Observers are speculating a recent federal appeals court decision could have a major impact on Medicare reimbursements moving forward, The New York Times reports.
A ruling by the United States Court of Appeals for the District of Columbia Circuit asserted that the Department of Health and Human Services (HHS) has been employing flawed data in determining Medicare payments. The decision potentially gives the green light to hospitals to seek more money from the government, even for past billings.
“It opens up for review determinations that were made long ago,” Thomas W. Coons, a former government attorney, told the Times. “The computations may be open to challenge now, to the extent they affect reimbursement for more recent years.”
The case, brought by St. Francis Medical Center — located in Peoria, Illinois — and over 250 additional healthcare facilities, argued there were significant problems with the discharge data used by the HHS to set amounts the government is willing to pay for various procedures and other services. The discharge data was gathered in 1981 and has been used to set Medicare reimbursements since 1983.
Among other arguments, HHS insisted agency rules mandate that any challenges to decisions, including reimbursement methodologies, needed to be made within three years. The court flatly rejected this notion.
“We do not defer when an agency’s interpretation of its own regulations is ‘plainly erroneous or inconsistent with the regulation,’”the decision states.
A panel of three judges delivered a unanimous decision in the hospitals’ favor. Judge Brett M. Kavanaugh, recently named by President Donald Trump as a nominee to the Supreme Court of the United States, was part of the trio.
“It would seem to be the very definition of arbitrary and capricious for HHS to knowingly use false facts when calculating hospital reimbursements,” Kavanaugh wrote in a concurring opinion. “That is particularly so when those erroneous facts cost hospitals hundreds of millions of dollars. That is real money.”
The government coffers aren’t thrown wide open just yet. There remains a high burden on hospitals, which must prove in any revived claim specifically how errors in the reimbursement data caused financial harm.
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