CMS Must Inform Providers on New Medicare Reimbursement Policy

August 26, 2016 - A Vermont judge has ordered CMS to further educate providers and auditors about a recent Medicare reimbursement policy that affects skilled nursing and rehabilitation facilities, reported the Center for Medicare Advocacy.

The court stated that CMS failed to properly inform healthcare stakeholders of the maintenance coverage standard that requires skilled nursing services to be covered by Medicare as long as they are maintaining a patient’s condition or preventing further deterioration. Prior to the ruling, Medicare often denied skilled nursing claims on the basis of the improvement standard, which required patient outcomes to improve for payment.

“It was distressing that CMS refused to take further action in response to the obvious systemic problems that continued to harm this particularly vulnerable class of Medicare beneficiaries,” said Judith Stein, an attorney for the plaintiffs and the Executive Director of the Center for Medicare Advocacy.  “Despite our repeated demonstrations that the word has not gotten out that people do not have to improve in order to obtain Medicare coverage for necessary care. CMS took the position that it had done enough.”

“We are relieved the Court has ordered CMS to do more to educate Medicare providers and decision-makers,” Stein added.

The recent court order stemmed from the 2013 Jimmo case ruling that determined skilled nursing and rehabilitation providers did not have to prove patient conditions were improving in order to receive Medicare reimbursements.  As part of the settlement agreement, CMS was required to develop and disseminate educational resources about the changes to the Medicare reimbursement policy, including the maintenance coverage standard.

“Specifically, the Settlement Agreement requires the Secretary to ‘engage in a nationwide educational campaign’ through the Centers for Medicare and Medicaid Services (‘CMS’), and in this ‘Educational Campaign,’ ‘use written materials and interactive forums with providers and contractors, to communicate the SNF [skilled nursing facilities], home health, and OPT [outpatient therapy] maintenance coverage standards and the [inpatient rehabilitation facility] coverage standards,’” stated the court’s opinion.

CMS reported that it took several steps to educate providers and auditors of the updated Medicare reimbursement standard. It created an article regarding the maintenance coverage standard and distributed it to a variety of Medicare payer entities, providers, claims appeals personnel, suppliers, and review contractors. The article was then posted on the federal agency’s website.

The federal agency also conducted five open door forums and two national call conference calls to discuss the maintenance coverage standard and field some questions from stakeholders.

However, the plaintiffs of the Jimmo case alleged that the information on the Medicare reimbursement ruling provided by CMS was “inaccurate, nonresponsive, and failed to reflect the maintenance coverage standard.”

“Plaintiffs acknowledge that the Secretary did not guarantee results or the absence of mistakes, but contend that the evidence supports a conclusion that the Secretary's Educational Campaign was flawed to such an extent that it deprived them of the benefit of their bargain because ‘'the evidence overwhelmingly indicates that the word did not get out’ regarding the maintenance coverage standards,” stated the opinion.

According to a Jimmo Implementation Council report, about 46 percent of providers were unaware of the education campaign sponsored by CMS and only 36 percent had participated in the education efforts.

A retired administrative law judge from the Office of Medicare Hearings and Appeals also told the court that the improvement standard continued to be a reason for claims denials in many of the appeal cases he saw and that the Secretary had “‘paid only lip service’ to the court's Judgment and has ‘not effectively implemented the letter or the spirit of the Jimmo settlement.’”

When the plaintiffs submitted recommendations to improve the educational campaign, such as a FAQ page on the CMS website, the federal agency responded, but chose not to adopt most of the provisions because they were “unnecessary or are not required by the Settlement Agreement.”

The Vermont court has ruled in favor of the plaintiffs regarding the educational campaign and ordered CMS to propose corrective actions within 45-days from the ruling.

“Returning to court was certainly not the preferable way to go, but CMS simply would not budge,” said Gill Deford, a member of the Center for Medicare Advocacy and lead counsel for the plaintiffs, in the press release. “We had to move for enforcement because there is no excuse for Medicare still using this illegal rule of thumb to deprive desperate beneficiaries of the care and services they need.”

Dig Deeper:

• Key Ways to Improve Claims Management and Reimbursement in the Healthcare Revenue Cycle

• 8 Tips for Avoiding Denials, Improving Claims Reimbursement