Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

Issue Brief – May 2019 – Medicare Oral Health Coverage & Other Issues

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1. MEDICARE & ORAL HEALTH UPDATES

Medically Necessary Coverage

The Center for Medicare Advocacy has long advocated for coverage of medically necessary oral health care, which is currently supported by the Medicare statue, but is, unfortunately, significantly limited in practice due to CMS policy. Denying Medicare coverage to people for medically essential care, simply because it involves the mouth or teeth, is a misapplication of current law. It causes harm to older people and people with disabilities, impeding their access to other critical health care and even leading to preventable deaths. The Center for Medicare Advocacy released an updated Issue Brief outlining the problem, statutes and interpretations, and advocacy tips.

Adding a Comprehensive Benefit to Medicare

The Center for Medicare Advocacy continues the important work of advocating for a comprehensive oral health benefit in Part B of Medicare. The Center’s ongoing oral health advocacy focuses on expanding the broader effort to push for comprehensive Medicare coverage for oral health care, including preventive services. We have been partnering with DentaQuest, Dental Lifeline Network, Families USA and other medical and advocacy partners to move this issue forward. We are also participating in major national initiatives to develop a robust oral health benefit in Medicare that includes preventive care. As part of this collaboration, The Center for Medicare Advocacy, along with a diverse group of partners, released a white paper last year, An Oral Health Benefit in Medicare Part B: It’s Time to Include Oral Health in Health Care, which is an inter-professional, collaborative effort written and published by leaders in the consumer, healthcare and dental fields, including the American Dental Association, Center for Medicare Advocacy, the DentaQuest Foundation, Families USA, Justice in Aging, and the Santa Fe Group.

Resources:

2. POLICY UPDATES   

Durable Medical Equipment

CMS Expands List of DMEPOS Subject to Prior Authorization as a Condition of Payment

CMS has announced updates to its list of items of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) that will require prior authorization as a condition of payment. These new items will join 33 types of power wheelchairs that currently require prior authorization, bringing the list of DMEPOS that will require prior authorization to 45 items. For the first time, the list expands beyond power wheelchairs and includes 5 items of “Support Surfaces” (some mattresses, mattress overlays, and a powered air flotation bed.)[1]

Effective July 21, 2019, seven new Group 3 power wheelchair categories will each require prior authorization (Healthcare Common Procedure Coding System (HCPCS) Codes K0857, K0858, K0859, K0860, K0862, K0863 and K0864).

Effective July 21, 2019 (Phase 1) in California, Indiana, New Jersey and North Carolina (one state in each of the four DME Medicare Administrative Contractors (MACs) geographic areas), prior authorization will be required for five items in the “Support Services” category, including pressure reducing mattresses, mattress overlays, and powered air flotation beds (HCPCS Codes E0193, E0277, E0371, E0372, and E0373). Effective October 19, 2019 (Phase 2), the prior authorization requirement will expand to all states.

In addition to the expansion of the prior authorization list, the Master List of DMEPOS items that could potentially be subject to future prior authorization as a condition of payment has been updated, effective May 22, 2019. Newly added to the list are: oxygen concentrator (HCPCS E1390), home ventilator (HCPCS E0466), external ambulatory infusion pump – insulin (HCPCS E0784), and lumbar-sacral orthosis (HCPCS L0650).[2]

The Center for Medicare Advocacy published an Alert after the last DMEPOS prior authorization requirement list was expanded in September 2018. The Center examined possible benefits and problems with the prior authorization process and recommended ways to minimize/avoid denials of prior authorization requests. That Alert can be found at: https://www.medicareadvocacy.org/medicare-prior-authorization-requirement-for-power-wheelchairs-expanding-nationwide-effective-september-1-2018/.

Nursing Facilities

Draft Letter for Sign-on, also available here: https://www.medicareadvocacy.org/cma-comments-on-snf-payment-quality-for-fy-2020/

June 18, 2019

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1718-P
P.O. Box 8016
Baltimore, MD 21244-8016

Re: Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year 2020

Submitted electronically to: http://www.regulations.gov.

Dear Administrator Verma:

The undersigned organizations appreciate the Centers for Medicare & Medicaid Services’ (CMS) ongoing focus on resident care in skilled nursing facilities (SNFs). However, we believe that the proposed rule weakens every Medicare-covered resident’s access to quality care, as required under the federal Nursing Home Reform Law.[3] Specifically, our organizations are concerned that allowing more residents to participate in group therapy, along with the increased financial incentives to do so and inadequate enforcement of the group and concurrent therapy limits announced last year, may result in some nursing homes forgoing individual therapy whenever possible.

Background

In final rules published in August 2018,[4] CMS finalized changes to define group therapy “as the practice of one therapist or therapy assistant treating four patients at the same time while the patients are performing either the same or similar activities.”[5] As CMS explained the reasoning for limiting group therapy to four residents, “large groups, such as those of five or more participants, can make it difficult for the participants to engage with one another over the course of the session.”[6] CMS also previously finalized changes to allocate costs among all residents participating in group therapy.[7] As CMS noted, “when a therapist treats four patients in a group for an hour, it does not cost the SNF four times the amount (or four hours of a therapist’s salary) to provide those services.”[8] This change was in response to concerns that the previous method for reporting group therapy, which allowed SNFs to bill one hundred percent of a therapist’s time for each resident in the group, created “an inappropriate payment incentive to perform the group therapy in place of individual therapy . . . .”[9]

On April 25, 2019, CMS issued a notice of proposed rulemaking that would, among other changes, revise the definition of group therapy to allow up to six residents to participate in a group therapy session.[10] CMS stated that, based on its review of inpatient rehabilitation facility (IRF) and outpatient therapy settings, therapists seem to be capable of managing various group sizes.[11] The revision to the definition of group therapy would take effect after the implementation of the new Patient Driven Payment Model (PDPM), which will no longer factor allocated therapy minutes in determining reimbursement rates.[12]

Comments

Regulations already place residents at risk of not receiving individual therapy based on financial considerations. Federal regulations limit group and concurrent therapy to a combined 25 percent of each resident’s total therapy regimen, by discipline, during his or her Medicare-covered stay.[13] As CMS made clear in previous rulemaking, group and concurrent therapy are not appropriate for all residents or for all conditions.[14] These forms of therapy are meant to be a supplement to individual therapy and not a substitute.[15] Importantly, CMS noted that “individual therapy is generally the best way of providing therapy to a resident because it is most tailored to that specific resident’s care needs.”[16]

Despite recognizing individual therapy as the preferred method for resident care, CMS announced last year that it would make little effort to enforce the 25 percent limit on non-individual therapy. According to CMS, “when the amount of group and concurrent therapy exceeds 25 percent within a given therapy discipline . . . providers would receive a non-fatal warning . . . .”[17] More simply stated, “[t]here will be no penalty for exceeding the 25% combined concurrent and group therapy limit.”[18] The lack of a penalty for exceeding the group therapy limit is highly problematic given CMS’s recognition that SNFs “may base decisions regarding the particular mode of therapy to use for a given resident on financial considerations rather than on the clinical needs of SNF residents.”[19] As CMS knows, one of the biggest financial considerations is that group or concurrent therapy is considerably less costly for SNFs because it allows a single therapist to work with multiple residents at the same time.

Revising the definition of group therapy now to allow therapists to work with even more residents at the same time creates a bigger financial incentive for SNFs once PDPM is in effect. Under PDPM, a SNF’s per diem reimbursement for each resident will be based on five case-mix adjusted components, including physical therapy, occupational therapy, and speech language pathology. Medicare reimbursement for group therapy will no longer be based on each resident’s allocated therapy minutes but rather will depend on the resident’s characteristics. Discussing this change last year, CMS noted that it was concerned “SNFs may once again become incentivized to emphasize group and concurrent therapy, over the kind of individualized therapy which is tailored to address each beneficiary’s specific care needs which we believe is generally the most appropriate mode of therapy for SNF residents.”[20] CMS’s solution to this problem was the “non-fatal warning” described above.[21]  CMS has proposed nothing in this year’s NPRM to strengthen its “non-fatal warning” to facilities, while increasing even further the financial incentives to place residents in larger groups for therapy.

While CMS acknowledged concerns that PDPM may incentivize nursing homes to favor group and concurrent therapy over individual therapy, CMS’s solution was not a real deterrent. Under the previous payment model (RUG-IV), an excess in group therapy meant, “the minutes of therapy received in excess are not counted towards the calculation of the RUG–IV therapy classification.”[22] As a result, nursing homes did not have a financial incentive for exceeding the group therapy limit. Without similar enforcement of the non-individual therapy limit under PDPM, the proposed changes provide nursing homes with incentives to place additional residents in group therapy and pocket even more savings without penalty.

Even if SNFs did not have a financial incentive to offer group therapy over individual therapy, CMS’s basis for redefining group therapy is misguided. CMS bases its decision to revise the definition of group therapy, in part, on how group therapy is defined in IRF and outpatient therapy settings.[23] CMS explains that those settings have less restrictive definitions of group therapy and “therapists do seem capable of managing groups of various sizes.”[24] CMS clarifies that “given the greater degree of similarity between the IRF and SNF settings in terms of the intensity of therapy and patient acuity, we believe that the IRF . . . definition would be more appropriate in the SNF setting.”[25] However, CMS’s reasoning is misguided.

SNFs and IRFs provide different levels of care. Chapter 1 of the Medicare Benefit Policy Manual (MBPM) states that IRFs are “designed to provide intensive rehabilitation therapy in a resource- intensive inpatient hospital environment for patients who . . . require and can reasonably be expected to benefit from an inpatient stay and an interdisciplinary team approach to the delivery of rehabilitation care.”[26] Medicare coverage of IRF care depends, partly, on a patient’s need for “ongoing therapeutic intervention of multiple therapy disciplines” for at least three hours a day, five days a week.[27] Additionally, while an IRF patient does not need to reach a prior level of functioning or complete independent in self-care, a degree of improvement is required.[28]

Conversely, Chapter 8 of the Medicare Benefit Policy Manual clearly states, because of the settlement agreement in Jimmo v. Sebelius,[29] that there is no improvement standard for Medicare coverage of SNF care.[30] SNF residents can continue receiving skilled therapy to maintain their condition or to slow or prevent further decline. Furthermore, SNF residents only need to receive daily skilled therapy in one disciple rather than multiple therapy disciplines as is required in IRFs.[31] CMS’s claim that IRF and SNF settings are similar in terms of therapeutic intensity is wrong. IRFs by definition require a greater level of intensity. Given that IRFs provide more intensive therapy, it is not surprising that reports indicate IRF patients also have lower acuity than SNF residents.[32]

Conclusion

Our organizations respectfully ask CMS to meaningful enforce the group and concurrent therapy limits and to not revise the definition of group therapy. Under current regulations and upcoming policy changes, SNFs already have too many incentives to forgo individual therapy in favor of group therapy when possible. Moreover, CMS must not base its decision to redefine group therapy on how group therapy is defined in other settings that have different coverage criteria and patient acuity levels.

Sincerely,

Center for Medicare Advocacy
Long Term Care Community Coalition

Prescription Drugs

Medicare Advantage Prior Authorization and Step Therapy for Part B Drugs (Effective 2019)

  • See this CMS fact sheet/statement (August 2018): https://www.cms.gov/newsroom/fact-sheets/medicare-advantage-prior-authorization-and-step-therapy-part-b-drugs
    • “Step therapy is a type of prior authorization for drugs that begins medication for a medical condition with the most preferred drug therapy and progresses to other therapies only if necessary, promoting better clinical decisions.”
    • “… step therapy can only be applied to new prescriptions or administrations of Part B drugs for beneficiaries that are not actively receiving the affected medication. This means that no beneficiary currently receiving drugs under part B will have to change their medication.”
  • See CMS memo to plans (linked in the CMS fact sheet) (August 2018): https://www.cms.gov/Medicare/Health-Plans/HealthPlansGenInfo/Downloads/MA_Step_Therapy_HPMS_Memo_8_7_2018.pdf
    • “enrollees must be able to request an exception from the plan’s step therapy requirement in order to access a Part B covered drug.  The ability to request such an exception is consistent with current Part D rules involving exceptions related to the application of utilization management tools, such as step therapy requirements.  CMS recommends that MA plans follow the rules governing Part D exceptions in 42 CFR § 423.578(b) and grant an exception whenever it determines that the drug is medically necessary and is a covered Part B drug.”
    • “CMS considers plan decisions involving requests for exceptions to be pre-service organization determinations because they involve an MA plan’s refusal to provide or pay for services that the enrollee believes should be furnished or arranged by the MA plan.  As a result, exception requests are subject to applicable adjudication timeframes and notice requirements in 42 CFR §§ 422.568 and 422.572.  Organization determination timeframes require that MA plans make determinations as expeditiously as the enrollee’s health condition requires, but no later than 14 calendar days (72 hours for expedited requests) after the date the organization receives the request.  CMS strongly encourages that MA plans expedite requests for exceptions in Part B, to align with the 72-hour adjudication timeframe for requests in Part D.”

HEALTH REFORM

Repeated efforts to repeal and undermine the Affordable Care Act (ACA) have led to growing public awareness of the importance of access to health coverage and accompanying patient protections. Recognition of the important role of the ACA and Medicare, and growing support for Medicaid, have combined to shape public support for expanding health coverage, instead of retracting it.

In recognition of such growing support, on Tuesday, April 30th, the House Rules Committee held a hearing to discuss H.R. 1384, Reps. Pramila Jayapal and Debbie Dingell’s Medicare for All bill. Although the focus of the hearing was not on the current Medicare program, the combined testimony and subsequent discussion gave rise to a powerful indictment of our current health care system, and began an important conversation in Congress about how to fix it.

Ady Barkan, a health care advocate living with ALS who gave particularly compelling testimony at the hearing, noted that “[o]n the day we are born and on the day we die, and on so many days in between, all of us need medical care. And yet in this country, the wealthiest in the history of human civilization, we do not have an effective or fair or rational system for delivering that care.”

Our mission at the Center for Medicare Advocacy is to advance access to comprehensive Medicare coverage and quality health care for older people and people with disabilities.   We strongly believe in universal health care – everyone should have access to quality, affordable coverage and care. We also recognize that there are different ways to achieve that goal.

The Jayapal/Dingell Medicare for All bill would create a new program for everyone that would provide much broader coverage than the current Medicare program, with limited or no cost-sharing for individuals. Further, the Medicare for America Act, reintroduced on May 1st by Reps. Rosa DeLauro and Jan Schakowsky, would, among other things, significantly expand current Medicare coverage, cap out-of-pocket spending, and strengthen patient protections – while retaining employer-based insurance. Such expansion of coverage, and reduction or elimination of out-of-pocket expenses, would be considerable improvements over what we have now.

Although the Center strongly supports achieving universal coverage, our primary focus, and the weight of our efforts, is on identifying flaws in and improving the current Medicare program. As an advocacy organization that provides assistance for Medicare beneficiaries, and develops policy initiatives based upon the experiences of real people, our emphasis is on improving Medicare now. 

As Dr. Dean Baker from the Center for Economic and Policy Research testified during the House Rules Committee hearing, there are ways to “fix Medicare” – including adding an out-of-pocket limit for beneficiaries in traditional Medicare, incorporating the Part D drug benefit into the core Medicare program, rather than having stand-along prescription drug plans, and stopping overpayments to private Medicare Advantage plans.

These recommendations align with the Center’s recommendations to improve Medicare, contained in the Medicare Platform we issued in December 2018.

Shifting to universal coverage won’t happen overnight. However, there are enhancements to Medicare for all those who are currently eligible that could be realized soon, and that would make it a better vehicle for universal coverage. As Congress debates how best to expand quality health insurance coverage, we urge policymakers to improve Medicare now

3. LITIGATION UPDATE

  • Alexander v. Azar (formerly Bagnall v. Sebelius, Barrows v. Burwell), 3:11-cv-1703 (D. Conn.) (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.

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.  If the Secretary has established criteria for inpatient hospitalization, plaintiffs have an interest that is protected by the Due Process Clause and thus they may be entitled to notice and an opportunity to appeal their placement on observation. Plaintiffs received voluminous documentation from the government and conducted depositions of witnesses from the Department of Health and Human Services, Medicare contractors, and some of the hospitals that treated the named plaintiffs. 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 is continuing to provide invaluable pro bono assistance.

After briefing and a hearing on cross motions for summary judgment on the protected property interest issue and defendant’s supplemental motion to dismiss, the court issued a decision on February 8, 2017, denying both parties’ motions for summary judgment and largely denying the government’s motion to dismiss.  The court found that all named plaintiffs have standing and none of their claims was moot, even though some have passed away and some have resolved their underlying individual claims. It decided that factual disputes precluded summary judgment on the property interest question, though it did note that CMS considers the billing of hospitalizations as inpatient or observation to be a regulatory matter, under the authority of the Secretary, as opposed to a clinical decision. The court also found that while a treating physician’s status order plays a “role” in Medicare’s review of a hospital claim, it is not dispositive or even presumed to be correct.

As for the motion to dismiss, the court found that plaintiffs have plausibly alleged the other two aspects of a due process claim: state action (in the form of pressure on providers by CMS) and inadequacy of existing procedures (it is undisputed that there is currently no appeal method for patients placed on observation status). The court found that plaintiffs’ claim for expedited notice is now moot due to the new requirements being implemented under the NOTICE Act (“MOON” notice). The parties filed an updated plan for further discovery.

Plaintiffs filed a renewed motion for class certification on March 3, 2017. 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, and have received an “initial determination” that such services were covered, or subject to coverage, under Medicare Part B. In response to a motion for reconsideration filed by plaintiffs, the court issued a decision October 16, 2017 redefining the class to specifically include beneficiaries who have received a MOON notice. The court declined to include beneficiaries who do not have Part B, as plaintiffs had requested, but stated that it may revisit the class definition as more evidence is presented.

The second round of discovery closed on June 15, 2018, with both parties having conducted numerous depositions and exchanging documents. 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 focused on the three factors from Mathews v. Eldridge, 424 U.S. 319 (1976), which determine what procedural safeguards are due – with a particular focus on the risk of erroneous deprivation of the private interest at stake under the current procedures used (note: there are currently no procedures for beneficiaries to appeal their hospital status) The government also filed a motion to decertify the class on August 24, 2018, although the court had discouraged it. Briefing on both motions was complete by early November.

A hearing was held on November 26, 2018 to address the motion for summary judgment on the Eldridge factors, the motion to decertify the class, and whether the court should bifurcate the trial to deal with the protected property interest separately. However, the hearing focused mostly on the court’s questions about the criteria plaintiffs rely on for a protected property interest, in particular CMS’s “Two-Midnight Rule,” which plaintiffs have argued is the governing standard for inpatient admission since it was introduced in 2013. The court gave plaintiffs an opportunity to amend their complaint as it relates to the Two-Midnight Rule, which plaintiffs declined because the second complaint in intervention (filed in 2015) already makes sufficient allegations about the Rule. Over the objection of plaintiffs, the court decided that the government should have an additional opportunity to address whether the Two-Midnight Rule can create a protected property interest. The court removed the scheduled trial from the calendar and directed the government to file another, supplemental summary judgment motion specifically on whether the Two-Midnight Rule can serve to create a protected property interest. It also directed the government to address how the court should treat the remaining claims from the original complaint and first complaint in intervention if it grants summary judgment with respect to the property interest theory based on the Two-Midnight Rule. On December 6, 2018, the government alerted the court and plaintiffs that in addition to the supplementary summary judgment motion, it would also file a motion to dismiss claims from the first two complaints for lack of subject matter jurisdiction pursuant Fed. R. Civ. P. 12(h)(3).

The case was initially stayed during the partial government shutdown of late 2018 and early 2019, which delayed the briefing schedule. But the court eventually put the schedule back in motion despite the shutdown. On January 30, 2019, the government filed its supplemental summary judgment motion regarding a protected property interest based on the Two-Midnight Rule, and a motion to dismiss based on lack of subject matter jurisdiction (claiming that all of the named plaintiffs lack standing and that their claims are moot). The motions were fully briefed as of March 6, 2019.

Update: On March 27, 2019, the court issued a ruling denying the government’s motion for summary judgment, motion to decertify the class, and motion to dismiss. 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, finding that the plaintiffs continue to have standing and that their claims are not moot. The court 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. The definition is now:

All Medicare beneficiaries who, on or after January 1, 2009: (1) have received or will have received “observation services” as an outpatient during a hospitalization; (2) 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 (3) 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. 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 requested additional briefing from the parties on whether it should create two subclasses, consisting of people whose hospitalizations occurred before the Two-Midnight Rule came into effect in October 2013, whose assertion of a protected property interest relies on the application of commercial screening tools in determining patient status, and those whose hospitalizations occurred after the Two-Midnight Rule came into effect, who rely on the Rule itself. The court inquired whether the subclasses may require separate counsel, or whether they should be created solely for “case management” purposes. Plaintiffs responded on April 17, 2019, that the creation of subclasses was not required. Separate counsel is not required as there is no conflict between the two identified groups, and the creation of subclasses would not alter how plaintiffs present their case. The government responded on May 1 that subclasses should be created, including the appointment of separate counsel.

On April 3, 2019, the government also filed a motion for clarification and reconsideration of the court’s March 27 ruling on April 3, 2019. It asked the court to identify what the criteria for admission are under the Two-Midnight Rule and the “legal framework” the court applied in determining that such criteria would give rise to a protected property interest. The government also requested that the court reconsider the new class definition on the grounds that not everyone who is hospitalized for three days requires follow-up SNF care. (This issue was addressed by the parties in previous briefing.) The court has instructed plaintiffs not to respond to this motion unless it directs them to.

The court held a telephonic status conference on April 3, 2019 to discuss scheduling, and subsequently issued an order setting trial to bring on August 12, 2019. The joint trial memorandum and any motions in limine are due July 12, and a pre-trial conference will be held July 29.

As class counsel receives inquiries from people asking whether they can “join” the case, we advise them that no action is required of class members, but they should save any paperwork relating to their hospitalization and costs resulting from it. We also encourage them to share their observation status story on the Center’s website here: https://www.medicareadvocacy.org/submit-your-observation-status-story/

 

  • Dobson v. Azar, 4:18-cv-10038-JLK (S.D. Fla.) (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, we will contest the agency’s use of an inappropriately restrictive reading of the law to claim that coverage cannot be granted.  The goal is to get Mr. Dobson the medication he desperately needs, and help ensure appropriate application of the law governing off label uses in other cases.

The parties consented to proceed before a magistrate judge on June 13, 2018. Briefing on cross-motions for summary judgment was complete as of December 3, 2018. On January 10, 2019, the court alerted the parties that the case had been reassigned to a different magistrate judge. The parties consented to jurisdiction by the new magistrate judge on February 7, 2019.

 

  • 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.

On March 1, 2016, the Center and its co-counsel, Vermont Legal Aid, filed a Motion for Resolution of Non-Compliance with the settlement agreement. The filing came after three years of urging the Centers for Medicare & Medicaid Services (CMS) to fulfill its obligation to end continued application of an “Improvement Standard” by Medicare providers, contractors and adjudicators to deny Medicare coverage for skilled maintenance nursing and therapy.

The court announced its decision on the Motion for Resolution of Non-Compliance 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.” The parties negotiated but could not come to agreement on what a Corrective Action Plan should entail.  The court then ordered each party to submit a brief explaining and justifying their proposed corrective action plans, as well as a response to the other party’s plan.

On February 2, 2017, the court released a decision ordering CMS to carry out a Corrective Action Plan to remedy noncompliance with the Settlement. 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. The government was given an opportunity to object to the language of the corrective statement, and the parties negotiated final wording which was submitted to the court.  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 can be found here.  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, see the Center’s website at: https://www.medicareadvocacy.org/medicare-info/improvement-standard/.

  • Exley v. Burwell (formerly Lessler v. Burwell), No. 3:14-cv-1230 (D. Conn.) (ALJ Delays) The Medicare statute and regulations require that an administrative law judge (ALJ) issue a decision within 90 days the filing of a request for hearing. While the Chief ALJ has stated that individual beneficiary cases should not be delayed, still most of the Center’s cases were exceeding statutory timelines for decisions.

On August 26, 2014, the Center filed a nationwide class action lawsuit in United States District Court in Connecticut. The named plaintiffs, from Connecticut, New York and Ohio, all waited longer than the statutory 90-day limit for a decision on their Medicare appeals. On January 29, 2015, defendant’s motion to dismiss was denied.  On June 10, 2015, the court granted the plaintiffs’ motion for certification of nationwide class of Medicare beneficiaries who have been or will be waiting more than 90 days for a decision on their timely-filed request for an ALJ hearing. The parties also conducted discovery. In March 2016 the court preliminarily approved a settlement and notice to the class was posted.

A Fairness Hearing was held on August 1, 2016 and the Court granted final approval of the settlement agreement. The settlement calls for the Office of Medicare Hearings and Appeals (OMHA) to continue its policy of providing beneficiary appellants with priority over other appellants in receiving ALJ decisions, to designate a Headquarters Division Director to oversee inquiries about appeals initiated by beneficiary appellants, and to address any complaints or questions concerning the processing of those appeals. OMHA will also introduce a new, more user-friendly ALJ hearing request form that allows beneficiaries to self-identify, and will also publish data about the length of processing time for beneficiary appeals.

On September 1, 2016 as part of the settlement, OMHA established a toll-free Beneficiary Help Line: (844) 419-3358.  This line, which is staffed by representatives of OMHA, will address inquiries about ALJ appeals being pursued by Medicare beneficiaries. The Center urges anyone pursuing a beneficiary appeal who believes the appeal is not receiving timely attention to call the Beneficiary Help Line. The expectation is that a call to this line will help resolve delays in cases that are eligible to be prioritized. The Beneficiary Help Line is staffed from 8:00 a.m. to 4:30 p.m., Eastern Time. If calling at other times or if the OMHA Beneficiary Help Line staff are assisting other callers, OMHA instructs callers to leave a voicemail. Please report your experiences using the Help Line to the Center at: abers@medicareadvocacy.org.

As of November 1, 2016 CMS updated scripts for 1-800-Medicare to highlight the OMHA beneficiary prioritization policy for beneficiary callers and to refer them to the toll-free OMHA Beneficiary Help Line if they have questions about filing appeals with OMHA or about ALJ appeals that are pending with OMHA. OMHA also posted the beneficiary appeals data required by the settlement on their website at http://www.hhs.gov/about/agencies/omha/about/current-workload/beneficiary-appeals-data/index.html. The data shows beneficiary appeals now being processed within or very close to the 90-day statutory time period.

In late January 2017 the Office of Medicare Hearings and Appeals issued a new ALJ request form, the OMHA-100, which is a unified request for hearing and review and can be used for all appeals to OMHA.  As part of the settlement, the form allows beneficiaries and enrollees to self-identify, making it easier for these claims to be classified as beneficiary appeals and given priority for processing. CMS has also issued instructions t

appeal contractors that deal with reconsiderations (the level below ALJ hearings) the begin using revised appeal instructions that include plain-language instructions about OMHA’s beneficiary mail-stop as well as information on the beneficiary help-line that has been established at OMHA.  The OMHA-100 is available at: https://www.hhs.gov/sites/default/files/OMHA-100.pdf

 

  • Ryan v. Price, No. 5:14-cv-269 (D. Vt.) (Prior Favorable Homebound Determination) On December 19, 2014, the Center for Medicare Advocacy and Vermont Legal Aid filed a class action lawsuit against Sylvia Mathews Burwell, the Secretary of Health and Human Services, to stop Medicare’s practice of repeatedly denying coverage for home health services for beneficiaries on the basis that they are allegedly not homebound, when Medicare has previously determined them to be homebound. (Ryan v. Burwell). The lawsuit was filed in the United States District Court in Burlington, Vermont on behalf of two Vermont residents, Marcy Ryan and John Herbert, as a regional class action lawsuit covering New England and New York.

On March 25, 2015, the government filed a motion to dismiss on the grounds that plaintiffs lack standing, that the court lacks subject matter jurisdiction, and that plaintiffs have failed to state claim on which relief may be granted.  On July 27, 2015, the court denied the government’s motion to dismiss, finding four separate grounds on which the dually eligible plaintiffs have standing. The court also found that it had subject matter jurisdiction and that plaintiffs had stated a claim on which relief could be granted.

On December 2, 2015, the court granted plaintiffs’ motion for class certification and, at request of the plaintiffs, issued clarification on the class definition on February 23, 2016.  The regional class is defined as all beneficiaries of Medicare Part A or B in Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont (Medicare Administrative Contractor Jurisdiction K): (a) who have received a “favorable final appellate decision” that he or she was “confined to the home,” i.e. homebound, in the appeal of a home health nursing or therapy claim denial; (b) who have subsequently been denied, or will be denied, coverage for additional service on the basis of not being homebound, on or after January 1, 2010; (c) who had a non-lapsed, viable appeal of the subsequent denial for coverage of additional home health services as of March 5, 2015, or had a particularized individual basis for tolling of any applicable appeal deadline; and (d) for whom the claim for Medicare home health coverage was filed on or before August 2, 2015.

Written discovery was served. The government filed a motion for summary judgment in November 2016 and plaintiffs filed a cross motion and responded in December.  However, the parties then entered settlement talks and postponed further briefing while those negotiations proceeded.

On October 11, 2017, the parties filed a joint motion for preliminary approval of a proposed settlement agreement and notice to the class, which the court approved on October 27, 2017. Notice to the class was posted and is available here. The notice explains that The proposed settlement applies to Medicare beneficiaries in the northeast United States whose appeals for coverage of home health services were denied between January 1, 2010 and March 5, 2015 on the basis of not being homebound, and who had previously received a favorable appeal decision determining that they were homebound. More details on the class definition can be found in the notice to class members. The agreement will allow class members to have their eligible claims for home health services reviewed under the Prior Favorable Homebound provision, which directed that when a beneficiary had previously been found to be homebound in a Medicare appeal, that conclusion should be given “great weight” in any subsequent appeal for home health services, provided there had not been a significant change in the beneficiary’s condition.

A final fairness hearing was held at the court in Rutland, Vermont on January 11, 2018. No objections were received, and the court granted final approval of the settlement. CMS will be publishing on their website an application process for eligible class members to have their claims re-reviewed under the correct standard. Eligible class members will be required to identify themselves and their eligible claim to CMS no later than one year after the settlement application process is published. The settlement, available here, contains details on which beneficiaries are eligible for re-review and the procedural requirements.

CMS has published the application process on its website. Eligible class members must identify themselves and their eligible claims to the CMS by completing and submitting the “Ryan Re-Review Form,” along with any supporting documentation, no later than August 1, 2019.  The form provides information to assist in determining whether the beneficiary’s claims qualify for re-review under the settlement (for example, the home health services have to have been received on or before August 2, 2015, and denied on or after January 1, 2010). The re-review form and other important information about the settlement are published on CMS’s website here. Please contact Vermont Legal Aid or the Center for Medicare Advocacy with questions about the settlement.

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[1] https://www.federalregister.gov/documents/2019/04/22/2019-08031/medicare-program-update-to-the-required-prior-authorization-list-of-durable-medical-equipment
[2] https://www.federalregister.gov/documents/2019/04/22/2019-08032/medicare-program-prior-authorization-process-for-certain-durable-medical-equipment-prosthetics
[3] 42 U.S.C. § 1395i–3.
[4] Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Final Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program, 83 Fed. Reg. 39162, 39183-39265 (Aug. 8, 2018). Available at https://www.govinfo.gov/content/pkg/FR-2018-08-08/pdf/2018-16570.pdf.
[5] Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year 2020, 84 Fed. Reg. 17620, 17633 (Apr. 25, 2019) (citing 83 Fed. Reg. 39162, 39183-39265). Available at https://www.govinfo.gov/content/pkg/FR-2019-04-25/pdf/2019-08108.pdf.
[6] Id. at 17634.
[7] Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2012, 76 Fed. Reg. 48486, 48511 (Aug. 8, 2011). Available at https://www.govinfo.gov/content/pkg/FR-2011-08-08/pdf/2011-19544.pdf.
[8] Id. at 48512.
[9] Id. at 48511.
[10] Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year 2020, 84 Fed. Reg. at 17633.
[11] Id. at 17634.
[12] Id. at 17624.
[13] Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Final Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program, 83 Fed. Reg. 39162, 39238 (Aug. 8, 2018). Available at https://www.govinfo.gov/content/pkg/FR-2018-08-08/pdf/2018-16570.pdf.
[14] Id.
[15] Id.
[16] Id.
[17] See id. at 39243 (“[W]e are finalizing our proposal . . . to implement a non-fatal warning edit on the validation report upon submission when the amount of group and concurrent therapy exceeds 25 percent within a given therapy discipline, which would alert the provider to the fact that the therapy provided to that resident exceeded the threshold.”).
[18] See Fact Sheet: Concurrent and Group Therapy Limit, CMS, available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/PDPM_Fact_Sheet_Template_CGLimit_Final.pdf (last visited Apr. 24, 2019) (noting that “CMS will also monitor therapy provision under PDPM to identify facilities that exceed the limit, in order to determine if additional administrative or policy action would be necessary”).
[19] Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Final Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program, 83 Fed. Reg. at 39238.
[20] Id.
[21] See Id. at 39238 (“We explained that because the proposed PDPM would not use the minutes of therapy provided to a resident to classify the resident for payment purposes, we would need to determine a way under the proposed PDPM to address situations in which facilities exceed the combined 25 percent group and concurrent therapy limit.”).
[22] Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (SNF) Final Rule for FY 2019, SNF Value-Based Purchasing Program, and SNF Quality Reporting Program, 83 Fed. Reg. at 39239.
[23] Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Updates to the Quality Reporting Program and Value-Based Purchasing Program for Federal Fiscal Year 2020, 84 Fed. Reg. at 17634.
[24] Id.
[25] Id.
[26] Inpatient Hospital Services Covered Under Part A, MBPM, CMS, available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c01.pdf (last visited Apr. 25, 2019).
[27] See id. (stating that, in some cases, patients are allowed to receive “at least 15 hours of intensive rehabilitation therapy within a 7 consecutive day period”).
[28] Coverage of Extended Care (SNF) Services Under Hospital Insurance, MBPM, CMS, available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c08.pdf (last visited Apr. 25, 2019).
[29] No. 5:11-cv-17 (D. VT 2013).
[30] Coverage of Extended Care (SNF) Services Under Hospital Insurance, MBPM, CMS.
[31] Coverage of Extended Care (SNF) Services Under Hospital Insurance, MBPM, CMS.
[32] See, e.g., Ying Zian et al., Unexplained Variation for Hospitals’ Use of Inpatient Rehabilitation and Skilled Nursing Facilities After an Acute Ischemic Stroke, 84 Stroke 2836, (finding that “patients were less likely to receive care at an IRF if they were older, women, had a longer length of stay at the index hospitalization, or had comorbidities, such as prior stroke or transient ischemic attack, dementia and delirium, and hospitalization or SNF use, before the index stroke”).

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