Jimmo et al v. Health and Human Services Secretary

Filing 115

OPINION AND ORDER Adopting Defendant's Corrective Action Plan and Mandating Two Additional Requirements (Docs. 111 - 114 ). The court HEREBY ORDERS the Secretary to implement her corrective action plan with the two additional requirements: ( 1) the inclusion of the Corrective Statement; and (2) a national call that includes the Corrective Statement and the notice required by the court. The Secretary shall certify compliance with this court's Order no later than September 4, 2017. Signed by Chief Judge Christina Reiss on 2/1/2017. (pac)

U.S. DISTRICT COURT

DISTRICT OF VERt10NT
FILED

UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF VERMONT
GLENDA JIMMO, et al.,
Plaintiffs,
v.

SYLVIA MATHEWS BURWELL, Secretary
of Health and Human Services,
Defendant.

)
)
)
)
)
)
)
)
)
)
)

2011 fEB -I PH
CLERK

BY

t&L

OEFUTY CLERK

Case No. 5:11-cv-17

OPINION AND ORDER ADOPTING DEFENDANT'S CORRECTIVE ACTION
PLAN AND MANDATING TWO ADDITIONAL REQUIREMENTS
(Doc. 111-114)
This matter comes before the court on the parties' submissions regarding the
appropriate corrective action plan to be ordered in light of the court's conclusion that the
Secretary breached the parties' Settlement Agreement. See Doc. 106 (August 17, 2016
Opinion and Order GRANTING IN PART and DENYING IN PART Plaintiffs' motion
for resolution of noncompliance with the Settlement Agreement) (the "August 17, 2016
Opinion and Order"); Jimmo v. Burwell, 2016 WL 4401371 (D. Vt. Aug. 17, 2016).
Plaintiffs are represented by David J. Berger, Esq., Matthew R. Reed, Esq., the
Center for Medicare Advocacy, Inc., and Vermont Legal Aid, Inc. The Secretary is
represented by Assistant United States Attorney M. Andrew Zee, Assistant United States
Attorney Steven Y. Bressler, and Special Assistant United States Attorney Tamra Moore.

I.

Factual and Procedural Background.
A.

~:

The Jimmo Class Action.

On January 18, 2011, six individual Medicare beneficiaries (the "Individual
Plaintiffs") and seven national organizations (the "Organizational Plaintiffs")
(collectively, "Plaintiffs") filed a class action suit in the District of Vermont against the
Secretary, alleging, among other things, that the Secretary "impose[ d) a covert rule of

35

thumb that operate[ d] as an additional and illegal condition of coverage and result[ ed] in
the termination, reduction, or denial of coverage for thousands of Medicare beneficiaries
annually." (Doc. 13 at 2, ~ 1.) Plaintiffs alleged this covert rule of thumb improperly
imposed an "improvement standard," whereby coverage for certain home health care
services was denied if a beneficiary's condition had not improved (the "Improvement
Standard"). !d. at ~ 2. Plaintiffs further alleged that because of the Improvement
Standard, Medicare contractors and adjudicators were denying Medicare coverage merely
because a patient was unlikely to improve, or in retrospect failed to improve, even when
the patient needed skilled care to maintain his or her condition or prevent or slow further
deterioration.
The Secretary moved to dismiss Plaintiffs' claims on a number of grounds,
including that they failed to allege a plausible ground for relief. The court granted the
motion to dismiss in part and denied it in part. See Jimmo v. Sebelius, 2011 WL
5104355, at* 1 (D. Vt. Oct. 25, 2011). Thereafter, without admitting liability or any
wrongdoing, the Secretary agreed to settle Plaintiffs' claims in accordance with the terms
and conditions of the Settlement Agreement. The court approved the Settlement
Agreement at a January 24,2013 fairness hearing under Fed. R. Civ. P. 23(b)(2).
B.

The Settlement Agreement.

Pursuant to the Settlement Agreement, the parties agreed to a "maintenance
coverage standard" which provides that "[ s]killed nursing services would be covered
where such skilled nursing services are necessary to maintain the patient's current
condition or prevent or slow further deterioration so long as the beneficiary requires
skilled care for the services to be safely and effectively provided." (Doc. 82-1 at 13,
§ IX.7.a.) (the "Maintenance Coverage Standard"). 1

1

To receive Medicare benefits for home health care services, a beneficiary must be: (a) confined
to the home; (b) under the care of a physician; (c) in need of skilled services; and (d) under a
plan of care. 42 C.F.R. § 409.42(a)-(d). "Nothing in [the] Settlement Agreement modifies,
contracts, or expands the existing eligibility requirements for receiving Medicare coverage[.]"
(Doc. 82-1 at 9, § IX.2.)
2

The Settlement Agreement required the Secretary to make certain revisions to the
Medicare Beneficiary Policy Manual ("MBPM") to reflect the Maintenance Coverage
Standard. In its August 17, 2016 Opinion and Order, the court concluded that the
Secretary has fulfilled these obligations.
The Settlement Agreement also required 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 [skilled nursing facility
("SNF")], home health, and [outpatient therary services ("OPT")] maintenance coverage
standards and the [inpatient rehabilitation facility] coverage standards[.]" (Doc. 82-1 at
14, § IX.9.) The Settlement Agreement provided that although Plaintiffs' counsel would
be consulted and could provide input, "CMS shall retain final authority as to the ultimate
content of the written educational materials" and the "PowerPoint slides" used in the
Educational Campaign. Id. at 16-17, §§ IX.12, IX.14.
The Settlement Agreement provides that the court will retain jurisdiction for
thirty-six months after the conclusion of the Secretary's Educational Campaign to
"enforc[ e] the provisions of the Settlement Agreement in the event that one of the Parties
claims that there has been a breach of any of those provisions[.]" Id. at 6, § Vl.3.
On March 1, 2016, after complying with the Settlement Agreement's dispute
resolution process, Plaintiffs filed a motion to enforce the Settlement Agreement. In
support of their motion, Plaintiffs argued that the Secretary did not adequately disavow
the Improvement Standard or disseminate the Maintenance Coverage Standard and that
the Secretary's Educational Campaign was so confusing and inadequate that little had
changed as a result of the Jimmo settlement. Among other things, Plaintiffs asked the
court to require the Secretary "to carry out additional educational activities to address the
inaccuracies and inadequacies of the original [Educational] Campaign." (Doc. 94-1 at
25.)
In its August 17, 2016 Opinion and Order, the court granted in part and denied in
part Plaintiffs' motion to enforce, holding that:
3

the Secretary failed to fulfill the letter and spirit of the Settlement
Agreement with respect to at least one essential component of the
Educational Campaign. Plaintiffs have provided persuasive evidence that
at least some of the information provided by the Secretary in the
Educational Campaign was inaccurate, nonresponsive, and failed to reflect
the maintenance coverage standard.
(Doc. 106 at 18.)
Thereafter, the parties negotiated extensively at arms-length and in good faith to
reach an agreed upon corrective action plan. When they were unable to reach a
consensus, each party submitted a proposed corrective action plan accompanied by a
memorandum explaining why the court should adopt the party's plan.
C.

The Proposed Corrective Action Plans.
1.

Plaintiffs' Proposed Corrective Action Plan:

1.
Jimmo Webpage: CMS will develop and launch a webpage
dedicated exclusively to the Jimmo Settlement and its implementation. The
webpage would include, inter alia, a web portal to which questions could
be submitted for consideration by CMS and a section of Frequently Asked
Questions (F AQs ), which would be updated on a scheduled basis.
2.
Written Statements about Jimmo: A clear statement about the
changes (not mere "clarifications") created by the Jimmo Settlement,
including an explicit statement that the maintenance coverage standard is a
change in policy and practice for providers and adjudicators and an
announcement of a new "Jimmo webpage," would be transmitted to
stakeholders immediately after initiation of the webpage. The same
statement would appear at the beginning of the webpage.
3.
Oral Statements at Open Door Forums: A statement similar to that in
No.2 above would be read at the beginning of at least eight Open Door
Forums scheduled after the website was launched.
4.
National Call: A new National Call for contractors and adjudicators
would be held.
5.
New Trainings: New trainings would be held for the staffs of
Medicare Administrative Contractors (MACs) and Medicare Advantage
Organizations (MAOs), for which plaintiffs' counsel would have the
opportunity to review the training materials and to make suggestions about
them and to listen in on the training.
6.
Additional Monitoring: Monitoring of the corrective action plan
would continue beyond January 2017 and would include in-person
4

meetings of counsel to review questions that have been raised and to
develop appropriate new FAQs.
(Doc. Ill at 6-7.)
2.

The Secretary's Proposed Corrective Action Plan:

1.
CMS will disavow the application of the so-called "Improvement
Standard" as improper under Medicare policy for the SNF, HH, and OPT
benefits, while making clear that CMS has consistently denied the existence
of such an "Improvement Standard." This disavowal would appear on the
forthcoming Jimmo webpage and in the transmittal message notifYing
stakeholders of the webpage.
2.
CMS is willing, through counsel, to notifY Plaintiffs and the [c]ourt
once the Technical Direction Letter and Health Plan Management System
memorandum have been issued to, respectively, Medicare Administrative
Contractors (MACs) and Medicare Advantage Organizations (MAOs).
3.
CMS will publish on its website cms.gov a new webpage dedicated
to the Jimmo settlement. The Jimmo webpage will, in one location, provide
access to public documents related to the settlement that have been
previously posted on the cms.gov website. In addition, the Jimmo webpage
will direct providers and suppliers with questions regarding individual
claims to the appropriate MAC. CMS will include at the top of the new
Jimmo webpage a message about the settlement. This message will
summarize the clarifications to Medicare policy that CMS has issued as
part of the settlement. Once the Jimmo webpage is published, CMS will
notifY stakeholders of the webpage through existing communication
channels and advise stakeholders seeking information about the settlement
to visit the webpage. Before the new Jimmo webpage message is finalized,
CMS will provide Plaintiffs' Counsel with a two-week period in which to
provide comments on an advance version of the message. CMS will
consider any comments received from Plaintiffs' Counsel.
4.
CMS will post on the forthcoming Jimmo webpage one set of
Frequently Asked Questions (F AQs ). This document would be developed
by CMS and would include multiple questions and answers regarding the
policy clarification resulting from the Jimmo settlement. CMS will provide
Plaintiffs' Counsel with an opportunity to suggest potential questions for
inclusion in the FAQ posting, which CMS will consider but would not be
bound to accept.
5.
CMS will include a message regarding the Jimmo settlement when it
announces the publication of the Jimmo webpage to providers, adjudicators,
contractors, and other stakeholders.

5

6.
CMS will clarify the responses in the document entitled "Summary
of the questions posed and answers provided during the December 16, 20 13
Jimmo vs. Sebelius National Call for contractors and adjudicators" to
address the concerns identified by the [c]ourt in its August 17,2016
Opinion and Order. CMS will disseminate the Clarified Summary to
contractors and adjudicators using the same communication channels as
were used for the original Summary. CMS will make clear to contractors
and adjudicators that the information contained in the Clarified Summary
supersedes the information contained in the original Summary. Before the
Clarified Summary is finalized, CMS will provide Plaintiffs' Counsel with
a two-week period in which to provide comments on an advance version of
the Clarified Summary. CMS will consider any comments received from
Plaintiffs' Counsel but would not be bound to accept them.
7.
CMS will issue a Technical Direction Letter to MACs directing
them to conduct, within a specified timeframe, additional training on the
Jimmo manual clarifications. CMS would provide the MACs with
materials for use in conducting this training.
8.
CMS will issue a Health Plan Management System memorandum to
MAOs requesting that they conduct, within a specified timeframe,
additional training on the Jimmo manual clarifications. CMS would
provide the MACs with materials for use in conducting this training.
9.
CMS will disavow the application of the so-called "Improvement
Standard" as improper under Medicare policy for the SNF, HH, and OPT
benefits, while making clear that CMS has consistently denied the existence
of such an "Improvement Standard." This disavowal would appear on the
forthcoming Jimmo webpage and in the transmittal message notifying
stakeholders of the webpage.
10.
CMS is willing, through counsel, to notify Plaintiffs and the [c]ourt
once the Technical Direction Letter and Health Plan Management System
memorandum have been issued to, respectively, Medicare Administrative
Contractors (MACs) and Medicare Advantage Organizations (MAOs).
(Doc. 112-1 at 3-4.)
II.

Legal Analysis and Conclusions.
The court's authority to enforce the Settlement Agreement is not unlimited. It

cannot impose new obligations ~he parties have not bargained for, correct any disparity in
bargaining power, or devise its own scheme for implementing the Jimmo settlement. The
Secretary has offered to undertake certain educational activities beyond those required by
the Settlement Agreement in order to correct the deficiencies the court found in the
6

Educational Campaign. Plaintiffs offer a more expansive list of educational activities and
ask the court to order that certain obligations be continuing in nature. For example,
Plaintiffs argue that CMS should be required to create a Jimmo webpage that is
"dynamic, not static, with [P]laintiffs participating in the creation ofFAQs and new
FAQs as developments demand. A web portal for questions should be added to the
webpage." (Doc. 114 at 7.) Plaintiffs were free to negotiate for this relief in the
Settlement Agreement. No reasonable interpretation of the Settlement Agreement could
be deemed to include it. It is therefore beyond the court's authority to require it.
Plaintiffs' suggestion that "additional training should not be left to the Secretary
for her unilateral development; [P]laintiffs should be allowed to participate" warrants a
similar response. !d. The court does not have the authority to order the Secretary to
allow Plaintiffs to participate in her training. Provided the Secretary offers accurate
guidance regarding the Maintenance Coverage Standard and affirmatively disavows the
Improvement Standard, she retains the discretion to determine the content of the training
she has agreed to undertake.
Finally, the court's jurisdiction over the Settlement Agreement does not extend to
monitoring of indeterminate duration. It is therefore sufficient if the Secretary certifies
the completion with the relief ordered herein. The court has considered each of
Plaintiffs' remaining requests for corrective action and concludes that those requests
require a different and more extensive Educational Campaign than the Settlement
Agreement authorizes.
For the foregoing reasons, with the exceptions set forth, the court hereby ADOPTS
the Secretary's proposed corrective action plan and ORDERS its completion on or before
September 4, 2017. The court hereby ORDERS the Secretary's corrective action plan to
including the following two additional requirements.
First, the parties agree that a statement disavowing the Improvement Standard and
explaining the Maintenance Coverage Standard is an essential component of any
corrective action plan. They have, however, been unable to reach a consensus as to the
content of this statement. The Secretary's proposal that she draft a statement and then
7

solicit the non-binding comments of Plaintiffs' counsel is unlikely to resolve the parties'
dispute as it merely replicates the negotiations that have prompted the current stalemate.
Simply put, in light of the parties' dispute resolution history, the court finds little
likelihood that the parties will reach an agreement as to the content of the corrective
statement.
Plaintiffs propose a statement that is generally accurate. To date, Defendant has
not pointed to any aspect of Plaintiffs' proposed statement that is either inaccurate or
misleading. Instead, Defendant asserts only that "there is no need to include a subjective,
history critique of allegedly 'erroneous' beliefs of certain providers, adjudicators, and
contractors" and there is no need to "stray from the terms of the [Settlement] Agreement
to introduce such undefined concepts as 'equal coverage' for so-called 'improvement and
maintenance' care." (Doc. 113 at 7-8.) The court agrees with the latter contention and
disagrees with the former.
The concept of "equal coverage" may add an element of confusion without
clarifying whether and when the Maintenance Coverage Standard applies. It is therefore
both unnecessary and potentially confusing surplusage. In contrast, the Secretary's
disavowal of the Improvement Standard should be part of any corrective statement.
Plaintiffs' proposed statement reflects this disavowal in non-inflammatory terms that
accurately reflect the confusion over the use of the Improvement Standard which gave
rise to their lawsuit. In their motion to enforce the Settlement Agreement, Plaintiffs
persausively demonstrated that confusion over the Improvement Standard persists. In
such circumstances, an affirmative disavowal of the Improvement Standard in an accurate
historical context is warranted.
Accordingly, subject to Defendant's right to object within fourteen (14) days of
this Order, the court hereby ADOPTS IN PART Plaintiffs' proposed statement as
follows:
The Centers for Medicare & Medicaid Services reminds the Medicare
community of the Jimmo Settlement Agreement (January 2014), which
clarified that the Medicare program will pay for skilled nursing care and
skilled rehabilitation services when a beneficiary needs skilled care in order
8

to maintain function or to prevent or slow decline or deterioration (provided
all other coverage criteria are met). Specifically, the Jimmo Settlement
adopted a "maintenance coverage standard" for both skilled nursing and
therapy services:
Skilled nursing services would be covered where such skilled
nursing services are necessary to maintain the patient's
current condition or prevent or slow further deterioration so
long as the beneficiary requires skilled care for the services to
be safely and effectively provided.
Skilled therapy services are covered when an individualized
assessment of the patient's clinical condition demonstrates
that the specialized judgment, knowledge, and skills of a
qualified therapist ("skilled care") are necessary for the
performance of a safe and effective maintenance program.
Such a maintenance program to maintain the patient's current
condition or to prevent or slow further deterioration is
covered so long as the beneficiary requires skilled care for the
safe and effective performance of the program.
The Jimmo Settlement may reflect a change in practice for many providers,
adjudicators, and contractors, who may have erroneously believed that the
Medicare program pays for nursing and rehabilitation only when a
beneficiary is expected to improve. The Settlement correctly implements
the Medicare program's regulations governing maintenance nursing and
rehabilitation in skilled nursing facilities, home health services, and
outpatient therapy (physical, occupational, and speech) and maintenance
nursing and rehabilitation in inpatient rehabilitation hospitals for
beneficiaries who need the level of care that such hospitals provide. These
regulations are set forth in the Medicare Benefit Policy Manual.
(Doc. 111 at 8-9) (the "Corrective Statement"). The Corrective Statement shall be
included on the Jimmo webpage, in the FAQs, and in the written materials and oral
statements the Secretary has agreed to disseminate as part of her corrective action plan.
Second, because the Secretary's "Summary of the questions posed and answers
provided during the December 16, 2013 Jimmo vs. Sebelius National Call for contractors
and adjudicators" (the "Summary") (Doc. 94-15) gave rise to the court's determination
that the Settlement Agreement had been breached, the errors in the Summary must be
corrected. The Secretary argues that a corrected Summary will suffice. She further
argues that, in light of the passage of time, a corrective national call will only increase
9

confusion. Plaintiffs counter that because the Summary merely highlights the erroneous
information provided in the December 16, 2013 national call, a new and accurate national
call should take place.
A transcript of the national call was not provided to the court. The court must
therefore proceed on the assumption that the Summary reflects certain erroneous and
misleading information provided by the Secretary in the national call. Based on this
assumption, the court agrees that a corrected Summary will not cure the deficiencies in
the national call. The court therefore ORDERS that, after providing at least fourteen (14)
days' notice to Plaintiffs' counsel, the Secretary shall hold a national call in which the
Corrective Statement is orally disseminated. Nothing precludes the Secretary from
including other subject matters in the national call. Notice of the national call shall
include the following statement: "This call will include corrective action mandated by the
court overseeing the Jimmo settlement, clarifying the rejection of an improvement
standard and explaining the maintenance coverage standard now included in the
Medicare Beneficiary Policy Manual." Such notice will alleviate any potential confusion
regarding the purpose of the national call.
In all other respects, the court finds that the Secretary's corrective action plan will
cure its breach of the Settlement Agreement and fulfill its remaining obligations for an
Educational Campaign set forth therein.

10

CONCLUSION

For the foregoing reasons, the court hereby ORDERS the Secretary to implement
her corrective action plan with the two additional requirements: (1) the inclusion of the
Corrective Statement; and (2) a national call that includes the Corrective Statement and
the notice required by the court. The Secretary shall certifY compliance with this court's
Order no later than September 4, 20 17.

sf-

SO ORDERED.

Dated at Burlington, in the District of Vermont, this _l_ day of February, 2017.

em~

United States District Court

11