Medicare Advantage Issued Notices of Non-Coverage: Skilled Nursing Facilities

Information for Skilled Nursing Facilities (SNFs) for Patients with Medicare Advantage (MA)

The following information relates to the new Medicare regulation pertaining to the rights of MA enrollees. The regulation became effective January 1, 2004. Termination of service is an MA organizational decision to discontinue coverage of services being provided to an MA enrollee. This information is applicable only to patients with MA coverage who are receiving skilled nursing care services.

Prior to an MA organization terminating coverage of a service, the SNF will be required to deliver an advance notice to the MA enrollee. The intent of an advance notice is to inform the patient of an end date for MA coverage of the health care service being provided, allowing time for an appeal if the patient disagrees with the coverage end date. Instructions for use of the "Notice of Medicare Non-Coverage." Because of the advance notice, if an appeal were unsuccessful, the most the patient would be financially liable for would be one day of services.

Appeals are conducted by NMMRA as the Medicare QIO, which require that a copy of the enrollee's medical record be provided to NMMRA no later than by close of business the day the request for an appeal was made. Click here for a Fast Track Appeal Timeline.

Notice of Medicare Non-Coverage (Advance Notice)

The Centers for Medicare & Medicaid Services (CMS) require that SNFs deliver the advance notice "Notice of Medicare Non-Coverage." This is a standardized, largely generic notice to be given to each MA patient prior to the MA organization terminating coverage of a health care service. The notice contains only two patient-specific elements: the patient's name and the date services will end. These advance notices provide standardized information on a patient's appeal rights and instructions on how to initiate an appeal.

CMS believes that SNFs are in a better position than MA organizations to carry out routine delivery of service termination notices to their patients. The SNF will deliver the advance notice and, if the patient disagrees with the termination of services, the MA organization will follow-up with a detailed notice.

The SNF's obligation to give an advance termination notice to the patient exists even if the SNF or attending physician disagrees with the MA organization that services should terminate. The MA organization's decision to end services is not an indication that the provider necessarily agrees services should end, but it is necessary to ensure the patient has the opportunity to appeal the MA organization's decision.

Compliance

SNFs are obligated to comply with notice requirements through the amendment of the Code of Federal Regulations (42CFR489.27(b)) provider agreement regulations, as well as through their contractual arrangements with MA organizations. Section 1819(h) of the Social Security Act specifies penalties that may be used by the Secretary of the Department of Health and Human Services (DHHS) when a SNF is not in substantial compliance with the requirements for participation in the Medicare program. These penalties are applied on the basis of surveys conducted by CMS or other survey agencies. In addition, the Code of Federal Regulations (42CFR488.406) includes other penalties for non-compliance, such as denials of payment and corrective action plans.

MA organizations may choose to delegate to the SNFs the responsibility for discharge and termination decisions, and for the delivery of detailed notices in disputed termination cases. However, consistent with the Code of Federal Regulations (42CFR422.502(i)), MA organizations remain ultimately responsible for such delegated requirements.

Issuance of Notice of Medicare Non-Coverage

The advance notice may be given as soon as the termination date is known; however, it must be given no later than two days before the proposed end of the services.

If the patient's services are expected to be fewer than two days in duration, residential patients must be notified at the time of admission. A patient may waive the right to continued services if he or she agrees with being discharged sooner than two days after receiving the notice.

Example:
A physician writes an order stating a skilled nursing home patient may be discharged on a Tuesday; however, the advance notice had been issued listing a termination date of Thursday. If the patient agrees with the doctor's order, he or she may be discharged on Tuesday. The notice simply informed the patient that MA coverage would end Thursday.

The patient must sign that he or she received the notice. If a patient refuses to sign the notice, the SNF will annotate its copy of the notice to indicate the refusal. The date of the refusal is considered the date of receipt of the notice. In addition, the patient must be competent to sign the notice. An incapacitated patient is not able to comprehend his or her rights and, therefore, could not validly "receive" the notice. This situation could be remedied through the use of an authorized representative under Federal or State law.

Example:
If a patient with a diagnosis of senile dementia signed the advance notice, it would not be considered valid. The SNF should have been aware of the patient's inability to accept delivery of the notice based on typical activities that take place during a course of treatment (i.e., admission assessments, care planning evaluations, and discharge planning activities).

For more information, contact:

New Mexico Medical Review Association (NMMRA)
5801 Osuna Road NE, Suite 200
Albuquerque, NM 87109-2587
(505) 998-9898 (in Albuquerque)
1-800-663-6351 (toll-free)