CENTER FOR MEDICARE ADVOCACY, INC.
Access to Medicare Benefits: What’s
Been Happening?
The Long Term Care Discussion Group
Toby S. Edelman, Senior Policy Attorney
January 23, 2014
www.medicareadvocacy.org
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
1
PRESENTATION
 Observation status
• Description of issue and background
• Bagnall v. Sebelius
• H.R.1179, S.569, Improving Access to Medicare
Coverage Act of 2013
 The Myth of Improvement
•
•
Background leading to Jimmo
Jimmo vs. Sebelius update
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
2
OBSERVATION STATUS
 Patients in observation are in a hospital bed,
receiving medical and nursing care,
diagnostic tests, treatment, medications,
food, but are called outpatients (covered by
Part B), not inpatients (covered by Part A).
 Consequence: Without 3 day qualifying
inpatient hospital stay, Medicare will not
pay for subsequent care in SNF.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
3
OBSERVATION STATUS
 Care in hospital is generally
indistinguishable for inpatients and
outpatients/observation status patients.
 Outpatients are often intermingled with
inpatients.
 Patients are often not told about their status
until discharge.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
4
FEDERAL REGULATIONS
 2005: CMS asked if observation time
should be counted towards meeting
qualifying inpatient stay, 70 Fed. Reg.
29,069, at 29,098 (May 19, 2005); CMS
said it would continue reviewing the policy,
70 Fed. Reg. 45,025, at 45,050 (Aug. 2005).
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
5
FEDERAL REGULATIONS
 2012: CMS asked for public comment on
possible changes to observation status (such
as automatic inpatient status after certain
amount of time; requiring prior
authorization; etc.), 77 Fed. Reg. 45,061, at
45155 (July 30, 2012); CMS declined to
make any changes, 77 Fed. Reg. 68,209, at
68,433 (Nov. 15, 2012).
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
6
FEDERAL REGULATIONS
 2013: Final rules for inpatient hospital
reimbursement, 78 Fed. Reg. 50,495, at
50,906-954, published Aug. 19, 2013,
effective Oct. 1, 2013, established timebased definitions of inpatient care.
•
•
2-midnight presumption (physician expectation)
2-midnight benchmark (reviewers)
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
7
FEDERAL REGULATIONS
 Temporary CMS moratorium on
enforcement of final rules.
 New rules do not change (statutory) 3midnight rule for inpatient hospital care as a
requirement for SNF coverage.
 Inpatient status does not begin until
physician order for inpatient status.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
8
FEDERAL REGULATIONS
 Final regulations (78 Fed. Reg. 50,495, at
50,918, Aug. 19, 2013) also authorize
hospitals to rebill (from Part A to Part B)
within a year of providing care (if Part A
claim is denied or on hospitals’ own
initiative).
•
Hospital refunds Part A inpatient deductible, rebills
patient for Part B co-payments and medications.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
9
BAGNALL v. SEBELIUS, No. 3:11-cv01703 (D. Conn., filed Nov. 3, 2011)
 Nationwide class action, filed on behalf of 7 (later 12)
individuals.
 Alleged that use of observation status violates the
Medicare Act, Administrative Procedures Act, Due
Process Clause.
 Sought injunctive and declaratory relief; notice and appeal
rights.
 Court dismissed complaint, Sep. 23, 2013.
 Plaintiffs filed notice of appeal.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
10
GOVERNMENT POSITION ON
OBSERVATION
 Mixed. While CMS expresses concern in rules about impact of
observation on beneficiaries, Department of Justice pursues False
Claims Act litigation against hospitals for inpatient status (e.g., DoJ
press release, intervention in 8 whistleblower cases against Health
Management Associates, Jan. 13, 2014,
http://www.justice.gov/opa/pr/2014/January/14-civ-037.html) and
Office of Inspector General, HHS, compliance reviews of hospitals
seek repayments of inpatient claims that OIG says should have been
submitted as outpatient claims (e.g., Heartland Regional Medical
Center, Dec. 2013,
http://oig.hhs.gov/oas/reports/region7/71201120.pdf).
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
11
FEDERAL LEGISLATION
 H.R.1179, S.569, “Improving Access to Medicare
Coverage Act of 2013,” count all time in hospital towards
meeting 3-day qualifying inpatient stay.
 Coalition of 20 national organizations – including
LeadingAge, American Health Care Association, AARP,
AMA, American Medical Directors Association, CMA –
supports legislation; no opposition to legislation.
 Primary Congressional concern about the bills: What is the
Congressional Budget Office score? What is the cost of
implementation?
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
12
UPDATES ON OBSERVATION
STATUS
 See CMA website,
http://www.medicareadvocacy.org/medicare
-info/observation-status/.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
13
MYTH OF IMPROVEMENT
 Pervasive belief among health care
professionals, providers, Medicare
reviewers, and contractors that Medicare
pays only if beneficiary is expected to
improve.
 Not true.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
14
CURRENT REGULATIONS FOR
SNFs
 “The restoration potential of a patient is not the
deciding factor in determining whether skilled
services are needed.” 42 C.F.R. §409.32(c).
 Medicare covers “Maintenance therapy, when the
specialized knowledge and judgment of a qualified
therapist is required to design and establish a
maintenance program . . . .” 42 C.F.R.
§409.33(c)(5).
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
15
MANUAL GUIDANCE FOR SNFs
 “When rehabilitation services are the primary
services, the key issue is whether the skills of a
therapist are needed. The deciding factor is not
the patient’s potential for recovery, but whether
the services needed require the skills of a therapist
or whether they can be provided by nonskilled
personnel.” Medicare Benefit Policy Manual,
Pub. No. 100-02, Chapter 8, §30.2.2.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
16
JIMMO v. SEBELIUS, Civ. No. 5:11-CV-17
(D. VT. 1/18/2011)





Federal class action lawsuit to eliminate Improvement Standard.
Filed Jan. 18, 2011 in federal district court in Vermont.
Settled Oct. 16, 2012.
Court approved settlement Jan. 24, 2013.
Plaintiffs: 5 individuals and 6 organizations
• Alzheimer’s Association
• National Multiple Sclerosis Society
• National Committee to Preserve Social Security & Medicare
• Paralyzed Veterans of America
• Parkinson’s Action Network
• United Cerebral Palsy
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
17
WHAT JIMMO SETTLEMENT MEANS:
NO DENIALS BASED ON
IMPROVEMENT STANDARD
 Medicare coverage is improperly denied for
skilled nursing or rehabilitation services when
the denial is based on:
• Individual’s stable or chronic condition
• No expectation of improvement in a reasonable
period of time
 Services can be skilled and covered even when:
• Individual has “plateaued”
• Services are “maintenance only”
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
18
JIMMO CLARIFIES PROPER
STANDARD
 Is a skilled health care professional (nurse
or therapist) needed to ensure that nursing
or therapy is safe and effective?
 Is a qualified nurse or therapist needed to
provide or supervise the care?
 If yes, Medicare covers care, regardless of
whether the skilled care is to improve,
maintain, or slow deterioration.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
19
INDIVIDUALIZED ASSESSMENTS
REQUIRED
 What does this individual need?
 Not, what do people with similar disease or
condition need in general?
 Not, overall rule based on diagnosis or
treatment norm
• Example:
People who can walk 50 feet without
assistance do not need physical therapy
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
20
EXAMPLES OF PROHIBITED RULES OF
THUMB
• Individual or condition is “stable” or “chronic.”
• Condition will not improve
• Lack of “restoration potential”
• Care is needed for long period of time
• Unless a legal limit: e.g., SNF, 100 days in a
benefit period
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
21
WHAT JIMMO SETTLEMENT MEANS:
REVISION OF CMS MANUALS
 CMS revised Medicare Benefit Policy Manual for SNF, home
health, outpatient therapy, and inpatient rehabilitation facility.
 CMS clarifies skilled maintenance therapy and skilled
maintenance nursing are covered by Medicare; eliminates
conflicting provisions in Medicare Manuals. Transmittal 179
(Jan. 14, 2014), http://www.cms.gov/Regulations-andGuidance/Guidance/Transmittals/Downloads/R179BP.pdf
(replacing Transmittal 176 (Dec. 13, 2013),
http://www.cms.gov/Regulations-andGuidance/Guidance/Transmittals/Downloads/R176BP.pdf).
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
22
WHATJIMMO SETTLEMENT MEANS:
EDUCATIONAL CAMPAIGN
 CMS conducted nationwide Educational Campaign.
 CMS explained Settlement and new Manuals to
providers, Medicare Contractors, Medicare
adjudicators, patients, residents, caregivers. CMS
Website, National Calls, Open Door Forums, written
materials, trainings.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
23
WHAT JIMMO SETTLEMENT MEANS:
ACCOUNTABILITY AND REVEWS
 CMS will
• review random samples of Qualified Independent
•
•
Contractor (QIC) decisions
address errors raised in reviews
meet regularly with Plaintiffs’ counsel to correct
errors in individuals’ cases (up to 100)
• First meeting, Jan. 6, 2014
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
24
WHAT JIMMO SETTLEMENT MEANS:
RE-REVIEWS
 Individuals may request Re-review of Medicare’s
decisions made after Jan. 18, 2011.
 Re-review applies to individuals’ cases only based
on improvement standard.
 Re-review is not available to health care
providers/Medicaid State Agencies, only
beneficiaries.
 CMS developing form and process now.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
25
BIGGEST OBSTACLE TO
IMPLEMENTATION SINCE COURT
APPROVAL OF SETTLEMENT
 Continuing belief among providers and
adjudicators that beneficiary must be improving
before Medicare will pay (we still get daily calls
about patient who has “plateaued”).
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
26
WHAT WE TELL PEOPLE TO DO IF
MEDICARE COVERAGE IS DENIED
 Use Jimmo Settlement, regulations and Manual, CMS Jimmo
materials, and CMA self-help packets to educate Medicare
contractor/adjudicator and ask provider to continue services.
 Physician is best ally to order care and keep services in place.
 If denied Medicare coverage: Appeal
• Expedited Appeal – See instructions in Notice provided.
• If denied at first level, appeal again for Reconsideration.
• Strict time limits, but just a phone call from patient or
caregiver.
• Medical provider will forward medical records for review.
• Standard Appeal – continue and request ALJ hearing.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
27
UPDATES ON JIMMO
See CMA website:
http://www.medicareadvocacy.org/hidden/highlight-improvementstandard/.
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
28
CMA
Toby S. Edelman
Senior Policy Attorney
Center for Medicare Advocacy
1025 Connecticut Avenue, NW
Washington, DC 20036
(202) 293-5760, ext. 102
tedelman@medicareadvocacy.org
www.medicareadvocacy.org
Copyright © Center for Medicare Advocacy, Inc.
29