Medicare Advantage (MA) companies continue to be a hot topic in the news, as their market penetration continues to increase despite ongoing concerns regarding denials and beneficiary access to care.
A U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) report released in April 2022 stated that “a central concern in the capitated payment model used in Medicare Advantage is the potential incentive for Medicare Advantage Organizations (MAO) to deny beneficiary access to services and deny payments to providers in an attempt to increase profits.”
This report likely led to a rapid response from the Centers for Medicare & Medicaid Services (CMS) in issuing rule 4201, which was proposed and then finalized in only four months. The central tenet of the rule was codifying existing manual language regarding not only the two-midnight rule, but expanding on existing regulations found at 42 CFR 422.101, which states that Medicare Advantage must provide equal or better benefits than a beneficiary would receive with traditional Medicare. While much of the conversation has centered around status determinations, it also applies to beneficiary access to post-acute care.
I recently gave a presentation at the National Physician Advisor Conference, and it was apparent that attendees were struggling with post-acute care (PAC), and specifically, skilled nursing facility (SNF) denials. During peer-to-peer conversations, it came to my attention that MA plans are denying based on criteria such as how far the patient ambulated or whether they required IV infusions such as antibiotics. It is critical that care management (CM) and physician advisors understand the actual medical necessity requirements for SNF transfer under traditional Medicare to effectively advocate for our patients and appeal these inappropriate denials.
Central to the understanding of medical necessity for SNFs is the understanding of skilled care. Conceptually, this can be difficult to see in a hospital setting, as there are no “non-skilled” personnel and the patients are acutely ill, but it becomes much more important as we move into the PAC space, where the patients have generally stabilized, and the focus is more on recovery. Skilled care is care rendered by medical professionals such as nurses and therapists, specifically ordered by a provider. Determination of skilled need is not via a specific diagnosis, nor is it based on the potential or likelihood of recovery. The care can be medically necessary to improve a patient’s condition or to prevent further decline in a patient’s condition. It is important to remember that some services that would ordinarily not be considered skilled can be considered skilled based on a patient’s condition or medical complications. If the care requires the supervision of nursing or rehabilitation personnel, it can be considered skilled care. Understanding the difference between skilled and non-skilled care is critical when discussing medical necessity for SNFs. Generally, the alternative to skilled care is custodial care, which is non-medical care that could be provided by non-licensed caregivers. The below table illustrates some of the important differences between skilled and custodial care.
The importance of understanding the difference between skilled care and non-skilled care is seen when we look at Medicare’s SNF requirements for medical necessity. Despite what Medicare Advantage has led us to believe, based on their inappropriate denials, the requirements are quite simple, and found at 42 CFR 409.31, which states that transfer to a skilled nursing facility is appropriate when the following four criteria have been met:
- The patient requires skilled nursing or rehabilitation services:
- For a condition for which the patient received inpatient hospital services; or
- For a condition that arose while receiving SNF care for a condition for which the patient received hospital services; and
- The patient requires skilled services on a daily basis;
- Daily skilled services can be provided only on an inpatient basis in a SNF:
- Need to consider practicality, economy, and efficiency in this decision; and
- Services are reasonable and necessary for the treatment of a patient’s illness or injury:
- Consistent with the nature and severity of the individual’s illness or injury.
There are a few important points we need to focus on for this discussion. First, does the patient require skilled care? If the answer is no, then the care is clearly custodial, and not appropriate for SNFs. If the answer is yes, then we must decide if the patient would be safe with skilled care 2-3 times per week, or if the patient requires this skilled care daily. If the patient would be safe with intermittent skilled services, home with home health care would be appropriate, but if daily skilled care is needed, then SNF care is appropriate and is covered by Medicare. That’s it! There are no requirements on how much assistance the patient requires or how far they ambulate with stand-by assist (SBA). If your patients are meeting these requirements and being denied by Medicare Advantage, stay tuned, because you should be fighting back.
Medicare Advantage organizations tend to focus on the third- and fourth-listed requirements above when issuing denials for SNF care, particularly when the skilled need is therapy-related. During peer-to-peer discussions, we should be reminding Medicare Advantage of these regulations, and focusing conversations only on these four requirements. MA plans often confuse skilled therapy needs associated with activities of daily living as custodial care. As mentioned above, some non-skilled needs can become skilled based on the patient condition and diagnosis, but this can be seen as a “gray area” by Medicare Advantage, and it can be difficult to convince them otherwise. In my experience, we tend to determine the need for SNF care based on therapy notes, and not based on the patient’s medical needs and comorbidities. Since MA plans often focus on therapy metrics in denials, I recommend focusing on the medical issues for which patients need skilled nursing. Remember, the requirement is that the patient requires daily skilled care that, for reasons of practicality and efficiency, can only be provided on an inpatient basis. Patients who require ongoing IV antibiotics, increased monitoring on diuretics, new blood pressure medications, wound care etc., all could benefit from daily skilled nursing, depending on risk. This alone technically meets the requirements for SNF acceptance and payment. In my experience, it is much more difficult for them to rationalize the medical care in addition to the therapy versus therapy alone. Remember, the above four criteria are not negotiable, as they are regulations. And, as noted, the regulations also state that MA plans must provide the same or better benefits as traditional Medicare.
We have discussed the medical necessity requirements for SNFs, but we also need to briefly review some of the other requirements, given the recent expiration of the COVID-19 emergency waivers. Recently, on Monitor Mondays, Dr. Juliet Ugarte Hopkins discussed the expiration of these waivers and the requirement for three inpatient days prior to discharge to an SNF. If you did not read her RACmonitor article, I suggest you do. The patient must also transfer to the SNF within 30 days of the qualifying stay, with a few exceptions. These exceptions involve predictable delays in the need of skilled care, or the “medical appropriateness exception.” For example, if a patient has a surgery to repair a broken hip, but is recommended to be non-weight bearing for six weeks, skilled therapy may not be appropriate until the patient is weight-bearing. In that case, Medicare does allow for the transfer to a SNF to be delayed beyond the usual 30 days. However, the delay must be predictable, and specifically documented at the time of discharge from the hospital. Care that is unpredictable does not qualify for this exception.
We have discussed Medicare regulatory requirements for SNFs and MA plans to provide the same benefits as traditional Medicare. I recommend that you focus on skilled medical needs in addition to therapy recommendations when sending authorizations and doing peer-to-peer conversations. I recommend you also use this information when discussing post-acute care with physicians. I’m sure that everyone reading this has sent a request for authorization because “the physician wants SNF,” only to have it denied. This results in an unnecessary delay and an avoidable increase in length of stay. Understanding these regulations works both ways. We need to advocate for our patients when MA plans are denying appropriate SNF referrals. These denials result in avoidable hospital delays, poor care, and risk of patient harm. We also need to understand when SNF care is inappropriate so we can educate the entire medical team and get the patient the right care in the right place at the right time.
Given that this topic is of great interest and too intricate to cover in one article, stay tuned, as next week we will move beyond medical necessity and discuss appeal strategies, including standard versus expedited determinations and how to move these determinations out of the “court of payor opinion” and have them reviewed by independent Part C contractors.
Programming note: Listen to Dr. Kartchner report this story live during Monitor Mondays with Chuck Buck, May 15, 10 Eastern.