HEARING - U.S. Senate Special Committee on Aging

135
492 54t4, New Developmenu
10,933
Tr, 212-213; P'laintiff Exhibit 2f (Dl-iiritiw of do tving, rather than adlwing rovsrage in
Jererniah Flynnt it mniploye of the defendant udeft to th ei, trpfe umloiot of non-
["Flynn lpmnsition'I) at 10t The intermediary liability. lr. 148-149. 328.
may decide on the basis of this information to
revcrsc the SNF's initial award of coverage to F. AdIminilrt i,- RtHvit (tof lA-nialh of lknt fits
the patient. Tr, 147-148. The SNF may then be 26. letween January 1, 1977 an I Seenimher
liable fur the cust of any services erroneously 30. 1979, the number of initial cerrage dleter-
rendered to the patient.
minations issued by Medicare iniermediarics fur
23. However, when the SNF denies a claim for patients residing in Connecticut nursitg homes
Medicare coverage, the SNF is not required to was 74.815, or 2267 cach month. Plaintiffs
provide the intermediary with any information Exhibit 11 (Defendant's Answers to Plaintiffs'
concerning the patient's condition (aside from First Interrogatories) at 4. Approximately 98
his admitting diagnosis) or the treatment that percent of these determinations were denials.
may have been ordered by the physician or Tr. 186, 167. Plaintiffs' Exhibit IS.
rendered by the SNF. Tr. 214-215; Flynn Depo- 27. A substantial percentage of these denials
sition at 2021, 30. The SNF is required to were for physical therapy benefits. For example,
provide additional documentation to the inter- a former administrative law judge at the Social
mediary only if the patient seeks reconsidera- Security Administration Office of Hearings and
tion of the SNFs denial of benefits. Accordingly, Appeals in Hartford, Connecticut, who ruled on
ain SNF's denials of coveage are rarely, if ever, approximately 300 Medic-are cases between
questioned by the intermedary unless the 1972 and 1982, testified credibly that approxi-
patient has requested reconsideration. Tr. 29, mately 250 of these cases concerned claims for
147, 329.
SNF coverage in which physical therapy was an
24. The Secretary formerly provided a cover- "important component" Tr. 95. He granted
age determination procedure, sometimes called additional coverage in 75 percent to 80 percent
a "presumption of non-liability." whereby the of the physical therapy cases; typically, he gave
SNF was presumed not to have known or tO the claimants "most, if not all" of the relief that
have had reason to know that the services pro they had requested. Tr. 102-104.
vided to a patient were not covered under Medi- Z8. In addition, the record contains two
care, The SNF was entitled to this surveys of cases in which inital denials of Medi-
"presumption of non-liability" only if it met a care coverage to SNF patients were appealed by
"denial rate criterion" established by the Secre- Legal Assistance to Medicare Patients. Of these
tary. HIM-13 § 3433. The "denial rate crite- 503 cases 292, or 58 percent, involved claims
rion" was satisfied if, of the total number of for physical therapy. Tr. 257, 192; Plaintiffs'
days of care deemed by the SNF to be covered Exhibits 14,20. Of the 292 cases in which physi-
by Medicare, no more than 5 percent were later cal therapy coverage had been denied, 82 per-
denied coverage by the intermediary. RIM-13 cent were eventually reversed on appeal to the
§ 5 3433, 3434. An SNFs denial rate would typi- intermediary, the Secretary or a federal district
cally rise when one of its decisions to grant court. Tr. 193, 259, Plaintiffs' Exhibit 20.
coverage was reversed by the intermediary if its
denial rate rose above S percent, the SNF would Z9. Few denials of Medicare coverage for SNF
lose its "presumption of non-liability" and services are ever appealed. For example, in the
would be liable for the cost of any further cover- period from January 1, 1977 to September 30,
age allowed by the SNF but later denied by the 1979, only 2.4 percent of all SNF initial deter-
intermediary. Tr. 52, 145-146; HIM-13 §3433. minations were appealed for reconsideration by
An SNF could at lease theoretically have lost its the intermediary and only 0.3 percent were
"presumption of non-liability" by erroneously taken to a subsequent hearing before an admin-
denying coverage in more than 10 percent of its istrative law judge. Defendant's Answer to
total claims, see HIM-13 §34392; however, Plaintiffs' Interrogatories at 5, 6 (Plaintiffs
there was no evidence that an SNF waS ever Exhibit 12, 13)- The failure of many SNF
threatened with the loss of its 'presumption of patients to appeal their denials of benefits is
non-liability" for denials rather than awards of attributable in significant part to their age and
coverage. The "presumption of non-liability" ill health. Tr. 184, 344-345. See also David v.
was eliminated by the Secretary in revised regu- Heckler, 591 F.Supp. 1033, 1044 (E.D-N.Y.
lations that took effect March 24, 1986. 51 Fed. 1984) (Weinstein, CJj) (taking judicial notice
Reg. 6222 (Feb. 21, 1986).
that 'numerous erroneous determinations (of
Medicare Part B benefits) are not appealed"
Z5. Because SNFs were more likely to lose
their "presumption of non-liability" by errone-
because of "the difficulty of the elderly in dealously
granting coverage than by erroneously
ing with bureaucratic hurdles").
denying coverage, see Findings of Fact Z2-24, 30. It often takes more than a year to appeal
supra, some SNFs tended to decide "questiona- a denial of Medicare benefits. For example, the
ble" claims by "erring always on the side of family of one of the plaintiffs saited sixteen
Medicare and Medicaid Guide
j 35,374