1. CENTER FOR MEDICARE ADVOCACY, INC.
Pennsylvania Association of Elder Law Attorneys
A TALE OF TWO LAWSUITS: Jimmo v. Sebelius (Medicare Coverage for Maintenance Care) and Bagnall v. Sebelius (Observation vs. Inpatient Hospital Status)
Margaret Murphy
Feb. 23, 2013
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PRESENTATION
Jimmo v. Sebelius Update
Practical Implications for Skilled Nursing Facilities (SNFs), Home Health and Outpatient Therapies
Questions & Answers
Bagnall v. Sebelius Update
Observation Status – What to do?
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3. Jimmo vs. Sebelius, Civil No. 5:11-CV-17 (D. VT. 1/18/2011)
Federal judge approved Settlement and certified nationwide Class at Fairness Hearing on 1/24/ 2013
Federal Class Action filed 1/18/2011to eliminate Improvement Standard
Settlement Agreement reached with govt attys on 10/16/2012
Plaintiffs: 5 individuals and 6 organizations
Alzheimer’s Association
National MS Society
National Committee to Preserve Social Security & Medicare
Paralyzed Veterans of America
Parkinson’s Action Network
United Cerebral Palsy
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4. Jimmo vs. Sebelius, Civil No. 5:11-CV-17 (D. VT. 1/18/2011) (Cont’d)
CMS statement about Jimmo on January 28, 2013: “We are working to implement the terms of the settlement and ensure that beneficiaries have access to the full range of services that they are entitled to under the law. The settlement will clarify existing policy that claims should not be denied solely based on a rule-of-thumb determination that a beneficiary's condition is not improving." From CMS spokesman Brian Cook in an message to Congressional Quarterly
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5. Jimmo vs. Sebelius, Civil No. 5:11-CV-17 (D. VT. 1/18/2011) (Cont’d)
U.S. Dept. of Health and Human Services (HHS):
“Under this settlement, Medicare policy will be clarified to ensure that claims from providers are reimbursed consistently and appropriately and not denied solely based on a rule-of-thumb determination that a beneficiary’s condition is not improving.” By Fabien Levy, spokesman for the U. S. Dept. of Health and Human Services (quote from The New York Times at:
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6. What Jimmo Settlement Means: No Denials Based On Improvement Standard
Coverage does not turn on the presence or absence of potential for improvement but rather on the need for skilled care
Services can be skilled and covered when:
Services are needed to maintain, prevent, or slow deterioration
So long as the beneficiary requires skilled care for services to be safe and effective Jimmo Settlement, §IX.6 and §IX.7
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7. What Jimmo Settlement Means: Revision of CMS Manuals
See CMA website for Jimmo Settlement info:
CMS to revise Medicare policy manuals, guidelines, and instructions for SNF, HH & Outpatient (OPT) Therapies (PT, ST, OT)
“Clarify” skilled maintenance therapies and nursing are covered by Medicare
Eliminate conflicting CMS policies
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8. What Jimmo Settlement Means: CMS Educational Campaign
Within 1 year of Order: All policy revisions completed, CMS Educational Campaign completed
Explain Settlement and new policies to:
Providers, Medicare Contractors, Medicare Adjudicators, Patients, Caregivers
CMS Website, National Calls, Open Door Forums, written materials & trainings
Policy revisions and Ed. Campaign: Review/Input from Ctr Medicare Advocacy & Vt Legal Aid
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9. What Jimmo Settlement Means: Accountability and Reviews
CMS to review random samples of QIC decisions & address errors raised in reviews
Meet regularly with Plaintiffs’ counsel to correct errors in individual cases
Individuals only may request “Re-review” of Medicare’s decisions final after 1/18/2011
For denials based on Improvement Standard
Not required to exhaust all levels of appeal (denial on MSN sufficient)
Court retains jurisdiction
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10. Jimmo Clarifies Proper Standard
Is skilled professional needed to ensure nursing or therapy is safe and effective?
Is a qualified nurse or therapist needed to provide or supervise the care?
Regardless of whether the skilled care is to improve, maintain, or slow deterioration.
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11. FAQs re Jimmo Settlement
Can Jimmo help now? Yes! Jimmo clarifies the current law. Use the Settlement Agreement & CMA’s self-help packets. See our website: medicareadvocacy.org
Is Jimmo limited to certain diagnoses, diseases, conditions? No! Jimmo applies to anyone who needs skilled care.
What types of services are covered? Skilled nursing or skilled therapies.
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12. FAQs re Jimmo Settlement cont’d
To which care settings does Jimmo apply? Skilled Nursing Facility, Home Health, Outpatient Therapy. If a person needs skilled nursing and/or therapy in these settings, Jimmo applies.
Examples of skilled nursing: Wound care; observation & assessment of lung congestion
Examples of skilled therapy: Therapy for an ALS patient with breathing difficulty; ROM therapy for a person with MS and contractures
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13. NO USE OF “RULES OF THUMB”
Should not be used to deny coverage including:
Lack of Restoration Potential
42 CFR §409.32(c); 42 CFR §409.44(b) - Nursing
42 CFR §409.44(c)(2)(iii)(B) and (C) - Maintenance Therapy
See also comments in 75 Federal Register 70395
Condition is chronic, terminal, or expected to last long time
42 CFR §409.44(b)(3)(iii)
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14. EXAMPLES OF “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 exists: SNF 100 days; Outpatient PT/ST and OT annual $1,900 limit (exceptions to “caps”); Home Health – no duration of time limits
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15. INDIVIDUAL ASSESSMENT REQUIRED
Do not assume Medicare is unavailable based on:
“Rules of Thumb”
Particular diagnosis
Lack of restoration potential
Treatment norms
Base decision on individual’s unique condition & needs
“The unique clinical condition of a patient may require the specialized skills of a qualified therapist to perform a safe and effective maintenance program….”
42 CFR §409.44(c)(2)(iii)(C)
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Jimmo vs. Sebelius
Effects of Jimmo Settlement in Various Care Settings
Next Steps …
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17. SKILLED NURSING FACILITY Still need to Meet SNF Coverage Criteria
3 Day prior hospital stay (sometimes waived by Medicare Advantage Plans)
Daily skilled care required to qualify for Medicare coverage:
5 days/week therapy (PT, OT, ST) or
7 days/week nursing or nursing and therapy combined
So – What is considered skilled?
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WHAT IS SKILLED CARE?
… so inherently complex that it can be safely and effectively performed only by, or under the supervision of, professional or technical personnel. 42 CFR § (a)
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19. HOME HEALTH COVERAGE 42 USC §1395x(m)
Services must be ordered by a physician
Under a written plan of care
Beneficiary must be “confined to home” (homebound) – does not mean bedbound!
Beneficiary must require skilled services
No duration of time limitation
No Co-Payments
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HOME HEALTH COVERAGE
42 CFR § et seq
Skilled care requirement:
Intermittent skilled nursing services
As little as 1 x / 60 days (recurring) or daily for predictable period of time or
Skilled PT or ST services and, in some circumstances, OT services
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HOME HEALTH (Cont.)
Added Benefit of Skilled Services Medicare Coverage of Other Home Health Services:
If Medicare covers Skilled Nursing or PT, ST, or continuing OT, then
Coverage also available for “dependent services”
Home health aides
Social worker, supplies
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22. OUTPATIENT THERAPIES MEDICARE PART B
Yearly dollar payment cap, indexed annually ($1,900 / year 2013)
PT and ST services ($1,900 combined)
Separate annual cap for OT services ($1,900 OT alone)
Can seek “Exception” to caps
Caps now apply to therapy services received in hospital outpatient department
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23. MEDICARE PART C (Medicare Advantage Plans (MA Plans))
Private Medicare plans
Provisions for delivery systems, not coverage
Coverage criteria required to be the same as those in original Medicare
Actual coverage of services not the same in practice (but should be…)
May offer more coverage than original Medicare, but not less
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24. What to Do if Medicare Coverage Denied After Jimmo?
Use Jimmo Settlement and CMA self-help packets to educate provider & continue services
Dr. is best ally to order care & keep services in place
If denied Medicare coverage: Appeal, Appeal, 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 & request ALJ hearing
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SUMMARY
Restoration potential is not the deciding factor
Medicare should not be denied at any care level because the beneficiary has a chronic condition or needs services to maintain his/her condition
“Individualized assessments” are required
Rules of thumb should not be used to determine
access to coverage or care
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Questions?
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OBSERVATION STATUS
Observation status: when a hospital stay is not a hospital stay
Beneficiary is in a hospital bed, receiving medical and nursing care, tests, treatments, drugs, food, supplies, etc.,
BUT is said to be outpatient in “Observation Status,” not inpatient.
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OBSERVATION STATUS
Medicare Manuals say observation should not exceed hours.
Increasingly, Medicare beneficiaries’ entire stay in an acute care hospital is called observation.
Many cases nationwide of multiple days and weeks in the hospital, all in “Observation.”
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OBSERVATION STATUS
Between 2006 – 2008, use of Observation Status increased 22.4%.
Billing for periods on Observation greater than 48 hours increased 70.3%.
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30. WHY DO HOSPITALS USE OBSERVATION STATUS?
Most common reason offered by hospitals is Recovery Audit Contractor (RAC) program, a program (among many) to address fraud and abuse, which uses proprietary system InterQual
Other reviewers of inpatient care also use InterQual: Medicare Administrative Contractors, Quality Improvement Organizations
Many hospitals also use InterQual standards
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31. PROBLEMS FOR BENEFICIARIES WITH USE OF INTERQUAL
Diagnosis-based InterQual system does not consider patients’ multiple chronic conditions and co-morbidities
No individualized determination
Decision made on paperwork submitted by hospital, not examination of patient
What should be a screening tool becomes the sole determinant
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32. NEGATIVE EFFECTS OF OBSERVATION STATUS
Generally must have 3-day prior inpatient hospital stay to qualify for Medicare skilled nursing facility coverage.
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OBSERVATION STATUS
Time spent in observation status or in the emergency room prior to (or instead of) an inpatient admission does not count toward the 3-day qualifying inpatient stay needed to qualify for SNF care.
Medicare Benefit Policy Manual, CMS Pub. No , Ch. 8, §20.1.
Landers v. Leavitt, 545 F.3d 98 (2nd Cir. 2008), cert. denied, 129 S.Ct (2009).
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OBSERVATION STATUS
Even if admitted as an inpatient by a patient’s attending physician, the hospital’s utilization review committee may retroactively reverse the admission determination to outpatient observation status.
Condition Code 44, Transmittal 299 (Sep. 2004), now at Medicare Claims Processing Manual, CMS Pub. No , Ch. 1, §50.3, (scroll down to §50.3 at pages ).
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OBSERVATION STATUS
Consequences for beneficiaries :
No appeal rights;
No Part A coverage for hospital stay;
Patient responsible for Part B cost-sharing during hospital stay;
No coverage for prescription drugs during hospital stay;
No Part A coverage for SNF stay;
Some beneficiaries who cannot afford SNF care go home, foregoing needed therapy;
If no Part B, pay “retail price” for hospital care.
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OBSERVATION STATUS
Consequences for health care system:
Quality of care concerns, especially with “observation units;”
Distorted statistics re: hospital admissions and readmissions;
Poor medical outcomes from not receiving rehabilitation after hospitalization;
Shifting costs from Medicare to beneficiaries and Medicaid (the states).
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BILLS IN CONGRESS
Past couple of years, bills proposed to count all time in hospital towards 3-day stay
New proposal to count all time in hospital as inpatient if stay exceeds 24 hours
Hard to pass anything in Congress at this time, particularly if any cost associated
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38. BAGNALL V. SEBELIUS No. 3:11-cv-1703 (D.Conn., filed Nov. 3, 2011)
12 beneficiary plaintiffs from Connecticut, Texas, Massachusetts, California, Delaware, and Minnesota.
All spent at least three days in a hospital, but stay was considered observation status
Increased hospital costs and deprived them of coverage for subsequent SNF care
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BAGNALL v. SEBELIUS
Filed as a nationwide class action
Seeks to include any Medicare beneficiary who on or after Jan. 1, 2009 had any portion of a stay in a hospital treated as observation status
DOJ file Motion to Dismiss
Briefed for more than a year
Case re-assigned to new judge and hearing set for 4/19/2013
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BAGNALL v. SEBELIUS
Main focus of case is to require Medicare to recognize that beneficiaries in a hospital should be covered under Part A, not Part B
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BAGNALL v. SEBELIUS
Alleges that Medicare statute, regulations, Admin. Procedures Act are violated
Seeks injunctive and declaratory relief to end policy of observation status
Seeks to require Medicare to re-evaluate claims of all class members to determine if their hospital stays should be reclassified as covered under Part A
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BAGNALL v. SEBELIUS
Second focus of case is the lack of notice and appeal rights
Seeks to require Medicare to allow beneficiaries to challenge coverage under Part B when it should be under Part A
Claims that statute, regulations, and due process require a notice and appeal procedure because beneficiaries have been improperly classified
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43. How to Appeal Observation Status
See our website for self help packets for observation status appeals:
Appeal both the hospital stay and the SNF stay.
When Medicare Summary Notice received for hospital bill, circle the hospital stay and file appeal within 120 days (see instructions on MSN).
Have SNF submit bill to Medicare (within a year). When denied on MSN, circle SNF stay and file appeal.
Continue appeals up to Admin. Law Judge; ALJ best chance to win.
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Questions?
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45. CENTER FOR MEDICARE ADVOCACY
Questions?
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DC: (202)
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