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Timestamp: 2019-04-22 06:13:34+00:00

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As reported this week in The Hill, President Obama is calling on Congress to add a “public option” to the Affordable Care Act (ACA) to improve his signature health law.
“Public programs like Medicare often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers,” Obama writes in the Journal of the American Medical Association.
“The public plan did not make it into the final legislation. Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited,” writes the President.
The new embrace from the President also comes amid what appears to be a concerted push by the Democratic Party to rally around the public option.
July 14, 2016 – The Center for Medicare Advocacy (CMA) is thrilled to be partnering with The John A. Hartford Foundation to improve care for older adults with long-term and chronic conditions. With the Foundation’s generous two-year grant, CMA will be able to focus on solutions for older adults caught in the web of hospital “outpatient” Observation Status, which reduces access to key health and therapeutic care.
Over the two-year grant period, CMA, will gather existing resources and collect stories from beneficiaries, produce and update advocacy materials, and conduct extensive outreach and education that will improve observation status policy through regulatory change, improved federal guidance, and increased awareness by legislators. The grant funding for this project will also strengthen CMA’s advocacy on other important issues, including increasing access to oral health care for older adults.
“Outpatient” Observation Status is a policy created by the Centers for Medicare Medicaid Services to classify certain very short hospital stays for billing purposes. The intent was to identify, and pay less for, these stays.
Medicare hospital patients are increasingly classified as “outpatients” on Observation Status, rather than admitted inpatients. This is true even for patients who are in the hospital for many days, for diagnosis, tests, nursing, physician care and treatment. Unfortunately, Observation Status results in myriad unintended consequences. For example, Medicare coverage for post-hospital nursing home care is often entirely unavailable for Observation patients since it requires a 3-day prior inpatient hospital stay. Thus, Observation Status “outpatients” are ineligible for Medicare nursing home coverage even if they were in the hospital for many days or weeks.
Hospital Observation Status has profound consequences for the quality and cost of care available for older, vulnerable Medicare patients. It also harms hospitals and nursing homes, the Medicare appeals process, the integrity of the Medicare program – and shifts costs to State Medicaid budgets. With support from The John A. Hartford Foundation, CMA will be able to enhance efforts to reduce the harm caused by Observation Status and to advocate for better care for older adults.
Established in 1986, The Center for Medicare Advocacy, Inc. is a national nonprofit, nonpartisan law organization that provides education, advocacy and legal assistance to help older people and people with disabilities obtain access to Medicare and quality health care. CMA focuses on the needs of Medicare beneficiaries, people with chronic conditions, and those in need of long-term care. The organization is involved in writing, education, and advocacy activities of importance to Medicare beneficiaries nationwide.
Founded in 1929 by John and George Hartford of the Great Atlantic Pacific Tea Company (AP), The John A. Hartford Foundation, based in New York City, is a private, nonpartisan philanthropy dedicated to improving the care of older adults. Every eight seconds, someone in America turns 65. The largest-ever generation of older adults is living and working longer, redefining later life, and enriching our communities and society. Comprehensive, coordinated, and continuous care that keeps older adults as healthy as possible is essential to sustaining these valuable contributions. The John A. Hartford Foundation believes that investments in aging experts and innovations can transform how care is delivered, lowering costs and dramatically improving the health of older adults. Additional information about the Foundation and its programs is available at www.jhartfound.org.
If properly utilized, Electronic Health Records (EHR) could increase the quality of care for Medicare’s beneficiaries and lower program costs. EHRs provide the possibility of easy transfer of information between providers, and better patient access to important information. This can mean that clinicians are apprised of changes in health status, with access to information regarding hospital, Intensive Care Unit (ICU), and Skilled Nursing Facility admissions.
EHR also have the potential to highlight and prioritize patient needs and preferences. For example, the goals expressed by a patient through a Physician Order for Life-Sustaining Treatment (POLST), or in an Advanced Directive, that are accessible in her EHR, can inform an emergency first responder as well as an ICU physician. Further, a well-designed EHR has the potential to assist a care team as it coordinates treatments and plans to meet the patient’s goals.
Each year, hospitals, primary care physicians and specialists are more likely to have Certified Electronic Health Records Technology (CERHT). The extent to which these systems are accessed, however, is unclear. Although providers are increasingly likely to record the results of an annual wellness exam, for instance, on a patient’s online portal, many patients are either unaware of these electronic records or do not know how to access them.
Additionally, the EHR goals of providing accurate, accessible information are only effective if the technology is properly used. The Centers for Medicare Medicaid Services (CMS) recently proposed rules that define the extent to which clinicians must engage with their CERHT in order to keep Medicare payments in the future. The Center for Medicare Advocacy commented on the proposed regulation, expressing concern that CMS set such a low bar for the utilization of EHRs that physicians could do the bare minimum to satisfy CMS’s standards.
While some clinicians and patients are understandably concerned about the security and accuracy of EHRs, available data should allay some of these concerns. Although CMS is proposing a very low bar for utilization, the possible benefits outlined above, and the discussion below regarding the accuracy and security of EHRs may influence more patients and providers to utilize these systems. While EHR systems are still relatively new, greater adoption of Electronic Health Records has the promise of enhancing health outcomes.
In a survey that included respondents from hospitals, clinics and ambulatory health centers, IT leadership, and health care executives, Health IT Outcomes found that addressing health IT security was the top priority of those surveyed (42% percent of those surveyed).
It is unclear how recent data breaches are affecting the public’s perception of health IT privacy and security. The Department of Health and Human Services’ Office of the National Coordinator for Health Information Technology (ONC) released data that showed the public’s confidence in the security of health IT grew from 2012 to 2014. The number of surveyed persons who said they were very or somewhat concerned with the privacy of medical records dropped from 77% in 2012 to 58% in 2014. The number of persons who said they were concerned with the security of medical records dropped from 72% in 2012 to 52% in 2014.
Medicare beneficiaries may also have concerns that their electronic health records may not be accurate or up to date. There is evidence, however, that EHR can create an accurate record in even the most fast-paced and stressful environments. Many of the problems regarding record accuracy could be significantly addressed if providers were required to do more than the bare minimum to participate in the upcoming MIPS program, and if patients themselves took greater initiative to check and, when appropriate, update their medication records.
In April 2016, Leapfrog Group, an organization that rates hospitals on patient safety, surveyed 1,800 hospitals and found that 40% of potentially harmful drug orders were not flagged by electronic health systems. These included medication orders for the wrong dosage or for the wrong condition. Moreover, Leapfrog discovered that EHRs missed 13% of particular kinds of errors that could have resulted in patient deaths.
A 2013 American College of Emergency Physicians report highlighted mistakes in the emergency room such as the ordering of the wrong medications in patients’ EHR. The study surmised that these mistakes were likely a result of a poorly designed record.
A 2010 Medical Care Research and Review literature review of 35 studies concerning EHR accuracy found “significant errors of omissions” in medication lists. Errors in retention of previously discontinued mediations were present anywhere between 13 and 29% of the time. In two studies, a high proportion of patients (81 and 95%) reported errors in their mediation lists.
A 2008 International Journal of Medical Informatics study highlighted that 54% of users of an EHR lacked up-to-date information in their health records concerning their over-the-counter medications. Around three times more over-the-counter drugs than prescription drugs were missing from patient records. The study further found that a patient’s emailing a provider in an effort to try to update his or her records rarely resulted in the updating of this information by providers.
A study conducted in the first half of 2012 by the National Opinion Research Center at the University of Chicago gave the roughly 200,000 patients enrolled in the MyGeisinger Health System that served central and northeastern Pennsylvania the option of indicating which medications they were no longer taking. The information was then presented to a pharmacist via the EHR and the pharmacist then reviewed the new data and had the option to contact the patient and the patient’s physician. In 89% of these cases in which forms were completed, patients requested changes to their medication record regarding such things as the frequency of their medication dosage. Out of a sample of 107 patient forms, pharmacists made updates to patients’ medication records reflecting the new information patients provided 68% of the time. Additionally, patients who were contacted by pharmacists found this follow up discussion reassuring. The MyGeisinger pilot demonstration showed that increased patient-pharmacist communication can lead to a more accurate patient electronic health record when this communication occurs within a built-in communication tool.
Electronic Health Records are a work in progress. Better patient and provider utilization of EHRs is the best means of ensuring that patient records are accurate and helpful. With CMS’s push for interoperability of patient records, providers have strong incentives to fix many of the growing pains that have caused concern. Given the benefits outlined above and the reported progress toward more secure and accurate EHRs, these systems hold promise for enhancing patient care.
July 13, 2016 – M. Hubbard.
 The Federal Meaningful Use Program required a high-rate of hospital utilization of electronic health records. See: CMS. “Medicare and Medicaid Programs; Electronic Health Record Incentive Program—Stage 3 and Modifications to Meaningful Use in 2015 through 2017; Final Rule.” 16 October 2015. 80:200. https://www.gpo.gov/fdsys/pkg/FR-2015-10-16/pdf/2015-25595.pdf (site visited February 22, 2016). There are some studies that captured the rates of adoption of EHR systems, but not the extent to which these systems were used in previous years. See: Chun-Ju Hsiao, Ashish K. Jha, Jennifer King, Vaishali Patel, et. al. “Office-Based Physicians Are Responding To Incentives and Assistance By Adopting and Using Electronic Health Records.” Health Affairs. August 2013. 32:8. http://content.healthaffairs.org/content/32/8/1470.full.pdf+html (site visited July 12, 2016). Catherine M. DesRoches, Dustin Charles, Michael F. Furukawa, Maulik S. Joshi, et. al. “Adoption Of Electronic Health Records Grows Rapidly, But Fewer Than Half Of US Hospitals Had At Least A Basic System In 2012.” Health Affairs. August 2013. 32:8. http://content.healthaffairs.org/content/32/8/1478.full.pdf+html (site visited July 12, 2016).
 See: Center for Medicare Advocacy. “Center Comments on Proposed Changes to Physician Payments.” 27 June 2016. http://www.medicareadvocacy.org/center-comments-on-proposed-changes-to-physican-payments/ (site visited July 12, 2016).
 Dan Munro. “Data Breaches In Healthcare Totaled Over 112 Million Records In 2015.” Forbes. 31 December 2015. http://www.forbes.com/sites/danmunro/2015/12/31/data-breaches-in-healthcare-total-over-112-million-records-in-2015/#572a33b47fd5 (site visited July 12, 2016). Jessica Davis. “7 Largest Data Breaches of 2015.” Healthcare IT News. 11 December 2015. http://www.healthcareitnews.com/news/7-largest-data-breaches-2015 (site visited July 12, 2016).
 John Oncea. “Top 10 Health IT Trends of 2016.” Health IT Outcomes. 24 November 2015. http://www.healthitoutcomes.com/doc/top-health-it-trends-for-0002 (site visited March 10, 2016). P. 4.
 Vaishali Patel, Penelope Hughes, Wesley Barker, and Lisa Moon. “Trends in Individuals’ Perceptions regarding Privacy and Security of Medical Records and Exchange of Health Information: 2012-2014.” ONC Data Brief 33. February 2016. http://dashboard.healthit.gov/evaluations/data-briefs/trends-individual-perceptions-privacy-security-ehrs-hie.php (site visited March 10, 2016). P. 2.
 Shefali Luthra. “Hospital Software Often Doesn’t Flag Unsafe Drug Prescriptions, Report Finds.” Kaiser Health News. 07 April 2016. http://khn.org/news/hospital-software-often-doesnt-flag-unsafe-drug-prescriptions-report-finds/ (site visited April 8, 2016).
 Shefali Luthra. “Electronic Health Records in the ER: A Breeding Ground for Error.” Modern Healthcare. 27 February 2016.
 Kitty S. Chan, Jinnet B. Fowles, and Jonathan P. Weiner. “Electronic Health Records and the Reliability and Validity of Quality Measures: A Review of the Literature.” Medical Care Research and Review. 2010. 67:5. P. 517, 520.
 Maria Staroselsky, Lynn A. Volk, Ruslana Tsurikova, Lisa P. Newmark, et. al. “An Effort to Improve Electronic Health Record Medication List Accuracy between Visits: Patients’ and Physicians’ Response.” International Journal of Medical Informatics. 01 March 2008. 77:3. P. 153-160.
 Ofir Ben-Assuli, Doron Sagi, Moshe Leshno, Avinoah Ironi, and Amitai Ziv. “Improving Diagnostic Accuracy using EHR in Emergency Departments: A Simulation-Based Study.” Journal of Biomedical Informatics. 2015. 55. P. 31.
 Prashila Dullabh, Norman Sondheimer, Ethan Katsch, Jean-Ezra Young, et. al. “Executive Summary: Demonstrating the Effectiveness of Patient Feedback in Improving the Accuracy of Medical Records.” NORC at the University of Chicago. June 2014. https://www.healthit.gov/sites/default/files/20120831_odrexecutivesummary508.pdf (site visited March 10, 2016). P. 3-5.
The two major American political parties have released their 2016 party platforms in anticipation of their respective party conventions and the upcoming general election. Given the importance of health care in this upcoming election, the Center for Medicare Advocacy has done an initial analysis of the health-related positions of the two parties. Below we present a comparison of Medicare and health care related policies the two parties may pursue according to their platform statements, as well as links to those statements so those interested in more detail can read them in their entirety.
Give every person eligible for Medicare in the future who is also under 55 years of age an income-adjusted stipend (with catastrophic protection) to put towards health expenses.
End goal is universal health coverage. Americans should be able to access comprehensive health coverage through either Medicare or a public health option.
End “surprise billing.” Consumers should be aware of health costs prior to a visit to a physician.
Push for the expansion of Medicaid eligibility in states that have not taken this step.
The Democratic platform calls for “a push for a comprehensive system of primary medical, dental, and mental health care and low-cost prescription drugs through a major expansion of community health centers” with the goal of providing valuable preventive care, education, and treatment of chronic conditions for many low-income Americans.
Health materials should be culturally and linguistically appropriate and easy to read.
Health data should be separated into its component parts for Asian Americans and Pacific Islanders. This will help in developing and understanding the health needs and preferences of these two disparate groups.
In order for Medicare Part A to pay for a patient’s stay in a skilled nursing facility (SNF), the patient must first have spent at least three consecutive days as an inpatient in an acute care hospital. For many Medicare beneficiaries, Part A SNF coverage is denied because the hospital classifies the stay as Outpatient or Observation Status. Although the care provided by the hospital to patients with stays classified as Outpatient or Observation Status may be indistinguishable to the care provided to inpatients, the Outpatient classification, by itself, prevents Part A coverage of the SNF stay. Observation Status is a persistent problem nationwide, affecting tens of thousands of beneficiaries, or more, each year. While the Centers for Medicare Medicaid Services (CMS) has become more insistent on the use of Observation Status, the agency is simultaneously conducting multiple demonstrations that would waive the three-day inpatient hospital stay requirement entirely. The most recent example is included in proposed rules, published July 15, 2016, that address the three-day waiver for certain Accountable Care Organizations.
 See Center for Medicare Advocacy’s materials on observation status, at http://www.medicareadvocacy.org/?s=observationop.x=0op.y=0.
 In proposed rules implementing the Notice of Observation Treatment and Implications for Care Eligibility Act (NOTICE Act), 81 Fed. Reg. 24945 (April 27, 2016), CMS proposed to amend the federal regulations to make clear beyond doubt that observation status is not appealable. Proposed 42 C.F.R. §405.926(u). See Center, “Observation Status and the NOTICE Act: Advocates Not Over the Moon” (Alert, April 27, 2016), http://www.medicareadvocacy.org/observation-status-and-the-notice-act-advocates-not-over-the-moon/.
Unfortunately, under the VBP Program that CMS implemented, low-cost hospitals were financially rewarded for simply being low-cost, regardless of the quality of care they provided. Researchers analyzing VBP payments to hospitals in 2015 found that low-cost hospitals that provided poor quality of care nevertheless received bonus payments under the hospital VBP Program.
The issue of rewarding efficiency, regardless of quality, has assumed even greater significance in light of Congress’s expansion of efficiency incentives to post-acute providers in the Improving Medicare Post-Acute Care Transformation Act of 2014.
On April 19, 2012, CMS added data to its Hospital Compare website to reflect hospitals’ Medicare Spending Per Beneficiary. CMS proposed to add this measure to the VBP Program as an Efficiency Measure in proposed rules and incorporated the measure into final rules.
We believe that attributing significant weight to this domain is critical to ensuring that hospitals make efforts to provide effective care on an inpatient basis and build stronger relationships with the providers and suppliers who care for their patients before and after the hospitalization.
17% of 1339 low-quality hospitals received bonus payments in 2015, compared to 0% of low-quality hospitals in 2014.
The researchers suggest that either of these approaches “would eliminate rewards to low-quality hospitals and limit the incentives hospitals currently have to trade reductions in spending for improvements in quality.” Alternatively, CMS could require minimum performance thresholds, separately, for each domain.
Implementing this statutory directive, the Centers for Medicare Medicaid Services’ annual updates to Medicare reimbursement for Fiscal Year 2017 for the post-acute providers include proposed measures for Medicare spending per beneficiary.
Value-Based Purchasing Programs have been promoted as ways to improve care in the health care system. The hospital VBP Program added an independent goal – reducing spending.
Advocates and policy-makers need to assure that the measures defining “value” in a VBP Program are worth promoting. Paying more to hospitals that spend less on their patients but have poor outcomes makes little sense.
In light of the research findings with respect to hospitals, Congress and CMS need to reconsider expanding use of this measure to post-acute providers. As recommended by the hospital researchers, they need, at least, to assure that quality is incorporated into any efficiency measures that are implemented.
 Section 3001 of the ACA, amending Social Security Act §1886(o)(2)(B)(ii), 42 U.S.C. §1395ww(o).
 77 Fed. Reg. 53257, 53588 (Aug. 31, 2012), https://www.gpo.gov/fdsys/pkg/FR-2012-08-31/pdf/2012-19079.pdf.
 Anup Das, Edward C. Norton, David C. Miller, Andrew M. Ryan, John D. Birkmeyer, Lena M. Chen, “Adding A Spending Metric To Medicare’s Value-Based Purchasing Program Rewarded Low-Quality Hospitals,” Health Affairs 35, No. 5 (2016): 898-906 [hereafter “Adding A Spending Metric To Medicare’s Value-Based Purchasing Program Rewarded Low-Quality Hospitals]. An Abstract of the article is available at http://content.healthaffairs.org/content/35/5/898.abstract.
 77 Fed. Reg. 53257, 53588.
 76 Fed. Reg. 25,787, 25896.
 77 red. Reg. 53257, 53585.
 77 Fed. Reg. 53257, 53605.
 77 Fed. Reg. 53257, 53606.
 “Adding A Spending Metric To Medicare’s Value-Based Purchasing Program Rewarded Low-Quality Hospitals,”supra note 2, at 902.
 “Adding A Spending Metric To Medicare’s Value-Based Purchasing Program Rewarded Low-Quality Hospitals,”supra note 2, at 898, 902.
 Pub. L. 113-185 (Oct. 6, 2014), 42 U.S.C. §1395lll.
 The skilled nursing facility proposed rules are at 81 Fed. Reg.24229, 24258-24262 (Apr. 25, 2016), https://www.gpo.gov/fdsys/pkg/FR-2016-04-25/pdf/2016-09399.pdf; inpatient rehabilitation hospitals, 81 Fed. Reg. 24177, 24197-24201 (Apr. 25, 2016), https://www.gpo.gov/fdsys/pkg/FR-2016-04-25/pdf/2016-09397.pdf; long-term care hospitals, 81 Fed. Reg. 24945, 25216-25220 (Apr. 27, 2016), https://www.gpo.gov/fdsys/pkg/FR-2016-04-27/pdf/2016-09120.pdf.
On June 30, 2016 the Centers for Medicare Medicaid Services (CMS) published a proposed rule about the difficulties of dually eligible people (individuals eligible for both Medicare and Medicaid) to obtain Durable Medical Equipment (DME). The proposed rule seeks information about the problem, as well as potential solutions. The proposed rule is primarily focused on End Stage Renal Disease (ESRD). The DME request for information is separate from the ESRD-specific content.
In proposed rules updating Medicare reimbursement to acute care hospitals, the Centers for Medicare Medicaid Services (CMS) announces how it will implement the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act). Effective August 6, 2016, the NOTICE Act requires that hospitals provide written and oral notice, within 36 hours, to patients who are in observation or other outpatient status for more than 24 hours. The notice must explain the reason that the patient is an outpatient, not an inpatient, and describe the implications of that status both for cost-sharing in the hospital and for “subsequent eligibility for coverage” in a skilled nursing facility (SNF).
CMS describes the issue as “outpatients” receiving “observation services.” In reality, however, observation status is about patients in the hospital who receive medical and nursing care, tests, medications, food, and stay overnight, but are called outpatients. The Center refers to this issue as “outpatient observation status” because there are no hospital services that are distinctly “observation” and because these so-called outpatients generally receive care that is identical to the care received by an inpatient.
When the care received by hospital inpatients and outpatients is indistinguishable, patients should have identical Part A coverage for their post-hospital care in a skilled nursing facility (SNF). Time spent in a hospital, whether called inpatient or outpatient (including observation status) should satisfy the three-day hospital stay that is required for Medicare Part A coverage of a stay in a SNF.
The MOON will not be required for all outpatients. CMS proposes to require hospitals to give the MOON only to patients entitled to Medicare for whom they are billing Medicare for observation hours. Patients who do not have Medicare Part B will receive the MOON, even though their observation status stay or other outpatient stay in the hospital will not be covered by Medicare Part B because they do not have Part B. Patients in Medicare Advantage plans that do not require a three-day inpatient stay will also receive the MOON, even though the information in the MOON may not actually be applicable to them. Medicare Advantage plans are permitted to waive the three-day requirement, and many do.
CMS states explicitly, in both the preamble and in the proposed regulatory language, that the NOTICE Act does not give patients any appeal rights.
When it implemented the two-midnight rule, CMS cut Medicare reimbursement to hospitals by 0.2%, reflecting its expectation that there would be more inpatient stays as a result of the new rule. The hospitals sued and challenged the cut in reimbursement. In the proposed rules at issue here, CMS reports that “in light of recent review and the unique circumstances surrounding this adjustment,” it prospectively removes this reduction and retroactively restores full reimbursement to hospitals. This decision by CMS is an implicit acknowledgement that hospitals are continuing to classify patients as outpatients and that the two-midnight rule has not increased the number of hospitalized patients classified as inpatients.
The Center opposes the proposed rule’s refusal to require the hospital to explain in the MOON the specific reason the patient is being classified as an outpatient. This decision is contrary to all other Medicare notices.
In both traditional Medicare and Medicare Advantage, CMS requires health care providers and managed care plans to explain in detail the specific reasons why they believe Medicare coverage is not available. For example, in traditional Medicare, independent laboratories, home health agencies, hospices, physicians, practitioners, and suppliers must use the Advance Beneficiary Notice (ABN); skilled nursing facilities must use the SNF ABN or one of several mandated denial notices; and hospitals must use the Hospital-Issued Notice of Noncoverage. Medicare Advantage plans must issue a Notice of Denial of Medical Coverage (or Payment). Each of the forms includes a section in which the provider is required to explain the basis of the denial of coverage. The proposed MOON is unique in its mandated use of a blanket statement, not specifically tailored to the individual patient, that fails to require an explanation of the basis for its decision that Medicare coverage is unavailable.
Moreover, CMS’s proposal not to require hospitals to provide information about the specific reason a patient is in observation status is contrary to the NOTICE Act and its legislative history. The Act directs hospitals to explain “the status of the individual as an outpatient receiving observation services and not as an inpatient of the hospital or critical access hospital and the reasons for such status of such individual.” The legislation history confirms that hospitals must give patients “meaningful disclosure” of their status in the hospital. Requiring hospitals to use standardized language about the “reason” for a patient’s being placed on observation status, which CMS has declared by fiat, thwarts the purpose of delivering “meaningful” information to patients.
Only the MOON defines the coverage issue as non-appealable.
Just as Medicare beneficiaries can challenge a premature discharge from a hospital or contest other coverage determinations in the Medicare program, hospitalized patients who are called outpatients should be able to appeal to Medicare their placement on observation or other outpatient status.
The Center opposes the under-inclusive category of patients who will be given the MOON.
CMS proposes that the MOON will be required only for patients whose hospitals code their “outpatient” Medicare bills as Observation Status. This decision affects many hundreds of thousands of people. The HHS Inspector General reported in 2013 that in 2012, 1.5 million patients had hospital stays that were classified as observation (because the hospital billed Medicare for observation hours) and another 1.4 million patients had long outpatient stays that were not coded as observation (because the hospital did not bill Medicare for observation hours). In other words, about half of all long-stay outpatients were not considered to be patients in observation status, but solely because the hospital chose not to bill Medicare for observation hours. However, the consequences for patients remained the same. Whether or not the hospital billed Medicare for observation hours, the patient’s post-hospital care in the SNF was not covered because the patient was classified as an outpatient by the hospital.
CMS’s decision not to require the MOON for all outpatients is also contrary to the legislative history of the NOTICE Act, which requires hospitals to provide information to patients about whether they are inpatients or outpatients. CMS’s proposed decision simply exacerbates the arbitrariness of observation status. Not only does it remain arbitrary whether patients are called outpatients or inpatients; it is now also arbitrary whether hospitals are required to give the MOON to outpatients.
CMS must assure that the MOON is only given to a patient who is able to understand it or to a person with legal authority to accept the notice on the patient’s behalf.
If a hospital gives the MOON to a patient who is in immense pain or otherwise not in a position to understand the notice, the notice is defective. The Medicare Claims Processing Manual, Ch. 30, sec. 40.3, explains that notices are valid only if given to patients who can understand them.
The contractor will not consider delivery of a notice to be properly done unless the beneficiary, or authorized representative, was able to comprehend the notice (i.e., they were capable of receiving notice). A comatose person, a confused person (e.g., someone who is experiencing confusion due to senility, dementia, Alzheimer’s disease), a legally incompetent person, a person under great duress (for example, in a medical emergency) is not able to understand and act on his/her rights, therefore necessitating the presence of an authorized representative for purposes of notice. A person who does not read the language in which the notice is written, a person who is not able to read at all or who is functionally illiterate to read any notice, a blind person or otherwise visually impaired person who cannot see the words on the printed page, or a deaf person who cannot hear an oral notice being given by phone, or could not ask questions about the printed word without aid of a translator, is a person for whom receipt of the usual written notice in English may not constitute having received notice at all (this is not an exclusive list). This may be remedied when an authorized representative has no such barrier to receiving notice. However, in the absence of an authorized representative, the notifier must take other steps to overcome the difficulty of notification. These may include providing notice in the language of the beneficiary (or authorized representative), in Braille, in extra large print, or by getting an interpreter to translate the notice, in accordance with the needs of the beneficiary or authorized representative to act in an informed manner. If the beneficiary was not capable of receiving the notice, the contractor will hold that the beneficiary did not receive proper notice, hold that the beneficiary is not liable, and will hold the notifier liable.
Fifth, CMS significantly misstates when and how observation status is used.
CMS repeats in the preamble its belief that use of Condition Code 44 (which allows hospitals to change a patient’s status from inpatient to outpatient) is rare and that the decision to admit to inpatient status is usually made within 48 hours, and usually less than 24 hours. The Center’s experience is to the contrary.
Testifying on behalf of the Society of Hospital Medicine before the House Ways and Means Committee, Subcommittee on Health, in May 2014, Ann M. Sheehy, MD, MS, University of Wisconsin School of Medicine and Public Health described hospitals’ increasing use of observation status and testified that hospitalists reported that they are asked to change the status of their patients “for 16% of the cases they see in an average day of clinical services.” Dr. Sheehy’s research documented that the time of day a patient presents to the hospital is a key determinant of the patient’s inpatient/outpatient status.
CMS reports in the preamble to these proposed rules that in 2014, 6142 hospitals and critical access hospitals submitted 977,000 claims for outpatient observation exceeding 24 hours.
The Center hears regularly from people all over the country whose status was changed from inpatient to outpatient or who remained in the hospital for multiple days (five and six days and more), all classified as outpatient, even after the “Two-Midnight Rule” was promulgated. For example, on May 17, 2016, I spoke with a nursing home administrator in Massachusetts who described a resident at her facility who had been in the hospital for six midnights in May 2016 – four midnights in the community hospital, coded as observation, and two midnights, coded as inpatient, in another acute care hospital to which the community hospital had him transferred. Although hospitalized for six midnights, the resident did not have a three-midnight inpatient stay and, accordingly, he did not qualify for Medicare coverage of his stay at the SNF.
The draft MOON Notice is a form notice that is likely to be unintelligible to all but the most sophisticated Medicare advocate. It is not a “plain language written notice,” as CMS recognizes is required by law. The MOON is too long and it fails to give meaningful, comprehensible information to a patient about the consequences of being classified as an outpatient.
He or she is currently classified as an outpatient and that this classification means that the patient (1) will have to pay out-of-pocket for medications received in the hospital, (2) will have to pay Part B co-payments for services provided by the hospital and Medicare will not pay if the patient goes to a skilled nursing facility after the hospital.
The hospital may change the patient’s classification to inpatient, but if it does, the change becomes effective only at the time of the physician’s order. If the patient then has three midnights in the hospital as an inpatient, Medicare Part A may pay for a stay in a skilled nursing facility.
If the patient is in a Medicare Advantage plan, the plan may pay for a stay in a skilled nursing facility whether or not the patient was called an inpatient in the hospital.
Gives the patient the right to appeal to Medicare for an official CMS determination of his or her status.
CMS must not promulgate as a final rule subsection (u) under §405.926. This is the proposed regulatory language saying that observation status is not an appealable issue. The Center urges CMS to allow patients to appeal their classification as outpatients to Medicare.
CMS has authority under existing law to define inpatient hospital care and to count all the time a patient spends in the hospital towards the prior hospital stay required for Medicare SNF coverage. We urge CMS to do so.
The Center also urges CMS to revise its Manuals so that all the time a patient spends in the hospital counts towards the three-day prior hospital stay required to cover subsequent skilled nursing facility care. At his request, the Center sent CMS Medicare Director, Sean Cavanaugh, a memorandum documenting the agency’s legal authority in 2014. We submitted similar information in 2015 in comments on proposed rules. We reiterate these points below.
If CMS believes that it lacks authority to count all time in the hospital, however, the Center encourages CMS to support bipartisan bills now pending in Congress, H.R.1571 and S.843, the Improving Access to Medicare Coverage Act of 2015. The legislation, which counts all time spent by a patient in the hospital, is supported by a coalition of 29 national organizations representing physicians, nurses, other health care professionals, and advocates.
While fully supporting the legislation, the Center notes that CMS has authority under existing law to count all time spent by a patient in the hospital for purposes of qualifying for Part A coverage in a SNF. CMS policy created observation status and CMS action could adjust or rescind it.
[W]e note that the Medicare statute does not unambiguously require the construction we have adopted. If CMS were to promulgate a different definition of inpatient in the exercise of its authority to make rules carrying the force of law, that definition would be eligible for Chevron deference notwithstanding our holding today.
Landers, 545 F.3d at 112.
CMS correctly understood that it could not repeal the three-day statutory requirement by regulation but that it could count the time in outpatient status, if it chose. It’s only stated reason for not counting observation time, despite widespread support of such a change from commenters, was that it wanted to continue reviewing the issue. That review has now continued for eight [now almost 11] additional years.
Finally, CMS allows certain hospital stays to count in qualifying a patient for Part A-covered SNF care even when the hospital care is different from Part A-covered hospital care.
In the context of hospice services, CMS has recognized that “general inpatient care” in a hospital, although “not equivalent to a hospital level of care under the Medicare hospital benefit,” nevertheless qualifies a hospice beneficiary for Part A-covered SNF services.
The argument for counting observation or outpatient time for purposes of calculating eligibility for the Part A SNF benefit is, of course, far stronger than either of the prior examples since, as CMS acknowledges in the proposed rules, care in the hospital is indistinguishable whether the patient is formally admitted as an inpatient or called an outpatient.
In addition, the status of the beneficiaries themselves does not change from inpatient to outpatient under the Part B inpatient billing policy. Therefore, even if the admission itself is determined to be not medically necessary under this policy, the beneficiary would still be considered a hospital inpatient for the duration of the stay – which, if it occurs for the appropriate duration, would comprise a “qualifying” hospital stay for SNF benefit purposes so long as the care provided during the stay meets the broad definition of medical necessity described above.
A patient’s actually receiving “medically necessary” care in the hospital, not the classification of the care as “inpatient,” is the key factor for determining the patient’s eligibility for subsequent Part A SNF coverage.
As the Court in Landers held and CMS itself recognized in 2005, CMS has authority under the Medicare statute to redefine inpatient status to count all time in the hospital. In Manual provisions, CMS recognizes that care in a hospital that is not covered by Medicare can nevertheless count for purposes of Part A SNF coverage. In its hospital rebilling option, CMS recognizes that receiving medically necessary care in the hospital is the key factor in determining Part A SNF coverage. CMS should confirm that time spent in observation or outpatient status qualifies a patient for Medicare Part A SNF coverage so long as the care in the hospital was medically necessary.
Thank you for the opportunity to submit comments on the proposed NOTICE Act and the MOON.
 81 Fed. Reg. 24945 (Apr. 27, 2016), https://www.gpo.gov/fdsys/pkg/FR-2016-04-27/pdf/2016-09120.pdf.
 The “subsequent eligibility” is actually non-eligibility. Medicare Part A pays for a resident’s stay in a SNF only if the resident spent at least three days as an inpatient in the hospital.
 Congressman Lloyd Doggett on the House Floor during passage of the NOTICE Act, March 16, 2015, described the need for “meaningful disclosure” to give patients the knowledge they need, https://www.youtube.com/watch?v=V_wqe1CP-yIfeature=youtu.be.
 See CMS forms cited at footnotes 14-18, supra.
 81 Fed Reg. 24945, 21532.
 Kirsten Barron and Lynn Greiner, “The New and Improved (and Plain Language) Mandatory Family Law Forms,” NWLawyer 9 (Apr/May 2016).
 70 Fed. Reg. 29069, 29098-29100 (May 19, 2005).
 70 Fed. Reg. 45025, 45050 (Aug. 4, 2005).
 Medicare Benefit Policy Manual, Chapter 9, §40.1.5, http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c09.pdf.
 Medicare Benefit Policy Manual, Chapter 8, §20.1.1, http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c08.pdf.
 78 Fed. Reg. 50495, 50921 (Aug. 19, 2013).

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