I. MEDICALLY NECESSARY ORAL HEALTH COVERAGE IN MEDICARE
The 2024 Medicare Physician Fee Schedule (PFS) proposed rule released recently includes a proposal to clarify reimbursement for dental services necessary to the clinical success of certain cancer treatments. In last year’s PFS final rule, CMS clarified and codified its interpretation of the Medicare statute to recognize payment for dental services that are “inextricably linked” to certain covered medical services. It specifically provided that starting in 2023 payment could be made for examinations and treatment to identify and eradicate oral and dental infections that could complicate the outcome of organ transplant, cardiac valve replacement, and valvuloplasty procedures, and also head and neck cancer treatments (beginning in 2024). The Center had submitted comments strongly supporting that interpretation. We stated in our comments that the CMS proposal “paves the way toward ameliorating disparities in access to critical health services and bringing Medicare’s dental coverage policy up to date with clinical standards of care.”
This year’s proposal would permit Medicare payment for certain dental services required prior to or contemporaneous with some Medicare-covered cancer treatments. The relevant language from the proposed rule is excerpted below. The Center will provide additional information in the weeks ahead. Comments are due to the CMS by Sept. 11, 2023.
From the 2024 PFS proposed rule:
“[W]e propose to amend our regulation at § 411.15(i)(3)(i)(A) to permit payment
under Medicare Parts A and Part B for:
(1) Dental or oral examination performed as part of a comprehensive workup in either the inpatient or outpatient setting prior to Medicare-covered: chemotherapy when used in the treatment of cancer, chimeric antigen receptor (CAR) T-cell therapy when used in the treatment of cancer, and the administration of high-dose bone-modifying agents (antiresorptive therapy) when used in the treatment of [cancer]; and
(2) Medically necessary diagnostic and treatment services to eliminate an oral or dental infection prior to, or contemporaneously with: chemotherapy when used in the treatment of cancer, CAR T-cell therapy when used in the treatment of cancer , and the administration of high-dose bone-modifying agents (antiresorptive therapy) when used in the treatment of cancer. Furthermore, we propose that payment under the applicable payment system could also be made for services that are ancillary to these dental services, such as x-rays, administration of anesthesia, and use of the operating room as currently described in our regulation at § 411.15(i)(3)(ii).
II. PROPOSED HOME HEALTH RULE & REQUEST FOR INFORMATION (RFI)
CMS has provided an important opportunity for beneficiaries, and their advocates, to convey experiences and concerns about the devastating lack of access to Medicare-covered home health aides, especially for individuals living with chronic and longer-term impairments. In the recent 2024 Notice of Proposed Rule Making (NPRM) for Home Health Care, the Centers for Medicare & Medicaid Services (CMS) issued a Request for Information (RFI) seeking responses to 8 questions about access to Medicare-covered home health aides. 2023-14044.pdf (govinfo.gov) (see pages 43671-43672). The Center for Medicare Advocacy expects that home health agencies will respond that there is not enough available payment or labor. Beneficiaries and advocates must discuss the critical need for availability of aide services and the consequences when qualifying coverage is not available. The Center for Medicare Advocacy has spent years expressing concerns over the shrinking home health aide benefit and we have written our full response to these 8 questions. We have also written a shorter executive summary of our response. We urge you to respond to the Home Health Aide RFI with your own stories, concerns, and experiences. Please use our responses to inform your comments and please share your submissions with us.
Responses to the RFI should be filed on or before August 29th at regulations.gov. Please make sure your voices are heard so that beneficiaries can access the aide services they need to keep them safe at home.
III. INFLATION REDUCTION ACT – PRESCRIPTION DRUG PROVISIONS – UPDATE
August 16, 2023 marked the one-year anniversary of the Inflation Reduction Act of 2022 (IRA) being signed into law by President Biden. As outlined in a previous CMA Alert (March 2, 2023), the IRA law includes historic prescription drug provisions that are already providing significant benefits for Medicare beneficiaries – and is set to add more in the future.
Note that the Part D changes also generally apply to Medicare Advantage plans that provide Part D prescription drug coverage, known as Medicare Advantage Prescription Drug (MA-PD) plans. The following is a summary of some of the drug provisions in the law.
- Allows Medicare to negotiate with drug manufacturers for the price of some Part D and Part B drugs (negotiated prices effective in 2026);
- Caps beneficiary out-of-pocket Part D drugs costs at $2,000 per year (starting in 2025 – also allows spreading of costs over course of the year, aka “Medicare Prescription Payment Plans”, previously known as “smoothing” – see below); in 2024, the 5% coinsurance for Part D catastrophic coverage will be eliminated);
- Imposes checks on the annual rise in costs of drugs and Part D premiums (limitations on drug prices started in 2023, and limitations on Part D premiums start in 2024);
- Limits monthly out-of-pocket copays for insulin to $35 (started in 2023);
- Eliminates cost-sharing for adult vaccines covered under Part D (started in 2023); and
- Expands access to the Part D Low-Income Subsidy (“LIS or Extra Help”) (starting in 2024) – full LIS up to 150% of the Federal Poverty Level (FPL) with higher resource limits.
While the IRA drug provisions are already saving Medicare beneficiaries money, the provisions taking effect in 2026 allowing the Medicare program to negotiate the prices for certain drugs are projected to yield the largest amount of savings to the Medicare program itself. The negotiation process relating to what Medicare will pay for these drugs – a limited number of high-cost drugs with no competition (single source brand name biologics without therapeutically equivalent generic or biosimilar alternatives) and that have been on the market for a number of years (7 years for small molecule, or 11 years for biologics) – are also the target of the pharmaceutical industry. Several pharmaceutical manufacturers and Chambers of Commerce have already filed lawsuits attempting to block the drug negotiation provisions (see, e.g. Georgetown’s O’Neil Institute legislation tracker, here).
The IRA drug provisions are a welcome and needed threat to business as usual for the drug industry. A new factsheet from Families USA titled “The Reality of Prescription Drug Innovation: Drug Manufacturers Limit Innovation to Protect Patents and Profits” by Bailey Reavis and Hazel Law (Aug 8, 2023) highlights how the drug industry has operated up until now: “Too often, big drug companies use their immense profits to protect their drug patents — a move that ensures they do not face legitimate price competition and allows them to continue to price gouge millions of Americans who rely on prescription drugs.”
The critical negotiation provisions – as well as the rest of the IRA – must be implemented as intended, and even strengthened. As noted by the Center for American Progress in a recently published article titled “Medicare Drug Price Negotiation Will Help Millions of Seniors and Improve Health Equity” by Gillian Tisdale and Nicole Rapfogel (Jul 17, 2023), we can’t afford to let the drug industry limit Medicare’s ability to rein in excessive drug costs:
Medicare drug price negotiation will help Black and Latino people, women, LGBTQI+ people, disabled people, and others who often have trouble affording medications. Significant potential savings that accompany Medicare negotiations enabled by the Inflation Reduction Act will compound as more drugs are subject to negotiation each year. Medicare enrollees can expect improved access to and affordability of prescription drugs for years to come.
CMS Releases Draft Guidance re: Medicare Prescription Payment Plans (aka Smoothing)
Starting in 2025, a provision of the IRA gives Medicare beneficiaries the option to pay out-of-pocket costs in monthly payments spread out over the year instead of having to pay high upfront costs at once or over a short period of time. This option will be called the Medicare Prescription Payment Plan (aka “smoothing”). On August 21, 2023, CMS released the first of two draft guidance documents open for comment that outlines (the second draft guidance document will be released in early 2024; also see CMS fact sheet and implementation timeline). Comments to the draft guidance are due September 20, 2023.
Additional Resources re: IRA Drug Provisions:
- Centers for Medicare & Medicaid Services (CMS)
- Medicare.gov webpage about the IRA changes
- New Medicare Part D Vaccines Benefit article
- New Medicare Part D Vaccines Benefit postcard for printing/posting/sharing
- Note that CMS has issued an information collection request (ICR) for the revised drug price negotiation process. CMS invites public comments on the data and information the federal government will collect for consideration if a Primary Manufacturer submits a counteroffer for a selected drug during the negotiation process. The ICR is open for public input for 30 days. The comment period will close August 24, 2023.
- Office of Assistant Secretary for Planning and Evaluation (ASPE):
- “Inflation Reduction Act Research Series: Medicare Part D Enrollee Out-of-Pocket Spending: Recent Trends and Projected Impacts of the Inflation Reduction Act” (July 6, 2023)
- State Fact Sheets: Impacts of the IRA and ACA on Lowering Health Care Costs: https://www.aspe.hhs.gov/reports/state-fact-sheets-impacts-ira-aca-lowering-health-care-costs
IV. LITIGATION UPDATE
- Johnson v. Becerra, No. 1:22-cv-03024 (D.D.C.) (Challenge to Deprivation of Home Health Aide Services by Disabled Medicare Beneficiaries). The Center for Medicare Advocacy filed this proposed class action on October 6, 2022, on behalf of two individuals and two organizations. The named plaintiffs seek to represent a nationwide class of Medicare beneficiaries who rely on home health aide services to live safely in their homes and communities. They challenge the Secretary’s policies and practices that impede and restrict the availability, accessibility, and coverage of home health aide services for individuals with chronic, disabling conditions who qualify for such services under Medicare law. These practices include the failure to properly oversee and enforce Conditions of Participation for Medicare-certified home health agencies. They also include auditing and reviewing systems and quality rating systems that discourage the provision of aide services for plaintiffs and proposed class members. The case cites violations of the Medicare statute and regulations, as well as Section 504 of the Rehabilitation Act, which prohibits discrimination on the basis of disability. Section 504 imposes a duty on federal agencies to administer programs in the most integrated setting appropriate to the needs of people with disabilities and to avoid unjustified institutionalization of disabled people. The named plaintiffs and class members they seek to represent are at risk of institutionalization for necessary care without the Medicare-covered home health aide services they require. The plaintiffs seek declaratory and injunctive relief that would remove barriers to Medicare-covered home health aide services.
On April 5, 2023, the court granted the government’s motion to dismiss and denied plaintiffs’ class certification motion as moot. Johnson v. Becerra, — F. Supp. 3d –, 2023 WL 2784874 (D.D.C. Apr. 5, 2023). The court found that all plaintiffs had adequately presented their claims to the Secretary, and it waived the requirement of exhaustion of administrative remedies. However, the court held that the plaintiffs lack standing to challenge the Secretary’s policies because they failed to plausibly allege redressability. Assuming that plaintiffs’ injuries were caused by the Secretary, the court found that it is “purely speculative” that their injuries would be redressed by a favorable court decision. It emphasized that Medicare-certified home health agencies are “third parties,” and doubted that the requested policy changes would alter the home health agencies’ behavior with regard to provision of aide services.
UPDATE: The plaintiffs appealed the district court’s dismissal of the case to the U.S. Court of Appeals for the D.C. Circuit on June 6, 2023. Their opening brief is to be filed by September 22, 2023.
- Barrows v. Becerra, 24 F.4th 116 (2d Cir. 2022) (Beneficiary Appeals of Observation Status). In November 2011, the Center for Medicare Advocacy and Justice in Aging 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 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 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.
After a dismissal by the district court, a remand by the Second Circuit, substantial motion practice and discovery, a bench trial on the merits of the due process claim was held in August 2019. In March 2020, the trial court issued a decision. Alexander v. Azar, 613 F. Supp. 3d 559 (D. Conn. 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. 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. The court modified the existing class definition accordingly.
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. Certain patients 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. On January 25, 2022 the Second Circuit affirmed the trial court’s decision in full. 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 standing to sue. 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 and agreed with the trial court that the Secretary violates Due Process by offering no procedural protections for beneficiaries whose status is reclassified from inpatient to observation through the hospital utilization review process.
In October 2022, the parties jointly requested a clarification of the judgment in the interest of facilitating and streamlining certain retrospective appeals and reducing administrative burden. The parties asked the court to clarify that if a class member who was enrolled in Part B at the time of their hospitalization prevails in appealing a retrospective claim, Medicare is not required to “unwind” and readjust the hospital claim, but may make Part A payment for the covered nursing home services without adjusting the underlying claim. On December 9, 2022, after a class notification process, the court issued an order clarifying the judgment as the parties had requested. Information about the clarification can be found here.
UPDATE: The government is implementing the court’s injunction via a Notice of Proposed Rulemaking. After substantial delays, class counsel requested a status conference with the court, which was held on August 9, 2023. Counsel noted examples of beneficiaries who have been disadvantaged by observation status but are still unable to appeal. In light of the significant delays in implementation and harm to class members, the judge ordered the government to take the next step in the rulemaking process (submission of a draft rule to the Office of Management and Budget) by October 1, 2023. It also ordered the government to submit monthly status reports on the progress of the implementation process.
For answers to frequently asked questions from people who think they may be class members, please see the Center’s website here.
- Hough v. Becerra, No. 3:22-cv-06687-ZNQ-LHG (D.N.J.) (Off-label Part D Coverage). On November 18, 2022, the Center for Medicare Advocacy and pro bono firm Murphy Orlando LLC filed suit on behalf of a retired public-school teacher in New Jersey who seeks coverage of her “off-label” (non-FDA-approved) use of a critically needed medication. Medicare denied coverage of the only medication that the beneficiary and her doctor have found to control her debilitating symptoms related to gastroparesis, a disease of the digestive system. However, the denial was based on an overly restrictive interpretation of what counts as a “medically accepted indication” under the law. After exhausting Medicare’s appeal system, the plaintiff is now requesting review in federal court to receive coverage of the medically necessary treatment.
The case is very similar to Dobson v. Secretary of Health and Human Services, 2022 WL 424813 (11th Cir. Feb. 11, 2022), in which the Center won coverage of the same drug for a Florida beneficiary. The Dobson court held that “support” for an off-label use means that an approved medical compendium that discusses the drug in question must tend to show or help prove the efficacy and safety of the beneficiary’s prescribed use. Support does not mean that a compendium must “hyperspecifically identify” the prescribed off-label use of the beneficiary, as Medicare is requiring. The same reasoning should apply in this case.
UPDATE: The parties entered into settlement talks after the complaint was filed. The case was settled in May 2023 with Medicare agreeing to cover the drug at issue for the plaintiff.
- Chinatown Service Center v. U.S. Dep’t of Health & Human Servs., 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.
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 Section 1557 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. On July 25, 2022, HHS publicly released a proposed rule implementing Section 1557 of the Affordable Care Act. The proposed regulation was published in the Federal Register on August 4, 2022. On November 20, 2022, the government filed a status report noting that the public comment period on the proposed regulation closed on October 3, 2022, and that HHS had received more than 85,000 comments.
UPDATE: After the government filed several more monthly status reports, plaintiffs requested a status conference with the court, which was held on June 27, 2023. During the conference, the government clarified that it expects the new Section 1557 rule to issue not later than “this winter.” The court ordered the government to continue filing monthly status reports, and the most recent filing from July 31, 2023, indicates that the government “aspires to the submit the rule to the Office of Information and Regulatory Affairs for final clearance before the end of this calendar year.”