Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

Issue Brief – September 2018 – CMA Special Report on Part D Changes, and Other Issues

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Disclaimer: the views expressed in this Issue Brief and during the Alliance call are solely those of the Center for Medicare Advocacy.

  1. RECENT CHANGES IN LAW, REGULATIONS AND GUIDANCE RELATING TO MEDICARE ADVANTAGE AND PART D

CMA Special Report (September 2018): https://www.medicareadvocacy.org/special-report-recent-changes-in-law-regulations-and-guidance-relating-to-medicare-advantage-and-the-prescription-drug-benefit-program/

Overview

The first half of 2018 has seen a number of changes in law, regulations and sub-regulatory guidance that impact the Medicare program, particularly Part C governing private Medicare plans, known as Medicare Advantage (MA), and Part D, the prescription drug benefit.  This report focuses on a number of changes to Parts C and D, with a particular focus on the impact to Medicare beneficiaries, pursuant to the Bipartisan Budget Act of 2018 (BBA), a final rule issued on Parts C and D (CMS-4182-F), and the Final Call Letter for 2019. 

While the BBA makes a number of significant changes to Medicare beyond Parts C and D, those changes are not generally discussed in the report. Instead, the report highlights many of the changes to MA and Part D focusing on issues most relevant to Medicare beneficiaries and those supporting or assisting them.  Part I of the report provides a summary of these changes, along with relevant citations, and is organized by changes to MA, Part D and changes that impact both programs.  Part II of the report considers the potential impact of some of these changes, particularly with respect to MA benefits, consumer decision-making and informed choice, and the impact of the changes on the traditional Medicare program.

Summary of Changes

During our May 2018 Alliance call, we highlighted some of these changes: https://www.medicareadvocacy.org/may-2018-recent-policy-changes-relating-to-medicare-advantage-other-issues/, including the following:

  • Medicare Advantage (MA) Uniformity Flexibility – Previously, the Medicare Advantage uniformity standard outlined at 42 CFR sec 422.100(d) was interpreted to mean that plan sponsors had to offer all enrollees in a plan in a given service area access to the same benefits at the same level of cost-sharing.  CMS is reinterpreting this uniformity requirement to allow plans to “reduce cost-sharing for certain covered benefits, offer lower deductibles for enrollees that meet specific medical criteria, provided that similarly situated enrollees (that is, all enrollees who meet the medical criteria identified by the MA plan for the benefits) are treated the same.  In addition, there must be a nexus between the health status or disease state and the specific benefit package designed for enrollees meeting that health status or disease state.” 83 Fed Reg 16480.  In other words, starting in 2019, MA plans can offer targeted benefits and/or reduced cost-sharing, at their discretion, based upon enrollees’ particular health condition(s).  Targeted supplemental benefits include the new, expanded interpretation of supplemental benefits discussed below.
  • Expanding Health-Related Supplemental Benefits – Under current MA rules, a plan sponsor can offer supplemental benefits defined as “an item or service not covered by original Medicare, that is primarily health related and for which the MA plan must incur a non-zero direct medical cost.” In the Final 2019 Call Letter, CMS states that is “expanding the scope of the primarily health related supplemental benefit standard.”  Whether a service or item is “primarily health related” will be determined under a three-part test for supplemental health care benefits:  it must diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization. (p. 208).  CMS adds: “Supplemental benefits under this broader interpretation must be medically appropriate and recommended by a licensed provider as part of a care plan if not directly provided by one; supplemental benefits do not include items or services solely to induce enrollment.” (p. 208)
    • Balanced Budget Act (BBA) of 2018 – supplemental benefits for the chronically ill – provides for a new type of supplemental benefit starting in 2020; according to CMS, these BBA benefits are qualitatively different than those that will be available in 2019 because they are only for those who are chronically ill, and can be provided only if there is a reasonable expectation of improving or maintaining health/function (can be tailored to individual enrollee’s specific conditions and needs, rather than a group of similarly situated enrollees with the same health condition(s)); in addition, the BBA benefits will not be limited to the primarily health related standard, so it will be possible “to address issues beyond a specific medical condition, such as social supports” but the basis for offering such benefits will be based solely on an enrollees’ qualification as “chronically ill” and “may not be based on conditions unrelated to medical conditions, such as living situation and income” – see discussion at 83 Fed Reg 16481-3.
    • 3 Types of Supplemental Benefits – in the preamble to the final rule, CMS explains the differed forms of supplemental benefits, which plans will have to explain in Evidence of Coverage documents (83 Fed Reg 16482):
      • “Standard” – offered to all enrollees (available now, as discussed above);
      • “Targeted” – offered to qualifying enrollees by health status or disease state (staring in the 2019 plan year, as discussed in this section);
      • “Chronic” – to chronically ill, pursuant to the Bipartisan Budget Act of 2018 (BBA) (starting in 2020); not limited to being primarily health related; possible to go beyond a specific medical condition, such as social supports.
  • “Meaningful difference” requirement eliminated – previously, MA plan sponsors offering more than one plan in a given service area had ensure the plan benefit packages were substantially different from one another with respect to key plan characteristics such premiums, cost sharing or benefits offered.  The rationale for this rule, as noted by CMS in the draft 2019 Call Letter, was “so that beneficiaries can easily identify the differences between those plans in order to determine which plan provides the highest value at the lowest cost to address their needs.” Despite this rationale, CMS is eliminating this requirement by amending 42 CFR §§422.254 and .256, in part, because it “is concerned the current requirement may result in organizations reducing the value of certain benefit offerings in order to make their benefit packages comply with these unnecessary limits.”
  • MA OEP – Restoration of the Medicare Advantage Open Enrollment Period (§§ 422.60, 422.62, 422.68, 423.38 and 423.40)   CMS proposed regulatory changes to implement the “new” Open Enrollment Period (OEP) required by the 21st Century Cures Act, which replaces the Medicare Advantage Disenrollment Period (MADP) required by the Affordable Care Act.  Effective 2019, for the first 3 months of the calendar year, there will be a continuous open enrollment and disenrollment period for those individuals enrolled in an MA plan. 

Unlike the “old OEP” which was in effect from 2007 to 2010, the “new OEP” permits changes to Part D coverage for those who, prior to the change in election during the new OEP, were enrolled in an MA plan.  Therefore, during this 3-month period an MA eligible beneficiary can make a one-time change as follows: individual enrolled in an MA-PD plan may use the new OEP to switch to: (1) Another MA-PD plan; (2) an MA-only plan; or (3) Original Medicare with or without a PDP.  The new OEP would also allow an individual enrolled in an MA-only plan to switch to: (1) another MA-only plan; (2) an MA-PD plan; or (3) Original Medicare with or without a PDP.  Also unsolicited marketing is prohibited by statute during this period.

  • Timing and Electronic Delivery of Certain Beneficiary Documents – Annual Notice of Change (ANOC) must be delivered 15 days before first day of the Annual Coordinated Election Period (ACEP) (10/1), whereas Evidence of Coverage (EOC) must by delivered by first day of ACEP (10/15).
    • MA and Part D sponsors can now provide certain materials, such as the EOC, electronically, with provision of hard copy upon request.
  • Limitation to the Part D Special Enrollment Period for Dual and Other LIS-Eligible Beneficiaries – Special Election Period (SEP) for dual-eligible and LIS beneficiaries revised from an open-ended monthly SEP to one that may be used only once per calendar quarter during the first nine months of the year (January through September).  Separate SEPs can be used in the following circumstances: (1) within a certain period of time after a CMS or state-initiated enrollment; and (2) within a certain period of time after a change to an individual’s LIS or Medicaid status.  42 CFR sec 423.38(c).

Discussion

Congress and CMS have created significant changes to private Medicare health and prescription drug plans, particularly concerning Medicare Advantage (MA).  Much of stakeholders’ attention has been focused on the new flexibilities granted to MA plans, namely the new targeted and supplemental benefits. The changes certainly have the potential to enhance some people’s lives by providing access to items/services they wouldn’t otherwise be able to obtain.  However, the rationale for expanding coverage in MA – enhancing quality of life, health outcomes – applies equally to those in traditional Medicare.  Yet these same changes and flexibilities have not been incorporated into the traditional Medicare program.  Another concern is how these changes will affect informed choice and consumer decision-making. Elimination of the meaningful difference standard, loosening of uniformity requirements, redefining of supplemental benefits and other changes could dramatically increase the range of benefits and could make informed decision-making much more difficult. 

Tipping the Scales Towards Medicare Advantage

As the Center noted in a March 2018 CMA Alert, recent changes in law, regulation and sub-regulatory guidance combine to tip the scales in favor of Medicare Advantage v. traditional Medicare.  For example,  MACRA (2015) will prohibit people eligible for Medicare on or after January 1, 2020 from purchasing a Medigap policy that covers the Part B deductible (sometimes referred to as policies that offer “first dollar coverage”); CURES Act (2016) implemented a new MA-Open Enrollment Period (discussed above) that can only be utilized by those enrolled in an MA plan and expanded MA access to people with End Stage Renal Disease (ESRD) while failing to extend Medigap rights to the same population;  and, as described above, the Bipartisan Budget Act (BBA) of 2018 expands supplemental benefits in MA to individuals with chronic conditions, but not in traditional Medicare. 

Administrative actions have also tipped the scales, including the new flexibilities allowed for MA benefits described in this report.  In the current climate of “deregulation” a number of policies are being implemented that favor MA plan sponsor “flexibility” in a way that that those in traditional Medicare will not benefit from.   

In addition to new rules and regulations issued by the Administration, over the last year CMS has engaged in explicit bias, or steering towards MA plans.  Documents issued by CMS last Fall and so far in 2018 over-emphasize the benefits of enrolling in an MA plan and minimize the drawbacks, leaving readers with a misleading overview of the MA program.

As noted in an October 2017 CMA Alert, official CMS Medicare Open Enrollment materials for 2018 – issued in Fall 2017 – encouraged beneficiaries to choose a private Medicare Advantage plan over original Medicare. On November 9, 2017, the Leadership Council of Aging Organizations (LCAO), a member coalition of national non-profit organizations serving older Americans, sent a letter about this issue to CMS and committees of jurisdiction in Congress. The organizations listed in the LCAO letter wrote to express concerns that during the last Medicare open election period, CMS encouraged entities that assist Medicare beneficiaries with enrollment choices to disseminate information that was incomplete and biased towards Medicare Advantage (MA) and often failed to even mention traditional Medicare. The organizations urged CMS to take immediate corrective action to include and accurately portray the benefits and drawbacks of all coverage options in CMS materials.

Instead of heeding such concerns, CMS made such bias towards MA even more pronounced in the draft 2019 Medicare & You Handbook.  For example, the draft Handbook: suggests that MA is the less expensive alternative for beneficiaries; fails to highlight the clear distinction between traditional Medicare and MA –  Traditional Medicare provides access to all Medicare participating providers nationwide, while MA limits access to a set network of providers in a specific geographic area; and characterizes prior authorization requirements in MA plans, which are restrictions on access to services, as a benefit, rather than what they are: Mandatory hurdles for MA members not required for individuals in traditional Medicare.  The Center joined Justice in Aging and the Medicare Rights Center in conveying to CMS that rather than presenting information in an objective and unbiased way, the draft 2019 Medicare & You Handbook’s information about traditional Medicare and Medicare Advantage (MA) distorts and mischaracterizes facts in serious ways.

Impact on Consumer Decision-Making

A beneficiary’s ability to make an informed decision about one’s health care has been complicated by the recent changes mentioned above.  On the one hand, CMS’ elimination of the meaningful difference requirement for MA plans could make it harder to distinguish between plans offered by the same plan sponsor in a given service area.  On the other hand, the reinterpretation of the uniformity requirements could significantly increase the variation between plans, including which enrollees within a given plan are entitled to what benefit.  

Information about these new benefits has – as of the date of publication of this report – been lacking.  The CMS Model documents, from which health plans create their individual Annual Notices of Change (ANOCs), Evidence of Coverage (EOC) documents, among others, make minimal reference to the new MA flexibilities.

In the final rule describing these MA changes, CMS states that “supplemental benefits do not include items or services solely to induce enrollment.”  Most surprisingly, CMS’ 2019 marketing guidelines, renamed Communications & Marketing Guidelines, make no mention of new MA flexibilities.  There is no guidance to plans about how such benefits can be described, nor are there any rules for agents and brokers concerning how such benefits will be marketed.

Without more guidance from CMS, there is much uncertainty about how the new benefits will be marketed.  Questions remain, including:

  • How will one compare all the variations on the Medicare Plan Finder (e.g., Will the new targeted benefits be searchable by health condition? Will estimated costs reflect cost-sharing reductions?)
  • Will an individual’s health condition drive communications and marketing, leading to risk selection, steering, etc.?
  • In an era of deregulation and reducing plan burden, can we expect regulators to engage in the extra oversight/analysis that is seemingly required?
  1. PROPOSED RULES

Durable Medical Equipment

The Center for Medicare Advocacy (the Center) submitted comments to the Centers for Medicare and Medicaid Services (CMS) on proposed rules affecting durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The Center requested that CMS:

  • Seek to maximize beneficiary access to DMEPOS;
  • Clarify supplier responsibilities to provide beneficiaries with appropriate products and timely services;
  • Develop appropriate enforcement mechanisms to ensure suppliers are following regulations and policies in order to protect both beneficiaries and the Medicare program;
  • Properly communicate to suppliers that the proposed payment strategy, Lead Item Pricing, will be monitored to prevent adaptive profit-making that would result in reduced access to equipment or supplies; and
  • Define “Value” in DMEPOS supplier contracts as a multi-faceted CMS commitment that is grounded in more than short-term financial results and also includes effective/quality products, responsive service, follow-up, long-term results and long-term cost savings.

See our full comments at: https://www.medicareadvocacy.org/center-comments-on-proposed-dmepos-rules/.

Home Health

The Center submitted comments to CMS about the devastating impact a proposed rule will have on access to Medicare home health care for vulnerable older and disabled people.

The proposed rule purports “to better align payment with patient care needs and better ensure that clinically complex and ill beneficiaries have adequate access to home health care.” (See pages 32380-32381). However, the rule provides significant incentives for home health agencies to serve post-acute care patients for brief periods of time. In turn, the proposed Medicare payment model will further diminish access to care, particularly for people with complex, longer-term and chronic conditions – people who are already often unable to access the care they need. Simply put, the Patient Driven Groupings Model (PDGM) is not guided by the needs of patients. It will exacerbate an existing crisis in access to home health care for people most in need.

Read our full comments: https://www.medicareadvocacy.org/center-comments-on-proposed-medicare-home-health-rules/.

Reminder:  Home health coverage infographic: https://www.medicareadvocacy.org/wp-content/uploads/2018/04/Home-Healthcare-Infographic-r4-18-0404.pdf.

  1. AFFORDABLE CARE ACT (ACA) SABOTAGE UPDATE

Short-Term Limited-Duration Insurance

The U.S. Department of Health and Human Services (HHS) released the final rule expanding the use of Short-Term Limited-Duration Insurance. For months, we have been highlighting how these “Junk Plans” would adversely impact both the Affordable Care Act (ACA) Marketplace and consumers with complex care needs. Short-term insurance is meant to be a stopgap for consumers who experience a temporary lapse in coverage. These bare bones plans were never intended to be used as long-term or comprehensive health insurance. Use of these plans had been appropriately limited to 90 days, but the current administration’s final rule expands their use up to a year, with the possibility of renewal for up to three years.

Because the plans are not “equivalent coverage” they are not required to abide by coverage standards set forth in the Affordable Care Act, and will not protect consumers who find themselves in need of comprehensive care. In addition, the plans are not required to cover essential health benefits, can deny coverage based on health status, gender or age, and can impose annual or lifetime limits on coverage.  And, although they offer inadequate coverage, the plans have high out-of-pocket costs.

As younger and healthier people are drawn to these short-term plans, older people and people who are sicker will face higher costs for remaining in the ACA Marketplace. Thus, the “Junk Plans” will undermine their benefits, destabilize the Marketplace and further inflate costs.    

Ensuring Coverage for Patients with Pre-Existing Conditions Act.  

This bill introduced by Sen. Thom Tillis (R-NC), would amend the Health Insurance Portability and Accountability Act to supposedly guarantee the availability of health coverage. The sponsors of the legislation claim that the bill protects people with pre-existing health conditions by prohibiting discrimination based on health status. This protection would purportedly be guaranteed even if the ACA repeal lawsuit led by Texas is successful.

This bill’s guaranteed issue and protection for people with pre-existing conditions only sounds good until the details are considered. Under the proposed legislation, it is true that people with pre-existing conditions may be able to buy a plan. However, insurers would not be obligated to actually cover treatment costs associated with their health condition. Obtaining and paying for insurance wouldn’t actually mean receiving coverage.

GAO Report Critical of HHS ACA Open Enrollment Actions

The Government Accountability Office (GAO), issued a report highlighting the unfortunate way HHS handled ACA open enrollment. GAO found that HHS did not develop enrollment goals for 2018, the funding process used for Navigators was based on unreliable data, and that refusal to pay cost-sharing reductions drove up premiums in silver plans. The report also highlighted that some stakeholders interviewed by GAO agreed that consumer confusion created by the Administration’s lack of support likely detracted from enrollment.

Association Health Plans

Thanks to a final rule issued by the Administration, Association Health Plans (AHPs) will be available starting this month. Expanding AHPs will make it easier for certain small employers to offer plans that don’t have ACA coverage protections. These inadequate plans would draw younger healthier people from the ACA Marketplace while raising costs for older people.  Consumers who choose these “junk plans” would find themselves without comprehensive coverage when they need care the most.

The Attorneys General of the states of New York, Massachusetts, California, Delaware, Kentucky, Maryland, New Jersey, Oregon, Pennsylvania, Virginia, Washington, and the District of Columbia have filed a lawsuit to roll back this regulation. The suit argues that the AHP regulation will exempt “a significant portion of the health insurance market from the Affordable Care Act’s consumer protections.” The Attorneys General also agree that issuing this regulation is part of a “continued effort to sabotage our health care system.”

Inadequate Funding for Navigators

CMS announced it was awarding significantly less funding for navigator organizations than in the past for the upcoming ACA open enrollment season. Overall, the program’s funding has been reduced from 2016’s $100 million budget to $10 million for 2018. Navigator organizations are non-profits that provide critical assistance to consumers who need help enrolling in health insurance plans. In addition to the funding cuts, the number of navigators actually receiving funding dropped from 90 to 39. These cuts are crippling, especially in light of other actions taken to undermine the health care law.

Not only has funding been slashed, navigators are also being actively encouraged to promote junk plans such as short-term limited-duration insurance and association health plans. Such plans should not be promoted to vulnerable, “left behind” populations as CMS describes in the press release announcing the awards.

  1.    LITIGATION UPDATE
  • Alexander v. Azar (formerly Bagnall v. Sebelius, Barrows v. Burwell), No. 3:11-cv-1703 (D. Conn.) (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 court also set trial to start the week of February 18, 2019.

Update: 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 argued that there are no disputed facts and that judgment should be granted as a matter of law 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) Plaintiffs filed an opposition on September 13, 2018, strongly disputing the government’s claims. The government also filed a motion to decertify the class on August  24, 2018, although the court had discouraged it. Plaintiffs will file an opposition to that motion by September 28. The court has stated that it cannot guarantee it will decide the pending motions before trial in February.

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, No. 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. The government is due to file its answer to the complaint and the administrative record by August 21, 2018, and the court has set a schedule for summary judgment briefing, to be completed by late November 2018.

Update: the government has filed its answer and the administrative record. Plaintiff will file his summary judgment motion by September 26, 2018.

 

  • 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.”

 

  • 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 to 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.

Update: 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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