Medicare Skilled Nursing Facility Coverage, Discharges, and Transfers During the COVID Crisis

Skilled nursing facilities (SNFs/nursing homes) often tell residents and families that they are discharging the resident because Medicare will no longer pay for the resident’s stay.  In a previous Alert (Jan. 2016), the Center for Medicare Advocacy explained that Medicare coverage for care and discharge from SNFs are two distinct issues, each with its own set of rules and due process rights.[1]  This Alert provides new information from the Centers for Medicare & Medicaid Services (CMS) related to the coronavirus pandemic and its effects on SNF coverage and discharges. We then discuss longstanding coverage rules, with updated regulatory citations and edits.

1. New Information

Medicare Coverage

Medicare Part A coverage is now enlarged for some beneficiaries in traditional Medicare.  In light of the pandemic, CMS has waived certain rules for Medicare Part A coverage of SNF stays.  Most relevant here, residents may be able to extend Medicare coverage even if they used their entire 100-day benefit.  In addition, individuals can be admitted to a SNF for a Part A stay without a prior three-day inpatient hospital stay; they can be admitted after a shorter inpatient hospital stay or an observation status hospital stay or even directly from the community if they meet Medicare’s other requirements and need skilled nursing or skilled rehabilitation services.[2]

Moving Patients Within and Between Facilities

In light of the pandemic, CMS is allowing SNFs to move residents within and between facilities without giving them advance notice and appeal rights (discussed below).  However, CMS explicitly states that waivers of advance notice and hearing rights apply only when a SNF is moving residents for purposes of cohorting residents, within a facility or between facilities, during the coronavirus pandemic.[3]  SNFs must follow advance notice and hearing rights in all other situations, as usual.  The Center for Medicare Advocacy is concerned that waiver of resident rights will, in actual practice, extend beyond the permissible justification for cohorting residents.

2. Medicare SNF Coverage and Appeals

A SNF’s statement that Medicare will not cover a resident’s continued stay is only a statement by the facility, not a formal Medicare decision.  A resident has the right to have the Medicare program decide whether his or her stay is covered or not.  Two types of appeals are available: the expedited appeal process, which is intended to keep Medicare-covered services in place without interruption, and the standard appeal, which authorizes a resident to seek Medicare payment for covered services that were provided.  These two types of appeals have different notices and residents are entitled to receive both.[4]

Expedited Appeal, 42 C.F.R. §405.1202

The purpose of an expedited appeal is to keep services in place.  The SNF must give notice to the beneficiary at least two days prior to termination of all Part A services when the beneficiary still has days left in the benefit period,[5] using the Notice of Medicare Non-Coverage, Form CMS-10123, to inform the beneficiary of how to request an expedited redetermination and, if the beneficiary seeks an expedited determination, the Detailed Explanation of Non-Coverage (DENC), Form CMS-10124.[6]

In order to request an expedited appeal, the resident or family must call the Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO), by no later than noon the following day.[7]  The beneficiary has the right to submit evidence to the BFCC-QIO. There are two BFCC-QIOs serving different parts of the country – KEPRO[8] and Livanta.[9]

Medicare-covered care continues until the day of discharge identified in the SNF notice, unless the BFCC-QIO reverses the SNF’s determination.[10]
If the SNF does not provide timely information to the BFCC-QIO, it may be financially responsible for providing covered care to the beneficiary.[11]  If the BFCC-QIO finds that the SNF’s notice was not valid, coverage continues until at least two days after valid notice is provided.[12] The burden of p

When the BFCC-QIO notifies the SNF that a beneficiary has initiated an expedited appeal, the SNF must send a detailed notice, the DENC, to the beneficiary by the close of the business day. This notice must include:

• “A specific and detailed explanation why services are either no longer reasonable and necessary or are no longer covered.”[14]
• “A description of any applicable Medicare coverage rule, instruction, or other Medicare policy,” with citations.[15]
• “Facts specific to the beneficiary and relevant to the coverage determination . . . .”[16]

The SNF must also provide the BFCC-QIO with the information it needs[17] and, at the beneficiary’s request, must provide the beneficiary with a copy of, or access to, information it provided to the BFCC-QIO.[18]
The BFCC-QIO must:

• Determine whether the SNF notice was valid;
• Examine records submitted by the SNF;
• Solicit the views of the beneficiary who requested the expedited hearing;
• Provide an opportunity for the provider/practitioner to explain why termination of services was appropriate; and
• Within 72 hours, notify the beneficiary, the beneficiary’s physician, and the SNF of its determination.[19]

The BFCC-QIO must inform the beneficiary of its decision within 72 hours.  Telephone notification, while permitted, must be followed by written notification describing the rationale for the decision, an explanation of the Medicare payment consequences, and information about how to request Reconsideration (the next level of appeal).[20]

A beneficiary is unlikely to prevail in any appeal without strong physician support. A physician letter providing detailed, specific, and personal information about the beneficiary and the reasons why continued coverage is medically necessary is most helpful.  If the basis for the SNF’s decision is its contention that the beneficiary “plateaued” or is unlikely to improve further, the beneficiary should bring to the BFCC-QIO’s attention that this basis for “discharge” is prohibited under the settlement in Jimmo v. Sebelius.[21]  Jimmo confirms that Medicare pays for care for a beneficiary who needs professional nursing or therapy services, or both, to maintain function or to prevent or slow the beneficiary’s decline or deterioration.[22]  Services cannot be discontinued for lack of improvement in most cases. The settlement applies nationwide to SNFs, home health, and outpatient therapy (physical, occupational, and speech therapy).

The next level of Expedited Appeal is the Reconsideration which is handles by the Qualified Independent Contractor (QIC). See, 42 C.F.R. §405.1204). The Reconsideration has similar procedures to the Expedited review by the BFCC-QIO.  The beneficiary may request up to 14 days’ additional time.[23]  However, if the QIC grants additional time, it is not required to inform the beneficiary, physician, and provider of its decision within 72 hours, as otherwise required for expedited reconsideration.[24]

Standard Appeal

As a result of the May 1989 settlement in Sarrassat v. Bowen,[25] a SNF must give the beneficiary written notice when it makes a determination that Medicare will not pay for the beneficiary’s care.  This notice, a SNF Advance Beneficiary Notice (SNF ABN, form CMS-10055),[26] may be given at the initiation, reduction, or, as relevant for this discussion, termination of Part A-covered care in traditional Medicare for level of care reasons.  The SNF must file the claim with Medicare when requested by a beneficiary, and may not charge the resident for Part A services until CMS makes an initial determination.[27]

In 2009, CMS clarified that the SNF ABN is separate from the notices required in expedited appeals and that a SNF must give the resident the SNF ABN (in 2009, a CMS Denial Letter could be used instead of the SNF ABN) to “fulfill the provider’s obligation to advise the beneficiary of potential liability for payment.”[28]  If the SNF fails to provide this notice to the beneficiary, it may not shift the costs of care to the beneficiary.[29]

3. Transfer and Discharge, Nursing Home Reform Law

The federal Nursing Home Reform Law (1987) provides that a SNF (or nursing facility[30]) must permit each resident to remain in the facility and must not transfer or discharge the resident from the facility unless –

(i) The transfer or discharge is necessary to meet the resident’s welfare and the resident’s welfare cannot be met in the facility;

(ii) The transfer or discharge is appropriate because the resident’s health has improved sufficiently so [that] the resident no longer needs the services provided by the facility;

(iii) The safety of individuals in the facility is endangered;

(iv) The health of individuals in the facility would otherwise be endangered;

(v) The resident has failed, after reasonable and appropriate notice, to pay…for a stay at the facility; or

(vi) The facility ceases to operate.[31]

The regulations closely track the language of the law.  42 C.F.R. §483.15(c).
The SNF must give the resident advance written notice of its intention to transfer or discharge the resident.[32]  The notice must explain the reason for the proposed transfer or discharge,[33] advise the resident of the right to a state hearing to contest the transfer or discharge,[34] and provide the name, mailing address, and telephone number of the State long-term care ombudsman.[35]  If the resident has resided in the facility for 30 or more days, the SNF must generally give the resident 30 days’ advance written notice of the transfer or discharge.[36]

SNFs must also conduct “sufficient preparation and orientation to residents to ensure safe and orderly transfer or discharge from the facility.”[37]

If Medicare does not pay for a resident’s stay, the resident must have another source of payment, typically out-of-pocket payments or Medicaid.

Note: New Clarification from CMS:  The 2016 revised Requirements of Participation strengthen resident protections.  They confirm that a resident may not be transferred while an appeal is pending[38] and clarify that “Non-payment applies if the resident does not submit the necessary paperwork for third party payment or after the third party, including Medicare or Medicaid, denies the claim and the resident refuses to pay for his or her stay.”[39] The rules prohibit the discharge of a resident from a facility while a Medicaid application is pending.

Conclusion

Medicare notice and appeal issues are confusing and complex. The key points are that Medicare beneficiaries are entitled to have Medicare, not the facility, determine whether the beneficiary’s care is covered by Medicare; a SNF must give a beneficiary the proper notices (in expedited and standard appeals) and must provide information to the BFCC-QIO (in expedited appeals) or else it is responsible for the costs of the beneficiary’s care; and even if Medicare does not pay for the care, a resident has the right to remain in the SNF (if the resident has another source of payment).

The coronavirus pandemic has led CMS to waive certain advance notice and hearing rights established by the Nursing Home Reform Law, but only when the purpose is to cohort residents during the pandemic. For other reasons, facilities must continue to provide advanced written notice and hearing rights to residents.

Advocates are asking CMS to prohibit involuntary transfers for all other reasons. To date, CMS has not responded to this request.
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See Footnotes online at www.medicareadvocacy.org/medicare-skilled-nursing-facility-coverage-discharges-and-transfers-during-the-covid-crisis/