Nursing facilities doing business with related companies employed fewer nurses and aides and were more likely to have serious health violations. (“New York State’s For-Profit Nursing Facilities’ Related-Party Transactions Hide High Profits” (CMA Alert, Jul. 14, 2022), https://medicareadvocacy.org/new-york-states-for-profit-nursing-facilities-related-party-transactions-hide-high-profits/; “Improving Nursing Home Staffing Levels Can And Must Be Done” (CMA Alert, Jul. 21, 2022), https://medicareadvocacy.org/nursing-home-staffing-levels/) (citing American Health Care Association’s admission that 94% of nursing homes cannot meet the staffing  standard identified by CMS’s report to Congress in 2000)

Revised federal guidance (implementing revisions to Requirements of Participation issued in 2016 and delayed because of pandemic)

“CMS Acts to Implement Revised Nursing Home Standards of Care” (CMA Alert, Jul. 7, 2022), https://medicareadvocacy.org/cms-acts-to-implement-revised-nursing-home-standards-of-care/

[1] Freed, M., Fuglesten Biniek, J., Damico, A., & Neumann, T. Medicare Advantage in 2022: Enrollment Update and Key Trends. KFF. (August 25, 2022). Available at: https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2022-enrollment-update-and-key-trends/

[2] In 2009, the MA enrollment was at 24%.

[3]Lipschutz, D. A. Commentary: Don’t Further Privatize Medicare. INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 56, (2019). https://doi.org/10.1177/0046958019867612

[4] [4] Krupa, E. Voices of Medicare: Medicare Advantage Network Inadequacy. Center for Medicare Advocacy. (July 21, 2022). Available at: https://medicareadvocacy.org/voices-of-medicare-medicare-advantage-network-inadequacy/

[5] Article – Wheelchair Options/Accessories – Policy Article (A52504) (cms.gov) 

[6] NCD Reconsideration Request FINAL (D0908245-3).DOCX (cms.gov)

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