ABA Makes Recommendations to Proposed Medicare Appeals Rules

On July 5, 2016, CMS proposed amendments to the Medicare appeals process to address the backlog of current matters.  On August 29, 2016, the Health Law Section of the American Bar Association submitted comments to the Department of Health and Human Services relating to the proposed rule issued by the Centers for Medicare & Medicaid Services (“CMS”).
The proposed rules present numerous changes for providers, including some increased procedural difficulties relating to Medicare appeals.  The Health Law Section’s comments address, among other things, CMS’s proposals relating to whether certain final decisions are precedential, requirements for the amount in controversy, and requirements to consolidate proceedings related to the same issues.
Although these rules have not been finalized, it is imperative that health care providers and their business personnel continue to monitor these amendments, as it could have long-term effects on how and when a provider can file an appeal to Medicare.
For access to the Health Law Section’s comments, please visit:
http://www.americanbar.org/content/dam/aba/administrative/healthlaw/comments_alj_proposed_rules_final.authcheckdam.pdf

Kentucky Court of Appeals Offers Hospitals Relief from Overreaching Utilization Review Recoupments

Providers subject to utilization review recoupments in Texas should review Kentucky v. Owensboro Med. Health Sys., Inc., No. 2015-CA-000229-MR (Ky. Ct. App. Aug. 12, 2016).  This case addresses the question of whether a State Medicaid Agency (Kentucky) can retroactively recoup the entire amount paid for an inpatient admission.

In Owensboro, the inpatient admission was determined to be not medically necessary, but the services provided were medically necessary and provided in the appropriate location (a hospital emergency room).

The Court held that the improper admission of a patient as an inpatient did not mean that the services provided were medically unnecessary, as the term is defined for the purposes of Medicaid reimbursement.  Importantly, the Court noted that “medically necessary outpatient care is not to be treated the same as medically unnecessary inpatient care,” as only the inpatient admission was unnecessary.  The Court further went on to state that having the provider “absorb the costs of medically necessary treatment it provided to a Medicaid beneficiary simply because the services were provided on an inpatient basis rather than an outpatient basis” was inappropriate.

While the case is not binding on Texas courts and the Commonwealth of Kentucky may still seek further review in the Kentucky Supreme Court, it does provide hospitals with some hope in these situations, as Courts may be increasingly willing to review Medicaid agency practices and procedures for their practical implications, including Medicaid’s refusal to reimburse a hospital for otherwise medically appropriate and necessary treatment.

(Given that the deadline to seek further review in the Supreme Court of Kentucky has not run, there may be updates to this case forthcoming.)