Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

Issue Brief – September 2019 – Upcoming Annual Coordinated Election Period (ACEP) & 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. UPCOMING ANNUAL COORDINATED ELECTION PERIOD (ACEP)

Overview

The Annual Coordinated Election Period (ACEP) – the period during which individuals with Medicare can make coverage elections for the following year – will start October 15th and last until December 7th.  This year, there are a number of factors impacting the ACEP, including the introduction of a new Medicare Plan Finder (MPF) and changes in marketing rules (both discussed below) that are happening at the same time that there will be significant Medicare policy changes effective in 2020 that will make enrollment decisions even more challenging, including:

  • The expansion of supplemental benefits that can be provided by Medicare Advantage plans for individuals with chronic conditions;
  • A restriction on the type of Medigap policies that can be sold to individuals who are eligible for Medicare on or after January 1, 2020; and
  • A significant increase in the Part D annual out-of-pocket threshold due to an expiring provision of the Affordable Care Act: CMS estimates that the total spending (both plan and beneficiary) needed to reach catastrophic coverage will increase from $8,139.54 (the 2019 figure) to $9,719.38 (2020), a $1,579.84 difference – see, e.g., CMS’ final 2020 Call Letter.

At the same time, CMS outreach and enrollment materials are no longer a neutral presentation of all Medicare options. As the Center has documented elsewhere, since the Fall of 2017 CMS’ outreach and enrollment materials have encouraged beneficiaries to choose a private Medicare Advantage plan over traditional Medicare, instead of objectively presenting enrollment options.  At the time of this Alliance call, it is unclear if this trend will be continued in the 2020 version of Medicare & You and CMS educational efforts.

Updated Medicare Plan Finder

On August 27, 2019, the same day that the Centers for Medicare and Medicaid Services (CMS) debuted the updated Medicare Plan Finder (MPF) tool, four beneficiary advocacy organizations – the Center for Medicare Advocacy, Justice in Aging, Medicare Rights Center, and the National Council on Aging – sent a joint letter to CMS raising concerns about the roll-out of the new MPF and revisions to the 2020 Medicare Communications and Marketing Guidance (MCMG) (discussed below). The joint letter is available here, and an accompanying press release here.

The groups urged CMS to mitigate any adverse consequences by closely monitoring the roll out and functionality of the new MPF tool, providing enrollment relief as needed, and by rescinding the updated MCMG in its entirety. These concerns, and additional ones, are outlined below.

Medicare advocates and assisters are in the process of testing the new MPF in order to learn how to use it and troubleshoot any problems prior to the upcoming Annual Coordinated Election Period (ACEP), between October 15th and December 7th, during which Medicare beneficiaries can make coverage elections effective January 1st (this period is often referred to as the Open Enrollment period).

Based upon what had been shared with stakeholders prior to the roll-out of the new MPF, several concerns were already apparent. The joint letter, referenced above, notes these concerns:

[W]e find it troubling that the new MPF’s late August release may not give third-party assisters, like State Health Insurance Assistance Programs (SHIPs), adequate time to learn the new tool before Fall Open Enrollment begins. Coupled with recent legislative and regulatory changes set to take effect this year, the truncated MPF launch timeline is likely to generate demand for enrollment assistance that these chronically underfunded programs are unable to meet.

Further, CMS has confirmed that the current “legacy” version will not be available after the end of September. Thus, apparently due, in part, to issues relating to CMS’ current contract to administer the MPF, there will be no back-up available for this enrollment period. As noted in the joint letter, “We are disappointed that CMS failed to anticipate the potential need for more extended redundancy or back-up systems when launching a new site architecture that so many people rely on for critical coverage decisions.”

Even without a full assessment of the new MPF’s functionality and substantive content, it is clear that the manner in which it has been introduced will create challenges for SHIPs. For example, in a letter sent to CMS just prior to the introduction of the new MPF, California Health Advocates (CHA), a non-profit organization that supports the SHIP in California, known as Health Insurance and Advocacy Programs (HICAPs), raised concerns about privacy issues, changes in the way searches of information will be stored, extra time that will be required of SHIP counselors and the resulting impact on their ability to serve as many people as possible, among other issues.

The joint letter expands on these concerns:

As a result of the later-than-expected roll out, opportunities for valuable counselor learning and feedback have been lost. Pushing SHIP and other counselor training into the busy weeks between now and Fall Open Enrollment may also mean that difficult choices will have to be made regarding counselor education, such as whether to prioritize their proficiency with the tool or their understanding of substantive Medicare policy changes that will take effect in 2020 and dramatically impact beneficiary choices this fall.

As noted in the letter, the four organizations urged CMS to monitor the roll-out of the new MPF and, if complications arise, provide enrollment relief that may be needed to address beneficiaries who are negatively impacted.

Revised Marketing Guidelines

In addition to concerns about the new MPF, the joint letter objected to both the process for revising and content of the 2020 Medicare Communications and Marketing Guidelines (MCMG), a set of rules that govern the selling and promotion of Medicare Advantage and Medicare Prescription Drug plans.

Procedurally, CMS departed from its longstanding practice of releasing an updated, final version for the coming year and instead issued a memo to plans that lists changes from the 2019 guidance and tells plans that for 2020, they should rely on the 2019 guidance as amended by the memo. Of even greater concern, the final guidance veers significantly from the earlier 2020 draft.

Perhaps most alarmingly, the revised guidelines weaken the distinction between “marketing” events, which are designed to steer or attempt to steer potential enrollees, or the retention of current enrollees, toward a plan or limited set of plans; and “educational” events, which are designed to inform beneficiaries about MA, Part D or other Medicare programs. As noted in the letter, these changes appear to directly conflict with current law by allowing educational events (which have fewer restrictions and no reporting requirements to CMS) to immediately turn into marketing events.

Other revisions to the MCMG highlighted in the letter include the removal of a short Non-English translation disclaimer previously required of plans alerting Spanish speakers of the availability of translations of certain important plan communications. Further, the revision failed to include provisions outlined in the draft 2020 version that would have limited the aggressive marketing of plans referred to as D-SNP look-alikes – a problem CMS has itself identified as a significant problem, yet abandoned in the guidelines.

Other revisions to the MCMG, not discussed in the joint letter, seemed designed to ease any burden on plans and downstream entities, with little to no benefit or protection for consumers. In some cases, the changes appear to actively weaken protections.

  • For more information, see the Center’s Alert “Advocates Issue Joint Letter Raising Alarms about New Medicare Plan Finder and Revisions to MA and Part D Marketing Guidelines” (Aug. 29, 2019).

2. NURSING HOME UPDATES

The following is a joint statement from the Center for Medicare Advocacy and the Long Term Care Community Coalition available at: https://www.medicareadvocacy.org/nursing-home-deregulation-continues-despite-substantial-risk-to-residents/.

Nursing Home Deregulation Continues, Despite Substantial Risk to Residents

Background

Under the Trump Administration, the Centers for Medicare & Medicaid Services (CMS) has been advancing efforts to deregulate the nursing home industry by rolling back the rights and protections of nursing home residents. These efforts include reducing accountability for substandard care, such as by shifting the default financial penalty for the most serious health violations from a daily fine for every day of noncompliance to just a single fine, no matter how long the violation persists. Unfortunately, CMS has now followed up such damaging efforts by issuing a proposed rule rolling back the nursing home Requirements of Participation, proposing to reduce survey frequency for so-called “top-performing” facilities, and reversing the ban on pre-dispute arbitration agreements. This alert provides information on some of the key areas of concern for residents and families.

Requirements of Participation

In 2016, for the first time in 25 years, CMS revised the federal minimum standards of care for nursing homes, known as the Requirements of Participation, “in an effort to improve the quality of life, care, and services in LTC facilities, optimize resident safety, reflect current professional standards, and improve the logical flow of the regulations.” However, soon after the 2016 elections, the leading nursing home industry association sent a letter to then President-Elect Donald Trump urging his Administration to implement “burden” reduction for providers. CMS responded to this request in July 2019 by issuing a notice of proposed rulemaking to roll back the Requirements. While the 32-page proposal references so-called provider burdens 102 times, CMS made little effort to meaningfully explain how the changes would improve resident health, safety, or welfare.

Proposed Changes

The proposed rule rolls back Requirements dealing with critical health care standards and residents’ rights. The far-reaching proposal would reduce standards for infection control, behavioral health services, facility assessments, bed rail safety, food and nutrition management, as well as transfers and discharges, to name a few.

While CMS claims that these proposals will not harm residents, that claim does not hold up to even modest scrutiny. For example, important efforts to improve dementia care and reduce the widespread use of dangerous antipsychotic drugs are weakened by the proposed rule, which would make it easier to administer antipsychotic drugs to residents. Though antipsychotic drugs carry a FDA “black box” warning against use on elderly people with dementia (due to increased risks of falls, Parkinsonism, and death), too many nursing home residents are administered these drugs every day as a form of chemical restraint to sedate them for the convenience of staff.

To improve efforts to address this problem, in 2016, CMS limited the administration of these drugs PRN (pro re nata or “as needed”) to a maximum of 14 days. PRN orders for antipsychotic drugs can be extended beyond 14 days if “the attending physician or prescribing practitioner evaluates the resident for the appropriateness of that medication.” The proposed rule would reverse this protection, making it easier for nursing homes to administer antipsychotic drugs to residents by allowing facilities to extend PRN antipsychotic orders without a direct examination and assessment of the resident.

Reducing Survey Frequency

CMS’s proposed rule is only one the latest efforts under the Trump Administration to roll back the rights and protections of nursing homes residents. In a recent blog post, CMS Administrator Seema Verma also indicated that CMS is interested in reducing the frequency of standard nursing home surveys (health inspections) for so-called “top performing” facilities. The proposal would allow such facilities to be inspected every 30 to 36 months instead of every year, as is currently required under the law. Unfortunately, CMS’s proposal seems to disregard numerous reports indicating that even high-rated nursing homes have serious health violations. For instance, a recent federal report suggests that more than 1 in 5 nursing homes that CMS considers “above average” and “much above average” have been cited for abuse in a single year.

Pre-Dispute Arbitration

CMS recently issued a final rule allowing nursing homes to include pre-dispute arbitration clauses in residency contracts. When a resident or representative signs such a clause, they are agreeing to settle future disputes outside of court for any type of abuse or neglect, no matter how heinous or harmful. While facilities cannot require residents to enter a pre-dispute arbitration agreement as a condition of admission or continued care, given the stress associated with admission to a facility, it is unlikely that people will know that they can reject such a provision and, even if they do, they may feel too intimidated by the setting to say so. From our perspective, this rule robs residents and their families of a right long considered essential. In addition, by sheltering nursing homes from legal accountability for abuse and neglect, it is likely to exacerbate problems with substandard care.

Take Action

Given that about half of all seniors will need nursing home care at some point in their lives, it is incumbent upon every family in the United States to speak out in support of nursing home quality and safety. Please take a moment to speak out in support of nursing home residents and help us make a difference by contacting your legislators today.

3. HOME HEALTH  UPDATE

Proposed Rule Raises Concerns for Access to Care

The Center for Medicare Advocacy is concerned that proposed home health rules will further steer home health agencies away from providing care for beneficiaries who need it the most and toward beneficiaries with short-term post-acute care needs.

  • Beginning in 2020, payments to home health agencies under the new model will provide higher payments for individuals who are admitted to home care after an inpatient hospital or skilled nursing facility (SNF) stay and lower payments for those who start home health from the community – which will include hospital patients in Observation Status. This will likely diminish access to care for many beneficiaries and reduce the care provided to others.
  • Fewer therapy visits will be provided to beneficiaries because therapy service utilization thresholds will be removed under the new payment model. More than 42% of for-profit home health agencies expect therapy to decrease by more than 10%. (See, e.g., NAHC presentation).
  • As in other care settings, therapy provided by therapist assistants will be coverable for home care beneficiaries who need maintenance therapy as well as for those who can improve. However, CMS should clarify that therapy for maintenance and improvement must be equally available as needed from qualified therapists, not just assistants.
  • Eliminating split-percentage provider payments (partial payment at the beginning of a period of care, and remaining payment at the end), will push smaller home health agencies out of the market if, unlike large home health entities, they cannot afford to wait until after care is provided to receive payments. (Effective in 2021)
  • Publicizing “value-based” payment statistics, when that data only includes patients who improve, will broadcast skewed, inaccurate information.
  • The description of the new home health payment system, Patient Driven Groupings Model (PDGM), is misleading and inaccurate. PDGM is touted by CMS as “shifting the focus from volume of services to a more patient-driven model that relies on patient characteristics” (proposed rule, page 34602).  However, CMS gives only token weighting to patient characteristics in PDGM. For example, an agency may receive as much as 60% higher payment for a beneficiary with an “early, institutional” admission to home care than for a beneficiary who avoided hospitalization, with a “late, community” admission to home care, regardless of services needed by either beneficiary. In another example, an agency may receive as much as 25% higher payment for a beneficiary admitted to home care from an institution than for a beneficiary admitted from the community, regardless of services needed by either beneficiary.[1]  Under PDGM, payment incentives are high for agencies to serve beneficiaries with short-term post-acute needs and not to serve beneficiaries with chronic long-term needs.
  • The fixed dollar loss ratio that determines outlier case payments will be re-adjusted to maintain the 2.5% cap of all payments. Since 2010, outlier payments (for more significant levels of care) have been cut by more than a billion dollars (see OIG report, p. 7). Most of the reductions have resulted in care not being provided.
  • PDGM, the home health payment system for traditional Medicare beneficiaries will likely subsidize low Medicare Advantage (MA) plan payments since home health agencies often lose money when providing care to MA enrollees.
  • Prior authorization for home infusion therapy, or any home health service, is a duplication of physician effort (who have already determined the care is reasonable and necessary), results in delay of care, and often results in a prior denial for legitimate care.
  • PDGM will worsen concerns regarding inequities in available care. Consideration of social determinants of health will be more meaningful when CMS develops a payment system that does not discriminate on the basis of illness or injury and when CMS does not allow agencies to cherry-pick beneficiaries based on inequitable policies.

For too long home health agencies have been able to limit access to care for certain beneficiaries and provide less care than is needed and ordered by patients’ physicians. The Center for Medicare Advocacy fears this situation will only get worse under the proposed rules.  We will be commenting accordingly and encourage others to do so.

Bill Addressing Home Health Payment Includes Provision Favoring Medicare Advantage

As noted above, the Center has many concerns about the PDGM payment model taking effect in January 2020.  A bill pending in Congress, the Home Health Payment Innovation Act of 2019 (H.R. 2573/S. 433), would make changes to the implementation of this payment model.  Unrelated to the payment model, however, Section 2 of the bill would expand the waiver of the “confined to home” (or homebound) requirement of the home health benefit to Medicare Advantage plans and certain Accountable Care Organizations (ACOs).

If this provision were enacted, it would continue the progression of legislation and policy changes that favor Medicare Advantage while neglecting the majority of beneficiaries who choose to remain in traditional Medicare. One of the core considerations of the Center’s Medicare Platform is the need to preserve and expand consumer protections and quality coverage for all Medicare Beneficiaries – including parity between traditional Medicare and private Medicare Advantage (MA) plans.

4. JIMMO UPDATE/CONCERNS

With support from the John A. Hartford Foundation, the Center drafted and disseminated a Jimmo Issue Brief in July 2019 to provide Medicare stakeholders with an overview of the Jimmo Settlement, what it means in different care settings, some of the Center’s key implementation work, and links and references to helpful resource materials. The issue brief is available here.

Also with support from the Foundation, the Center has developed Checklists to help Medicare beneficiaries and their families respond to unfair Medicare denials based on an erroneous “Improvement Standard.”

5. LITIGATION UPDATE

Affordable Care Act (ACA) Case

Oral argument in Texas v. United States, No. 19-10011, the lawsuit seeking to dismantle the Affordable Care Act (ACA), was held on Tuesday July 9, 2019 in the Fifth Circuit Court of Appeals. At stake in this case is the health care of millions of Americans. The case will affect the entire health care system and every aspect of the ACA, not just the much-discussed pre-existing conditions. People at risk of losing protections and benefits include older Americans and Americans currently on employer insurance, not just those who rely on the Affordable Care Act exchanges for coverage.

The Center for Medicare Advocacy joined AARP and Justice in Aging in filing an amicus brief in Texas v. United States, urging the Fifth Circuit Court of Appeals to reverse the trial court’s December 2018 ruling that would nullify the entire Affordable Care Act (ACA).  See the Center’s press release dated April 1, 2019.

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

Center for Medicare Advocacy Cases

  • 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 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 had 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).

Plaintiffs then filed a renewed motion for class certification, and on July 31, 2017, the court issued a decision certifying a nationwide class of Medicare beneficiaries who have received “observation services” in a hospital since January 1, 2009, 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.

A 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.

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 the court’s own question on whether it 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.

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 that the creation of subclasses was not required. Separate counsel is not necessary 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 argued that subclasses should be created, including the appointment of separate counsel.

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. On the same day, the government also filed a motion for clarification and reconsideration of the court’s March 27 ruling. 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.) On June 4, 2019, the court issued a ruling denying the government’s motion for reconsideration, meaning the class definition remained the same. The court also declined to further detail its reasoning on the issue of a protected property interest. Additionally, the court decided that it would not subdivide the class, formally or otherwise. A joint trial memorandum was filed on July 12. The government also filed an “omnibus” motion in limine seeking to exclude some of plaintiffs’ evidence.

Update:  A pretrial conference was held on July 29, 2019, during which the government’s motion in limine was addressed.  A bench trial was then held from August 12 – 20, 2019.  The plaintiffs presented several witness who were affected by observation status (two beneficiaries, a family member of a named plaintiff, a doctor), an expert witness, and also several witnesses from the government. The government also called several witnesses from CMS as well as their own expert. The court then set a post-trial briefing schedule. Plaintiffs’ proposed findings of fact and conclusions of law are due September 19, 2109, the government’s are due October 21, and plaintiffs’ reply is due November 4. The court also issued an order containing five questions it wishes the parties to address in their post-trial briefing.

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/

  • McKee v. Azar, 2:19-cv-114-cr (D. Vt.) (coverage of home health services). On July 2, 2019, Vermont Legal Aid and the Center for Medicare Advocacy filed a lawsuit in federal court in Vermont, on behalf of a Medicare beneficiary whose was denied coverage of home health services. The beneficiary required skilled nursing visits to assess and treat her multiple serious medical conditions. The case challenges the Medicare agency’s failure to follow applicable law, including the standard clarified in the Jimmo v. Sebelius settlement, which requires the determination of whether individuals are eligible for Medicare coverage to be made on the basis of beneficiaries’ need for skilled care, not on their potential for improvement. This determination should be based on each beneficiary’s unique condition and individual needs. In this case, the plaintiff challenges the Secretary’s conclusion that her “stable” condition precludes a determination that she required skilled care and qualified for Medicare coverage of home health services. In addition, she challenges the agency’s failure to afford appropriate weight to the opinion of her treating physician about her need for skilled care.

Update: The government filed an Answer and the administrative record on September 3, 2019. The plaintiff expects to file a motion requesting reversal of the coverage decision within 60 days of that filing.

  • 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.

Update: The magistrate judge schedule oral argument on the cross-motions for summary judgment on September 25, 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/.

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[1] See PDGM, example from early admission (first 30 days) with post-institutional admission versus late admission with a community admission.

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