NAHA -- National Alliance for Hospice Access

Welcome to NAHA: True Hospice Reform

CMS BOWS TO FEDERAL COURTS – BUT HOSPICES MUST OPT FOR CORRECT CAP CALCULATION

Read Ruling CMS Quietly Issued on April 14, 2011 Allowing Recalculation of Cap Demands, But Only If Hospice Timely Appeals

Following losses in more than a dozen district courts and two Federal Courts of Appeals (Lion Health and Haven Hospice), CMS recently posted a Ruling designed to stem the flow of hospice cap appeals to the Federal district courts.

In the Ruling, CMS provides that any hospice that timely appeals a hospice cap demand (within 180 days) to the Provider Reimbursement Review Board (PRRB) will receive a remand to the fiscal intermediary for recalculation. Per the Ruling, the recalculation is to be done using a “patient-by-patient proportional methodology” that is based upon days of service in each year in question. CMS provides that the fiscal intermediary will then issue a “new” demand.

The proportional methodology required on remand now appears for the first time to be consistent with the statutory mandate to reduce the number of beneficiaries “to reflect the proportion of hospice care that each such individual was provided in a previous or subsequent accounting year.” 42 U.S.C. 1395f(i)(2)(C).

Hospices should understand the following:

CMS will continue to use, for now, the unlawful regulation to calculate cap liability in the first instance.
Spreadsheets filed in numerous cases show that this method tends to misallocate allowances to earlier years and results in overstated cap liability.
Hospices that wish to have the law applied correctly, via a proportional allocation of beneficiary allowances, must file an appeal with the PRRB within 180 days of the demand.

NAHA believes that CMS should have done more, specifically:

Rescinded the unlawful regulation and replaced it with a true proportional allocation, honoring its duty to “faithfully execute the laws” for everyone.
Affirmatively acknowledged that the current regulation tends to overstate cap liability.
Affirmatively allowed (rather than remaining silent upon) hospices to request to reopen for recalculation any demand issued within the past three years.

At the very least, NAHA calls upon CMS to send a copy of the Ruling to every hospice that has received a cap demand in the last 180 days, and to every hospice that receives a new or amended demand in future under the existing regulation.

Meanwhile, NAHA urges hospices to remain vigilant and seriously consider timely-appealing every hospice cap demand.

Hospices that have questions about this Ruling should contact:

Brian M. Daucher, Esq.

Sheppard Mullin Richter & Hampton LLP

714 424 2843

bdaucher@smrh.com

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HOSPICE CAP LITIGATION UPDATE: 5^th and 9^th CIRCUITS BOTH AFFIRM CAP REGULATION UNLAWFUL

On March 11, 2011, the 5^th Circuit Court of Appeals affirmed the key holdings in Lion Health Services v. Sebelius (N.D. Tx. 2010) including that: (a) the hospice cap regulation is unlawful as contrary to Federal statute, confirming that the statute “unambiguously requires the Secretary to use a strict proportional method” for allocating beneficiaries; and (b) the district court properly enjoined both collection on prior demands and issuance of any new demands under the regulation.

Four days later, on March 15, 2011, the 9^th Circuit Court of Appeals joined the 5^th Circuit, affirming key holdings in Los Angeles Haven Hospice v. Sebelius (C.D. Cal. 2009) including that: (a) the regulation is unlawful; (b) hospices subject to demands have the right to challenge the regulation without having to offer a hypothetical spreadsheet showing alternative results; and (c) the district court properly enjoined further application of the regulation to the hospice in suit.

(The 9^th Circuit failed to uphold the nationwide injunction issued by the District Court in Haven, but made it clear that it expects the Secretary to cease use of the regulation in the Circuit. This forces hospices to continue to individually challenge Medicare in court about the unlawful regulation just to secure faithful execution of the laws.)

Nonetheless, hospices now in 12 states (including Alaska, Arizona, California, Texas, Nevada, Hawaii, Idaho, Louisiana, Mississippi, Montana, Oregon, and Washington) should promptly benefit from the ruling, as it resolves for these Circuits the invalidity of the regulation, the unlawful nature of demands there under, and rejects HHS efforts to impose heightened burdens of proof on Medicare providers challenging unlawful regulation.

At oral arguments in both cases, the Secretary suggested that if the regulation were held invalid, the agency would cease further application of the regulation in the affected Circuit. This should mean both that the Secretary will cease further collection of timely-appealed demands by hospices in these Circuits and will not issue any more demands under the unlawful regulation to hospices in these Circuits.

The Secretary must also consider the question why hospices in one Circuit should be treated differently than hospices everywhere else, especially in a case like this where more than a dozen courts, without a single exception, and now two courts of appeal have found the regulation unlawful.

NAHA again calls upon the Secretary to immediately suspend the regulation and cease further collection of all timely-appealed repayment demands there under.

REMINDER:

NAHA also reminds all hospices that they still should immediately appeal any cap demand they receive, including any amended demand. Appeal time is limited to only 180 days. For more information, we suggest that you contact counsel for Lion Health (and numerous other hospices): Brian M. Daucher, Sheppard Mullin; 714 424 2843 (bdaucher@smrh.com).

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BUT … LEGISLATIVE REFORM REMAINS A MUST!

INDEPENDENT HOSPICES AND THE TERMINALLY ILL PATIENTS WE SERVE NEED YOUR SUPPORT FOR TRUE HOSPICE REFORM LEGISLATION, HR3454 MEDICARE HOSPICE REFORM AND SAVINGS ACT OF 2009

The National Alliance for Hospice Access (NAHA) is a non-profit, grassroots coalition of over 500 hospices, founded to promote true hospice reform, and specifically to address the Hospice Cap Crisis, a regulatory disaster that threatens hospices’ ability to continue to provide quality care to eligible, terminally ill patients.

NAHA members are independent family-owned and community-based hospices that care for tens of thousands of terminally ill seniors annually, largely in rural, minority and economically disadvantaged communities. NAHA is funded by contributions from independent hospices and from individual hospice advocates; our staff are part-time, unpaid volunteers.

NAHA hospices don’t have deep pockets, cannot meet CMS demands to repay money spent years ago caring for eligible, terminally ill seniors, and will not survive without urgent action by Congress.

THE PROBLEM…

Too few of our terminally ill seniors receive a timely hospice choice, and Medicare’s end-of-life care costs are billions of dollars per year higher than they should be. Choice is especially poor in rural and minority communities, and for the 78% of seniors who die from non-cancer causes. Only 7% of our terminally ill seniors receive between 60 and 180 days of hospice care, the range in which quality care and cost-effectiveness best coincide.

And, the Hospice Cap is now devastating hundreds of independent hospices who provide quality, cost-effective end-of-life care to tens of thousands of seniors in underserved rural, minority and economically-disadvantaged communities. Conflicting federal laws and Medicare regulations are forcing hundreds of quality independent hospices into bankruptcy, causing thousands of high-quality jobs to disappear, solely because their eligible patients “live too long.”

1998 federal law promises terminally ill seniors unlimited hospice days

But, the 1982 hospice cap law demands huge retroactive repayments from hospices whose patients “live too long”

Making a bad 1982 law worse, CMS is still using a 1983 regulation that overstates cap repayment demands and has been ruled invalid by ten different federal courts

And, Medicare’s own hospice eligibility criteria are not evidence-based, are seriously flawed and further harm timely hospice choice

THE SOLUTION

NAHA supports hospice reform legislation that will improve patient access, stabilize independent hospices, and save taxpayers billions of dollars.

Introduce evidence-based patient eligibility criteria for hospice care that will improve timely patient choice and save Medicare more than $5 billion over the next 5 years.

Reform the existing, flawed cap with a “pay as you go” savings system that:

more efficiently eliminates any unintended financial incentive for longer patient stays, and generates an additional $1.6 billion in Medicare cost savings over 5 years

dramatically reduces Medicare’s administrative burden, and eliminates delays in realizing the savings, by never paying out money that Medicare will later want repaid

Reallocate per diem reimbursement to better reflect hospice costs for the first and last days of a patient’s hospice stay and repeal the phase-out of the hospice Budget Neutrality Adjustment Factor (BNAF).