- MEDICARE COVERAGE of SUBSTANCE USE DISORDER CARE
Legal Action Center Issue Brief: Medicare Coverage of Substance Use Disorder Care: A Landscape Review of Benefit Coverage, Service Gaps and a Path to Reform
In February 2021, the Legal Action Center (LAC) issued a report that “analyzes Medicare’s current coverage of substance use disorder benefits, identifies gaps in coverage, and offers initial recommendation to address these barriers to care.”
As noted on LAC’s website, “[n]ational data shows that over 1.2 million individuals ages 65 and over had a substance use disorder (SUD) diagnosis in 2019, and yet only 284,000 individuals (23.6%) in this age range received any SUD treatment that year. Although overdose death rates had begun to decline in the general population before the COVID-19 public health emergency, hospitalizations and deaths related to opioid overdoses were continuing to rise among older adults ages 65 and older. COVID-19, which has disproportionately affected both older adults and people with SUDs, has both highlighted and exacerbated the health needs of older adults who face these dual epidemics.”
The summary of the report describes its Key Findings:
“Despite the growing need for services, Medicare’s coverage of SUD care is strikingly limited and out of sync with evidence-based treatment models and the current delivery system of SUD treatment. This report tracks Medicare’s coverage of SUD benefits against the widely accepted SUD continuum of care standards that have been developed by the American Society of Addiction Medicine (ASAM). The main barriers to SUD care include:
- Medicare does not authorize, as a provider-type, or reimburse most facilities that provide SUD care, specifically freestanding SUD treatment facilities that offer community-based care.
- Medicare does not authorize, as a provider-type, or allow billing by the full range of addiction practitioners that make up a significant part of the SUD treatment workforce.
- Medicare does not cover certain levels of care, such as intensive outpatient and residential programs, and other levels of care that are covered do not meet the standards set out in the ASAM criteria, such as partial hospitalization programs.
- Medicare does not have adequate reimbursement or bundled episode of care payments that would enable beneficiaries to access the range of services they need at each ASAM level of care.
- Unlike most private and employer-based insurance and Medicaid plans, Medicare is not subject to the 2008 Mental Health Parity and Addiction Equity Act (Parity Act), which requires health plans that offer SUD and mental health benefits to provide coverage that is on par with the medical and surgical benefits they offer.”
Correspondingly, LAC’s report “recommends Congress and the Centers for Medicare and Medicaid Services (CMS) remedy these gaps in coverage in Medicare by expanding the covered benefits to meet the full continuum of care, authorizing the full range of addiction practitioners and treatment facilities, and applying the Parity Act standards to protect beneficiaries with SUDs from discriminatory financial and other treatment limitations.”
Also see a Health Affairs blog on the subject drafted by LAC staff entitled “Medicare’s Discriminatory Coverage Policies For Substance Use Disorders, ” Health Affairs Blog, June 22, 2021. DOI: 10.1377/hblog20210616.166523.
- NURSING FACILITY UPDATES
Center for Medicare Advocacy Report: Nursing Home Industry: A Heavily Taxpayer-Subsidized Industry
On July 9, 2021, the Center for Medicare Advocacy issued a Special Report entitled “Nursing Home Industry is Heavily Taxpayer-Subsidized”. It is well-known that Government health care programs, Medicare and Medicaid, are the primary payers for nursing home care. The two federal programs paid facilities tens of billions of dollars for providing care to residents and were the primary payer for nearly 80% of residents. Far less known is that, in addition to receiving these direct payments, the nursing home industry also benefits from the extensive subsidies, through income-related public benefit programs – Medicaid, food assistance, housing assistance, heating assistance, cash payments, tax credits, and more – that help support its underpaid staff. The Government subsidizes the nursing home industry by billions of dollars each year by providing needs-based public benefits and earned income tax credits to its many low-wage nursing home workers.
Legislative and Administrative Proposals
Nursing home advocates have issued a joint Framework for legislative and administrative advocacy in six broad areas:
(1) staffing and workforce
(2) regulation and enforcement
(3) ownership and management standards, transparency, and accountability for quality
(4) government payment systems, financial transparency, and accountability
(5) structural changes in the long-term care delivery system
(6) nursing home redesign and rebuilding. E
“Advocates for Nursing Home Residents Propose Framework for Legislative and Administrative Changes to Benefit Residents” (CMA Alert, Jun. 24, 2021), https://medicareadvocacy.org/proposed-snf-changes/
Support: Essential Caregivers Act, H.R. 3733
Bipartisan bill; despite any public health emergency, guarantees the right to choose up to two people as essential caregivers who can provide residents with assistance 12 hours each day (and an unlimited number of hours at end of life).
“Bill To Recognize Essential Caregivers Introduced in Congress” (CMA Alert, Jul. 1, 2021), https://medicareadvocacy.org/bill-to-recognize-essential-caregivers-introduced-in-congress/.
Oppose: Nurses CARE Act of 2021, H.R. 331
Authorizes person with at least 80 hours of work as a temporary nurse aide, with on-the-job training, to be counted as a nurse aide.
“Nurse Aide Training Bill Could Diminish Quality of Care for Nursing Home Residents” (CMA Alert, Apr. 22, 2021), https://medicareadvocacy.org/nurse-aide-training-bill-could-diminish-quality-of-care-for-nursing-home-residents/.
Federal Regulation of Assisted Living
As noted in a CMA Weekly Alert “Assisted Living and Medicaid Home and Community-Based Services” (March 18, 2021), Medicaid no longer spends most of its long-term care (now typically called long-term supports and services, or LTSS) dollars on care in nursing facilities. Since 2013, Medicaid has, in fact, spent more on home and community-based services (HCBS), provided through Medicaid waivers, than it has spent on nursing home care.
The assisted living industry capitalizes on the public’s interest in “non-nursing home care” and qualifies for Medicaid waivers under HCBS. Each year, the Medicaid program spends billions of dollars paying for hundreds of thousands of residents of assisted living facilities who are eligible for coverage under various HCBS waiver programs.
However, no federal regulatory standards govern the use of HCBS money in assisted living facilities. All direct regulation of licensing and oversight requirements is done at the state level; CMS’s involvement in assisted living is limited to reviewing reports submitted by states about their operation of HCBS waiver programs. Moreover, since Medicaid beneficiaries who use HCBS waivers are, by definition, eligible for a nursing home level of care, the lack of federal standards is especially troubling. As Medicaid spending increases and as more Medicaid beneficiaries rely on Medicaid for services in assisted living facilities, the need for a federal role in regulating assisted living facilities can no longer be ignored.
Enforcing Current Law
Under the law, Medicare coverage is available for people with acute and/or chronic conditions, and for services to improve, or maintain, or slow decline of the individual’s condition, and such coverage is available even if the services are expected to continue over a long period of time. Unfortunately, however, people who legally qualify for Medicare coverage frequently have great difficulty obtaining and affording necessary home care.
On June 3, 2021, the Center for Medicare Advocacy sent a letter to the Centers for Medicare & Medicaid Services (CMS) and the Administration for Community Living (ACL) asking the agencies to ensure that the current Medicare law’s scope of home health coverage is actually available to those who qualify. The letter was signed on to by 79 national, state and local organizations. The letter is available at https://medicareadvocacy.org/wp-content/uploads/2021/06/Sign-on-Letter-Medicare-Home-Health.pdf.
As referenced in the last Alliance issue brief, in April 2021, the Center for Medicare Advocacy released an issue brief discussing this issue: Issue Brief: Medicare Home Health Coverage Law vs. Reality: https://medicareadvocacy.org/issue-brief-medicare-home-health-coverage-reality-conflicts-with-the-law/.
On July 7, 20921, CMS published in the Federal Register a Notice of Proposed Rulemaking (NPRM) – CY 2022 Home Health Prospective Payment System (HH PPS) proposed rule – 86 FR 35874 (July 7, 2021): https://www.federalregister.gov/documents/2021/07/07/2021-13763/medicare-and-medicaid-programs-cy-2022-home-health-prospective-payment-system-rate-update-home.
The Center for Medicare Advocacy has a number of concerns about this proposed rule, and will soon be issuing some draft comments for potential use by others. Comments are due August 27, 2021.
- LITIGATION UPDATE
Affordable Care Act Case
California v. Texas was the lawsuit brought by several states 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 was 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 threatened 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 also 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 had 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 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.
Update: On June 17, 2021, the Supreme Court held 7-2 that neither the individuals nor the state plaintiffs had Article III standing to being the case. The Court did not reach the merits and thus the ACA stands. Read the Center for Medicare Advocacy’s statement.
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.); Bagnall v. Becerra, 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.
In September 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. 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).
Several dispositive motions 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 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 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. It did not request a stay at the time. A status conference was held with the district court in October 2020 at plaintiffs’ request. Plaintiffs explained 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 measures the agency could take while the case is on appeal. That proposal was filed in November 2020, and plaintiffs offered several ideas for implementation, including posting of notice on CMS’s website and development of a form for class members to submit their appeals. The government filed its response in December 2020, and also indicated that it intended 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 ordered another status conference for January 2021.
The government’s opening appellate brief in the Second Circuit was filed in October 2020. It challenges the district court’s decisions regarding standing, class certification, and the merits of the due process claim. Plaintiffs’ response was filed in February 2021. Three amicus briefs in support of plaintiffs were also filed on March 5: 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. The government’s reply brief was filed with Second Circuit in April 2021, meaning the appeal is now fully briefed.
At the district court, the government filed a motion for a stay of the judgment on January 11, 2021, claiming that it would be irreparably harmed by implementing the court’s order, and that there are serious questions about the district court’s decision, which indicates a likelihood of success on appeal. Because of the pending stay motion, the status conference in January did not address proposed implementation measures, as the district court indicated that it wishes to rule on the stay motion first. The stay motion was fully briefed as of February 2021. Plaintiffs have argued against a stay based on a lack of irreparable harm to the government (demonstrated in part by its delay in requesting a stay) and a lack of likelihood of success of the government’s appeal to the Second Circuit.
Update: The district court has not on the government’s motion for a stay, and the government moved for a stay in the Second Circuit on June 22, 2021. Plaintiffs filed an opposition to the stay on July 1 and the motion was fully briefed as of July 8.
For answers to frequently asked questions from people who think they may be class members, please see the Center’s website here.
- Dobson v. Cochran, No. 4:18-cv-10038-JLK (S.D. Fla.), No. 20-11996 (11th 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 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 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 completed and a hearing was held in September 2019 in Miami before 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. The judge’s reasoning was that Mr. Dobson 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 11th Circuit.
In the appellate briefing, Mr. Dobson argues 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. The case was fully briefed in the 11th Circuit as of February 11, 2021. The Center is grateful for the pro bono assistance of Akin Gump Strauss Hauer & Feld at the appellate stage of this case.
Update: The case is scheduled for argument in the 11th Circuit on September 21, 2021.
- 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.
Update: The parties agreed to stay all proceedings in the matter until July 16, 2021, at which point they will file a joint status report apprising the court of the status of agency proceedings regarding the rule in question and submitting a proposal for further proceedings in the case.