Issue Brief – January 2021 – Medicare Provisions In the COVID Relief & Omnibus Package, and Other Issues

I. COVID RELIEF & OMNIBUS PACKAGE – OVERVIEW OF MEDICARE PROVISIONS  

On December 21, 2020, Congress passed a COVID relief package as part of a larger omnibus spending package called the Consolidated Appropriations Act, 2021 (H.R. 133), signed into law on December 27, 2020.  In addition to various public health measures aimed at combating the COVID-19 epidemic, and provisions addressing provider, workforce, rural health, Medicaid and other issues, the omnibus package included a number of provisions that relate directly to Medicare beneficiaries, discussed further below.  Note that this brief references some, but not all, of the Medicare-related changes in this package.

Summaries of the entire package include the following provided by the House Majority Leader: A division-by-division summary of the appropriations provisions is here. A division-by-division summary of the coronavirus relief provisions is here. A division-by-division of the authorizing matters is here.

Overview of Medicare Provisions

The House Ways & Means Committee majority staff issued a summary of the overall Coronavirus relief and omnibus agreement, which includes the following section related to Medicare beneficiaries (also see the minority staff summary here, discussed further below):

“Medicare Beneficiary Investments. The legislation makes important, overdue investments for Medicare to support access to health care for beneficiaries. Specifically, it:

• Simplifies and accelerates Medicare enrollment by mandating that Part B insurance begin the first of the month following an individual’s enrollment during both the later months of the beneficiary’s Initial Enrollment Period (IEP) and during the General Enrollment Period (GEP).
• Allows the federal government to create a Part A and B Special Enrollment Period (SEP) for exceptional circumstances like natural disasters.
• Extends funding for programs that help Medicare-eligible individuals and their families and caregivers determine the best way to access affordable, comprehensive health care.
• Lowers beneficiary costs by phasing in a waiver of coinsurance for certain colorectal cancer screening tests.
• Improves quality and safety in Medicare by: 1) extending funding for the National Quality Forum for an additional three years, 2) improving the Skilled Nursing Facility Value-Based Purchasing Program, 3) extending and expanding two demonstration programs that improve quality of care for vulnerable populations, 4) encouraging access to Alzheimer’s screening through physician education, and 5) providing intermediate remedies to improve quality in poor-performing hospices.
• Improves access to mental health care by permanently expanding Medicare coverage of mental health telehealth services.
• Provides eligibility for immunosuppressive drug coverage through Medicare to individuals post-kidney transplant who do not receive coverage through other insurance.
• Helps seniors and other individuals with the high cost of medical care by permanently lowering the Medicare Expense Deduction threshold to 7.5 percent of gross income.”

Key Enrollment Changes

Of note, as outlined in the first two bullets in the summary above, these changes included key provisions of the Beneficiary Enrollment Notification and Eligibility Simplification (BENES) Act (S. 1280/H.R. 2477) – a bill championed by our colleagues at the Medicare Rights Center (MRC) and supported by many advocacy organizations, including the Center for Medicare Advocacy.  We applaud MRC and their work to get these critical changes passed into law.  As a result of these provisions, as noted in a press release by MRC, “millions of Americans will be able to avoid enrollment pitfalls of the current system and more easily connect with their earned Medicare benefits.” 

MRC’s press release provides additional detail about these changes:

• “The bill eliminates the up to seven month-long wait for coverage that people can experience when they sign up for Medicare during the General Enrollment Period (GEP) or in the later months of their Initial Enrollment Period (IEP). Beginning in 2023, Medicare coverage will begin the month after enrollment.
• It reduces barriers to care by expanding Medicare’s authority to grant a Special Enrollment Period (SEP) for “exceptional circumstances.” A long-standing flexibility within Medicare Advantage and Part D, in 2023 this critical tool will be available to facilitate enrollments program-wide, enhancing beneficiary access and administrative consistency.
• To further maximize coverage continuity and ease transitions to Medicare, the bill directs the U.S. Department of Health and Human Services (HHS) to identify ways to align Medicare’s annual enrollment periods. HHS is to present these findings in a report to Congress by January 1, 2023.”

Additional Provisions

According to a summary of the package issued by the Ways & Means Committee minority staff entitled “House Republican Provisions in the 2020 Year-End Legislation”, additional Medicare-related changes include the following (see the summary for a full list):

• “Permitting occupational therapists to conduct the initial assessment visit and complete the comprehensive assessment with respect to certain rehabilitation services for home health agencies under the Medicare program (HR 3127). This section requires the Secretary of HHS, no later than January 1, 2022, to allow occupational therapists to conduct initial assessment visits and complete comprehensive assessments for certain home health services if the referral order by the physician does not include skilled nursing care but includes occupational therapy and physical therapy or speech language pathology.”
• “Continued coverage of certain temporary transitional home infusion therapy services (HR 6218). This section ensures continued coverage of home infusion therapy services for beneficiaries taking self-administered and biological drugs that are currently included under the temporary transitional home infusion therapy benefit when the permanent home infusion therapy benefit takes effect January 1, 2021.”
• “Transitional coverage and retroactive Medicare Part D coverage for certain low-income beneficiaries (HR 3029). This section permanently authorizes, beginning January 1, 2024, the Limited Income Newly Eligible Transition (LI NET) demonstration to provide immediate temporary Part D coverage for certain individuals with low-income subsidies (LIS) while their eligibility is processed.”
• “Improve access to skilled nursing facility (SNF) services for hemophilia patients (HR 5952). This section adds blood clotting factors and items and services related to their furnishing to the categories of high-cost, low-probability services that are excluded from the skilled nursing facility (SNF) per diem prospective payment system (PPS) and are separately payable. This change will allow SNF care to be an option instead of continued inpatient care for this limited population.”
• “Expanding access to mental health services furnished through telehealth (HR 1301). This section expands access to telehealth services in Medicare to allow beneficiaries to receive mental health services via telehealth, including from the beneficiary’s home. To be eligible to receive these services via telehealth, the beneficiary must have been seen in person at least once by the physician or non-physician practitioner during the six months period prior to the first telehealth service, with additional face-to-face requirements determined by the Secretary.”

Also, with respect to provisions addressed in the summary above, the minority staff summary clarifies that funding for State Health Insurance Assistance Programs, Area Agencies on Aging, Aging and Disability Resource Centers, and the National Center for Benefits and Outreach and Enrollment is extended for three years through September 30, 2023 (at $50 million in funding for each of fiscal years 2021, 2022, and 2023).

II. LITIGATION UPDATE

Affordable Care Act Case

California v. Texas is the lawsuit brought by several states and supported by the Trump administration that seeks to strike down the entire Affordable Care Act (ACA). In 2019, a divided panel of the Fifth Circuit ruled that the ACA’s individual mandate is now unconstitutional because Congress reduced the penalty for remaining without insurance to $0. Then, although it was clear that Congress did not intend to strike down the entire ACA when it eliminated the penalty (because, among other things, it left the rest of the law in place), the Fifth Circuit concluded that many of the ACA’s provisions may not be “severable” from the mandate and therefore must also be struck down. It ordered the same district court judge who had struck down the entire law to parse through all of the ACA’s provisions with a “finer-toothed comb” to determine which can survive. However, before the remand occurred, the Supreme Court granted review in early 2020.

This lawsuit threatens the entire ACA: protections for pre-existing conditions, the expansion of Medicaid, and, critically for older adults and people with disabilities, many provisions that improved Medicare. The ACA closed the donut hole in Part D, saving beneficiaries millions on prescription drugs. It eliminated out-of-pocket costs for preventive services, such as mammograms and diabetes screenings. It extended the solvency of the Part A Trust Fund for many years. Simply put, the ACA is woven into Medicare, including over 165 provisions that help beneficiaries and strengthen the program’s financial well-being. Striking down the ACA would have disastrous ramifications for Medicare beneficiaries and the U.S. health care system as a whole.

In May 2020 the Center joined AARP and Justice in Aging in submitting an amicus brief in support of California and the other states defending the law. The amicus brief highlights the ACA’s key protections for older adults and the devastating consequences that would ensue if the law is nullified. It was one of 40 amicus briefs that were filed in support of the ACA. On June 25, 2020, Texas and several other states as well as the Trump administration filed their opening briefs, asking the Court to strike down the entire ACA. Three amicus briefs were filed in support.

Oral argument at the Supreme Court was held on November 10, 2020. Key Justices appeared to be skeptical of the claim that the entire statute must be invalidated if the mandate coupled with a $0 penalty is found unconstitutional. A decision is expected this spring.

For more information, see these resources from the Kaiser Family Foundation:

• “Potential Impact of Texas v. U.S. Decision on Key Provisions of the Affordable Care Act” (Sept. 2020).
• “Explaining Texas v. U.S.: A Guide to the Case Challenging the ACA” (Sept. 2020).
• Center for Medicare Advocacy’s Statement on Supreme Court ACA Oral Argument (Nov. 2020).

Center for Medicare Advocacy Cases

• Alexander v. Azar (formerly Bagnall v. Sebelius, Barrows v. Burwell), No. 3:11-cv-1703 (D. Conn.), No. 13-4179 (2d Cir.), No. 20-1642 (2d Cir., second appeal) (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.

On September 23, 2013, a federal judge in Connecticut granted the government’s motion to dismiss the lawsuit.  Plaintiffs appealed, but limited the appeal to the issue of the right to an effective notice and review procedure for beneficiaries placed on observation status. On January 22, 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).

The parties completed discovery on the issue ordered by the Second Circuit: whether plaintiffs have a “protected property interest” in Part A coverage of their hospital stays, which depends on whether CMS has “meaningfully channeled” discretion on the question of patient status determinations. The law firm of Wilson Sonsini Goodrich & Rosati, which has helped the Center in previous litigation, joined as representatives of the plaintiffs during this phase and has provide extraordinary and invaluable pro bono assistance.

On February 8, 2017, the court used a decision denying both parties’ motions for summary judgment and largely denying the government’s motion to dismiss. Plaintiffs then filed a renewed motion for class certification, and on July 31, 2017, the court issued a decision certifying a nationwide class of Medicare beneficiaries who have received “observation services” in a hospital since January 1, 2009. A second round of discovery was conducted, and the government filed for summary judgment for a second time on July 30, 2018, this time on the “what process is due” element of plaintiffs’ claim. The government also filed a motion to decertify the class on August 24, 2018.

After a hearing and additional dispositive motions filed by the government, the court

issued a ruling denying the government’s motion for summary judgment, motion to decertify the class, and motion to dismiss on March 27, 2019. Alexander v. Azar, 370 F. Supp. 3d 302 (D. Conn. 2019). The judge concluded that evidence submitted by the plaintiffs could reasonably establish that physician decisions about whether to classify beneficiaries as inpatients are “meaningfully constrained” by criteria set by Medicare, including the “Two-Midnight Rule” since it came into effect in 2013, and class members may therefore possess a property interest in the inpatient Medicare coverage they seek. It also found that a trial was necessary to balance the evidence submitted about the three Mathews v. Eldridge factors. The court declined to dismiss the case and also did not take the drastic step of decertifying the nationwide class, but did modify the class definition to target individuals who, in the court’s view, are more certain to experience harm from the observation designation.

A bench trial was held from August 12 – 20, 2019.  The plaintiffs presented several witness who were affected by observation status (two beneficiaries, a family member of a named plaintiff, a doctor), 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 court then set a post-trial briefing schedule and requested responses to certain questions. It asked whether it should find a property interest in Medicare Part A coverage for the periods both before and after the Two-Midnight Rule went into effect, whether that interest should be found for patients who are admitted as inpatients but later switched to observation, and how a successful appeal should affect class members’ eligibility for SNF care.

In March 2020, the 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 is violating 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 making 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 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 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 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. In the meantime, the government must still implement the court’s order, as it has not been stayed, and plaintiffs’ counsel is trying to determine an approximate timeline for when an appeals process for beneficiaries will be established.

UPDATE: The government’s opening appellate brief in Second Circuit was filed on October 27, 2020. Plaintiffs’ response will be filed by February 12, 2021.

At the district court, a status conference was held on October 16, 2020 at plaintiffs’ request. Plaintiffs pointed out that they had received no indicia of implementation of the court’s order other than that the agency was analyzing the decision and coordinating among its personnel. Since the order has no timeline for implementation, class members have been left wondering when they will be able to submit claims. This is urgent due to the age of many class members. The court requested that plaintiffs submit proposed interim measures the agency could take based on the order. That proposal was filed on November 5, 2020, and plaintiffs offered several ideas for implementation, including posting of notice on CMS’s website and development of form for class members to submit their appeals. The government filed its response on December 22, 2020, and also indicated that it intends to seek a stay of the court’s decision. The government stated that plaintiffs’ proposed implementation measures were unworkable and did not offer any counterproposals. The court has ordered another status conference for January 13, 2021.

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

• Dobson v. Azar, No. 4:18-cv-10038-JLK (S.D. Fla.), No. 20-11996 (11^th Cir.) (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 49-year-old Medicare beneficiary seeking Part D coverage for the “off-label” (non-FDA-approved) use of a critically needed medication. The plaintiff 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, 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” (DRUGDEX) of medically-accepted indications listed in the Medicare law. Medicare looks to the compendia for acceptable off-label uses of medications, and the symptoms of nausea and vomiting are listed in an entry for Dronabinol.  The plaintiff’s position is strongly supported by a recent federal 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 contests the agency’s use of an inappropriately restrictive reading of the law to claim that coverage cannot be granted.

Briefing on cross-motions for summary judgment was complete as of December 3, 2018. Oral argument on the parties’ cross motions for summary judgment was held on September 25, 2019 in Miami in front of a magistrate judge.

The judge issued a decision on March 31, 2020, finding that Mr. Dobson’s medication cannot be covered by Medicare Part D. She credited the government’s argument that Mr. Dobson’s use was not a “medically accepted indication,” “supported by citation” in DRUGDEX. This was because he does not have the identical diagnosis as the patient in the study contained within the DRUGDEX citation for disease-related, treatment-refractory nausea and vomiting. The judge rejected the reasoning of the Tangney court. In May 2020 the plaintiff appealed the district court’s decision to the 11^th Circuit.

Mr. Dobson’s opening appellate brief was filed on September 8, 2020. He argued that the plain meaning of the Medicare statute mandates coverage of his medication because his use is “supported by” the Drugdex citation in question. He also argued that even if the statute was deemed to be ambiguous, the court should not have afforded “Skidmore deference” to Medicare’s narrow interpretation of the law. The American Medical Association and Greater Boston Legal Services (which litigated the Tangney case) also filed amicus briefs in support of Mr. Dobson.

UPDATE: The government’s brief will be filed by January 19, 2020.

• Jimmo v. Sebelius, No. 5:11-cv-17 (D. Vt.) (Improvement Standard).  The settlement in Jimmo was approved on January 24, 2013.  CMS issued revisions to its Medicare Benefit Policy Manual to clarify that Medicare coverage is available for skilled maintenance services in the home health, nursing home and outpatient settings.  CMS also implemented a nationwide Educational Campaign for all who make Medicare determinations to ensure that beneficiaries with chronic conditions are not denied coverage for critical services because their underlying conditions will not improve. Pursuant to the settlement, counsel for the parties met twice a year to discuss problems with implementation and possible solutions.

After three years of urging CMS to fulfill its obligation to end continued application of the “Improvement Standard,” the Center and Vermont Legal Aid filed a Motion for Resolution of Non-Compliance with the settlement agreement. The court announced its decision on the Motion on August 18, 2016. The Order required CMS to remedy the inadequate Educational Campaign that was a cornerstone of the original Settlement Agreement. As the judge stated, “Plaintiffs bargained for the accurate provision of information regarding the maintenance coverage standard and their rights under the Settlement Agreement would be meaningless without it.”

On February 2, 2017, the court released a decision ordering CMS to carry out a Corrective Action Plan to remedy noncompliance with the Settlement. Jimmo v. Burwell, 2017 WL 462512 (D. Vt. Feb. 1, 2019) The plan includes a new webpage by CMS dedicated to the Jimmo settlement with frequently asked questions and a statement (which the court largely adopted from plaintiffs’ suggested language) that affirmatively disavows the Improvement Standard; new training for Medicare contractors making coverage decisions; and a new National Call for Medicare contractors and adjudicators to correct erroneous statements that had been made on a previous call. On February 16, 2017, the court approved the final wording of the statement to be used by CMS to affirmatively disavow the use of an Improvement Standard.  Importantly, the statement notes that the “Jimmo Settlement may reflect a change in practice for those providers, adjudicators, and contractors who may have erroneously believed that the Medicare program covers nursing and therapy services under these benefits only when a beneficiary is expected to improve.”

In late August 2017 the government published the new Jimmo-webpage on the CMS website to comply with the Corrective Action Plan. The webpage includes court-approved affirmative disavowal of the Improvement Standard in a blue box titled “Important Message About the Jimmo Settlement.” The webpage also contains links to Jimmo-related documents, such as the transmittals of the revised Manual provisions, and a new set of Frequently Asked Questions. The imprimatur of CMS on these materials will help beneficiaries and their advocate who are arguing against inappropriate coverage denials or service terminations.

The court case has now concluded, but class counsel continues to work on ensuring that access to skilled maintenance nursing and therapy for older adults and people with disabilities is not inappropriately denied or terminated because their conditions are “chronic,” “not improving,” “plateaued,” or “stable.”

For more information on the Improvement Standard, visit the Center’s website here.

III. POLICY RECOMMENDATIONS FOR INCOMING ADMINISTRATION  

The Center for Medicare Advocacy (the Center) looks forward to working with the incoming Biden Administration. In a Memorandum, submitted to Transition leaders on December 18, we recommend a number of measures that the new Department of Health and Human Services (HHS) and its Centers for Medicare & Medicaid Services (CMS) can take administratively to strengthen Medicare for beneficiaries.

Below we provide an Executive Summary of the Memorandum, as well as a link to our legislative Medicare Platform. For more information, the hyperlinked headers below will take you to the full Memorandum, which is also posted on our website at https://medicareadvocacy.org/transition-memo-2020/.

Executive Summary: Administrative Measures

Americans value Medicare. For decades it has added to the health and economic security of families nationwide. But Medicare needs attention to ensure all beneficiaries receive comprehensive coverage and equitable treatment. This is particularly true given the vulnerabilities of older people and people with disabilities, Medicare’s beneficiaries, as demonstrated by the COVID virus.  Medicare improvements are necessary to successfully respond to the pandemic. It is time to build a better Medicare for all who rely on it now, and will in the future.

To strengthen and support Medicare, the Center for Medicare Advocacy recommends the following administrative actions that would improve access to coverage and quality care for all people who rely on Medicare. These recommendations do not require legislation.  They are within the authority of the Department of Health and Human Services (DHHS) and the Centers for Medicare & Medicaid Services (CMS).

1. Strengthen Protections for Nursing Facility Residents

The Problem: The COVID pandemic has brought to public awareness the deadly consequences of the combination of poor care, inadequate staffing levels, insufficient infection protections, and the systemic roll back of regulations intended to ensure good care for residents.

Administrative Action:  

• Enforce infection control and other quality of care requirements to prevent diseases like Coronavirus from taking hold in skilled nursing facilities.
• Implement comprehensive staffing ratios to bring more qualified workers to care for our most vulnerable citizens.
• Expand training requirements to help upgrade skills and employment for aides and other direct care workers.
• Review and revise the Medicare payment model (Patient Driven Payment Model/ PDPM) and quality measure incentives to encourage access to appropriate staffing and all necessary, statutorily authorized care.

2. Redefine Inpatient Hospital Status – Increase Access to Necessary Care

The Problem: Currently, Medicare beneficiaries can spend many days in the hospital only to find they have been classified by the hospital as “outpatients,” and/or in observation status. As a consequence, they face barriers to Medicare-covered post-hospital nursing home care, which requires a prior inpatient hospital stay. An outpatient vs, inpatient label can also limit access to home health care given the incentives of the 2020 Medicare home health payment model. Further, since outpatient hospital care is covered by Medicare Part B, beneficiaries who only have Medicare Part A have no coverage at all for an outpatient/observation hospital stay.

Administrative Action:

• Revise all policies and regulations that define inpatient hospital care to include all care provided in the hospital, including Observation Status, when patients remain in the hospital for more than 24 hours.
  • Exercise CMS’ authority under existing law to define hospital “inpatient” care to include all time spent in the hospital.
  • Count all time spent in “outpatient” hospital observation status toward the prior inpatient hospitalization requirement for Medicare coverage of skilled nursing facility care.
  • Consider patients who begin home health care after time spent in “outpatient” hospital/ observation status as inpatient admissions to home health care, not “community” admissions, as provided by the 2020 Medicare home health PDGM payment model.
  • Rescind the Outpatient Prospective Payment Surgical System (ASC) Final Rule (12/2/2020) that will increase the pretense that patients cared for in hospitals are outpatients, effective January 1, 2021.  By eliminating the “Hospital Inpatient Only List,” this new rule will dramatically increase hospitals classifying patients as outpatients, which creates significant barriers to post- hospital care, leaves patients who do not have Part B fully liable for their hospital care, and increases costs to Medicare Part B.

3. Ensure Access to Medicare-Covered Home Health Care

The Problem: COVID reminds us that most people want to remain home to receive needed care and that providing care at home is often safer for the patient and patient’s community. Unfortunately, Medicare beneficiaries are increasingly unable to obtain Medicare-covered home health care for which they are eligible under the law. This is particularly true for people with on-going conditions and care needs, and for those who need home health aide services.  Ensuring access to home health should be considered as an essential component of the new administration’s work on Home and Community Based Services (HCBS).

Administrative Action:

• Enforce existing law to ensure access to all necessary Medicare-covered services for those who qualify under the law.
• Audit and monitor home health providers to ensure they have adequate staffing to provide, or arrange for, all Medicare-covered services.
• Audit and monitor the under-provision of necessary home health care, not just so-called “over-utilization” of care.
• Review and revise Medicare home health payment model (Patient Driven Grouping Model/ PDGM) and quality measure incentives, to encourage access to all necessary, statutorily authorized services, including home health aides.

4. Ensure Parity Between Traditional Medicare and Medicare Advantage and Promote Consumer Protections in Medicare Advantage

The Problem: The universal traditional Medicare program, preferred by most beneficiaries, has been neglected for years, while the private Medicare Advantage (MA) system has been repeatedly bolstered and promoted. This is leading to increased MA marketing and MA enrollment, even when it is not in the best interest of beneficiaries, Medicare, or taxpayers.

Administrative Action:

• Rebalance growing inequities between traditional Medicare and Medicare Advantage with regard to ease of enrollment, benefits, payments, and allocated resources.
  • Address ongoing Medicare Advantage overpayments (and step up recoupment through Risk-Adjustment Data Validation program (RADV) audits).
  • Enhance oversight and enforcement of MA plans (for example, regarding actual provision of coverage and care, and proper use of risk adjustments).
  • Rescind recent updates to marketing and communications guidelines (MCMG) which, among other things, blurred distinctions between marketing and education.
  • Eliminate bias towards Medicare Advantage plans in CMS materials, including outreach/enrollment materials, Medicare Plan Finder, Medicare & You, etc.

5. Actively Work to Enforce the Jimmo v. Sebelius Settlement – Require Fair Access to Coverage and Care for People with Chronic Conditions

The Problem: For too long, Medicare beneficiaries have been denied coverage and access to necessary care for which they qualify under the law, based on a long-standing myth that coverage is only available for people who will improve. In 2011 a nationwide class-action lawsuit was brought on behalf of beneficiaries with longer term, debilitating, and chronic conditions to challenge these illegal denials. (Jimmo v. Sebelius, (D. Vt., 2013; 2017)) The Jimmo case was settled with CMS in 2013. The Settlement Agreement confirmed that Medicare coverage is determined by a beneficiary’s need for skilled care, not on a beneficiary’s potential for improvement. Medicare coverage is available for skilled care to maintain or slow decline of an individual’s condition. Improvement is not required.  

Unfortunately, many beneficiaries are still denied Medicare and access to necessary skilled care based on some variation of an “Improvement Standard.” CMS is failing to ensure that the Jimmo Settlement Agreement is being properly implemented. The inadequate education of Medicare representatives, contractors, and providers about the Settlement results in continuing harm to Medicare beneficiaries in need of maintenance nursing and/or therapy services who are improperly denied access to appropriate Medicare coverage and care. Too often, when care is provided, the costs are inappropriately shifted to beneficiaries, families, and state Medicaid programs.

Administrative Action:

• Ensure CMS, its contractors, adjudicators, and providers are active partners in implementing the Jimmo Settlement.
• Require CMS to provide at least one training annually regarding the Jimmo Settlement for all contactors, adjudicators, and providers.
• Ensure Medicare providers know about the Jimmo Settlement, and provide appropriate access to coverage and care for people who need care to maintain their condition or slow decline, as authorized by law and confirmed by the court in Jimmo v. Sebelius.
• Monitor providers, contractors, and adjudicators at all levels of decision-making and appeals to ensure people who meet Jimmo criteria have appropriate access to coverage and care.
• Ensure CMS online and written materials and oral scripts recognize that Medicare can be available for necessary care to maintain an individual’s condition or slow decline, and that improvement is not a prerequisite to coverage.

6. Cover Medically Necessary Oral Health Care

The Problem: Oral health/dental care is increasingly recognized as key to overall health.  Unfortunately, CMS recognizes, but significantly limits, Medicare coverage for medically necessary oral health/dental services.  While the Medicare Act excludes coverage for “routine” dental services, the exclusion should not be broadly construed to preclude coverage for oral health procedures in all circumstances; this was not the legislative intent. Medicare coverage for medically necessary oral health care is supported by the Medicare statute, its legislative history, CMS policy, and precedent established by Medicare coverage for podiatry services. 

Administrative Action:

• Provide Medicare coverage for medically necessary oral health and dental services for conditions that pose a serious risk to a patient’s health or medical treatment. This includes instances where a physician has determined that a patient’s oral infection or disease will delay or prevent the receipt of, or otherwise complicate the outcome of, a Medicare-covered treatment for an underlying medical condition.
• Revise CMS policy to define coverage for medically necessary oral and dental therapies would not expand coverage beyond what the Medicare statute allows. To the contrary, it would uphold the general statutory exclusion of basic, routine dental care while fulfilling Congress’ goal of ensuring access to and coverage of medically necessary treatment for major health problems.

7. Additional Areas of Concern

• Improve Part D Coverage and Appeals
• Address Flaws in the Medicare Appeals System
• Improve Access to Durable Medical Equipment (DME) for Dually Eligible Individuals
• Rescind Final Rule Rolling Back Critical Non-Discrimination Provisions Pursuant to §1557 of the Affordable Care Act
• Rescind the Public Charge Rule Which Creates Almost Insurmountable Barriers to Entry into the United States for Older Immigrants
• Withdraw/Rescind the Proposed SUNSET Rule that would put an Automatic Expiration Date on Critical Medicare (and Other) Regulations
• Suspend the Direct Contracting Demonstration that Leaves Critical Consumer Protection Issues Unaddressed
• Hold More Frequent Meetings with Advocates

Although the Memorandum discussed above focuses on suggested Medicare changes that can be achieved immediately by the incoming Administration, the Center has also produced a “Medicare Platform: Principles to Improve Medicare for All Beneficiaries – Now and In the Future.” The Medicare Platform contains both administrative and legislative improvements. It includes overriding principles that address important enhancements to Medicare, additional recommendations, and context for the Center for Medicare Advocacy’s administrative recommendations. We must improve and simplify Medicare, not privatize or cut it. We can build it better; then expand access for generations to come.

Brief Highlights of Policies that Should be Addressed Immediately by Incoming Administration

Center for Medicare Advocacy Urges Incoming Administration to Suspend Direct Contracting Demonstration

As discussed in greater detail in a December 17, 2020 Center for Medicare Advocacy Weekly Alert, on December 3, 2020 the Centers for Medicare & Medicaid Services (CMS) announced a new Geographic Direct Contracting Model demonstration (the “Geo 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. 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. 

As stated in our Weekly Alert, 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. 

Trump Administration Finalized Harmful SUNSET Rule – Should be Rescinded by Incoming Administration

As discussed in a December 10, 2020 Center for Medicare Advocacy Weekly Alert, on November 4, 2020, the Department of Health and Human Services (HHS) issued a proposed rule entitled “Securing Updated and Necessary Statutory Evaluations Timely” (SUNSET) (RIN 0991–AC24; Docket No. HHS–OS– 2020–0012).

In the proposed version of the rule, it would retroactively impose an expiration provision on most HHS regulations, and establish “assessment” and “review” procedures to determine which, if any, regulations should be retained or revised. Regulations would have to be reviewed 2 years after this rule is effective or 10 years after promulgation, whichever is later. Regulations that were not reviewed in a timely manner would expire.

On January 8, 2021, HHS issued the final version of this rule (not yet published in the Federal Register, available at: https://www.hhs.gov/sites/default/files/combined-final-rule-ii.pdf; also see HHS press release here: https://www.hhs.gov/about/news/2021/01/08/hhs-finalizes-unprecedented-regulatory-reform.html). While the final rule adds additional public notice requirements and lengthens the review period for older regulations, the Center asserts that the rule is still fundamentally flawed, in part, since it forces an arbitrary expiration date on core Medicare (and other) rules and protections unless HHS intervenes.  Further, final comments on the Medicare-related provisions were due on January 4, 2021, yet the rule was finalized 4 days later on January 8.   We urge the incoming Biden Administration to rescind the rule.

IV. PREVIEW OF PENDING REPORT: NURSING HOMES AND COVID-19

COVID-19 has swept fast and furious through the nation, claiming the lives of over 106,000 nursing home residents and staff. About 38 percent of all COVID-related deaths in the United States stem from long-term care facilities.^[1] The Center for Medicare Advocacy (Center) has been looking for answers to questions we’ve all had: How did we get here? Was it inevitable? And how do we save lives moving forward? In a few weeks, the Center will release a report that attempts to answer some of these questions. Through careful research and interviews with nursing home administrators, we’ve identified best practices based on lessons learned over the past year ranging from staffing, to social isolation, to enforcement, to infection prevention infrastructure. The report will also include potential solutions to these issues through targeted policy recommendations.

V. ONGOING MEDICARE ENROLLMENT PERIOD

A. Medicare Advantage Open Enrollment Period (MA-OEP)

People who began 2021 enrolled in a private Medicare Advantage (MA) plan have an additional opportunity to switch MA plans or dis-enroll from an MA plan and return to traditional Medicare with a Part D plan during the first 3 months of the calendar year. This enrollment opportunity, called the Medicare Advantage Open Enrollment Period (MA-OEP), is not available to individuals who are in traditional Medicare and enrolled in a stand-alone Part D plan. 

B. Special Enrollment Period (SEP)

In addition, there are certain rights to use a Special Enrollment Period (SEP) to change or get out of a plan in certain circumstances. There are a number of SEPs, including when someone receives inaccurate or misleading information from the Medicare Plan Finder, customer service representatives at 1-800-MEDICARE, or an MA or Part D plan (or its agents).  For a full list of available SEPs, see, e.g., for MA SEPs: Medicare Managed Care Manual, Chapter 2 (2021 update available here) and Title 42, Code of Federal Regulations §422.62(b); for Part D SEPs see Medicare Prescription Drug Manual, Chapter 3 (2021 update available here) and Title 42, Code of Federal Regulations §423.38.

[1] The New York Times, “More Than 100,000 U.S. Coronavirus Deaths Are Linked to Nursing Homes” (updated Dec. 4, 2020), available at: https://www.nytimes.com/interactive/2020/us/coronavirus-nursing-homes.html