Court Allows Challenge of RAC Recoupment Process – In a decision issued June 5, 2012, a federal district court allowed suit by a hospital challenging the validity of Medicare regulations providing that a contractor’s decision to reopen an initial determination is not appealable. (42 C.F.R. §§ 405.926(l) and 405.980(a)(5))
In a suit filed by St. Francis Hospital (located in Roslyn, New York), Judge Dennis Hurley in the Eastern District of New York waived the Provider’s administrative exhaustion requirement, and found that the court had jurisdiction to hear the case notwithstanding the fact that the Provider had not received any “final decision” from the agency. The court found that “holding [the Provider] to the administrative exhaustion requirement in this instance would prove futile,” since it is “unrealistic” to expect the Secretary to change her policy and the agency has demonstrated an unwillingness to review the propriety of reopenings. Moreover, the court found that the Provider had made a “plausible claim that plaintiff has suffered a deprivation of its Fifth Amendment due process rights,” which “result[ed] in a substantial monetary loss through recoupment.”
Following a Medicare RAC audit, the RAC identified 225 claims that were allegedly subject to overpayment, and forwarded the claims to the Provider’s contractor for reconsideration. The contractor reopened all 225 claims. Medicare rules permit claims to be reopened within one year of the initial determination for any reason, or within four years if cause is shown. The Provider asserts that all of the claims at issue were reopened more than one year after the initial determination (and some were reopened more than four years later), allegedly without any showing of “good cause.”
The merits of these reopenings, some of which remain on appeal at the ALJ level, are not at issue in this case. Rather, the hospital complains that the administrative appeals process does not offer a meaningful opportunity to challenge the propriety of a contractor’s reopening.
The text of the opinion is available by clicking here.
Reporter, Susan Banks, Washington, D.C., +1 202 626 2953, sbanks@kslaw.com.
GOP Nominee Mitt Romney Reveals Outline of Health Care Proposals – On Tuesday, June 12, 2012, Mitt Romney, former governor of Massachusetts and the Republican nominee for President, discussed health care policies that he would implement as President in a speech in Orlando, Florida. These policies would replace the Patient Protection and Affordable Care Act (PPACA), which Governor Romney anticipates will be invalidated by the Supreme Court or rendered ineffective on the first day of his presidency through an executive order and legislative repeal.
Governor Romney’s plan emphasizes making the health care insurance system more like a “consumer market” and less like a “government-managed utility.” This would include the conversion of Medicaid and other federal health care programs into block grants given to state governments, which would bear the responsibility for covering the uninsured, and extending the tax exemption for health insurance premiums to individual purchasers. Governor Romney promised that states’ Medicaid grants would increase every year, but would be capped at inflation plus 1 percent. Governor Romney would also allow states to govern their own insurance markets and limit federal requirements for Medicaid coverage. His plan also addresses one of PPACA’s most popular provisions, the prohibition of discrimination against those with pre-existing conditions. Governor Romney proposed to continue this prohibition as it applies to those individuals who maintain continuous coverage, and to make high-risk pools more accessible and less costly for those who have a gap in coverage.
Other policies set forth in Governor Romney’s health care plan include:
- Capping non-economic damages in medical malpractice litigation;
- Allowing consumers to purchase individual insurance across state lines and to form purchasing pools to negotiate with insurers;
- Allowing funds deposited in Health Savings Accounts to be used for insurance premiums; and
- Encouraging alternatives to fee-for-service reimbursement.
The Romney health care plan is available on the campaign website, accessible by clicking here.
Reporter, Adam Laughton, Houston, +1 713 276 7400, alaughton@kslaw.com.
Chair of House Ways and Means Subcommittee on Oversight Seeks Details from HHS on Center for Medicare and Medicaid Innovation Grant Program – On June 13, 2012, Rep. Charles Boustany, Jr., M.D. (R-La.), chairman of the House Ways and Means Subcommittee on Oversight, wrote to HHS Secretary Kathleen Sebelius requesting information on a Patient Protection and Affordable Care Act (PPACA) grant program run by the Center for Medicare and Medicaid Innovation (CMMI). In the letter, Rep. Boustany expressed concern that the “grant making activities at CMMI reveal a lack of transparency and suggest the possible waste of taxpayer dollars.”
PPACA gives CMMI authority to spend $10 billion over ten years to provide Health Care Innovation Awards to programs that “test innovative payment and service delivery models” with the goal of improving quality of care. As part of CMMI’s Health Care Innovation Challenge, the first round of grants was announced this past May and awarded twenty-six recipients $122.6 million in grant funds, ranging from approximately $1 million to $30 million per awardee for a three-year period. The second round of grants, recently announced on June 15, awarded grant funds to eighty-one recipients.
Rep. Boustany criticized the lack of administrative and judicial review of CMMI’s activities pertaining to the Health Care Innovation Awards, including the application process and selection of awardees. He also inquired as to why certain funded projects anticipated a “negative return on investments.” Rep. Boustany requested that Secretary Sebelius provide by June 27 details of CMMI’s grant program, including:
- Copies of all Health Care Innovation Challenge applications reviewed for the May 2012 award;
- A detailed description of the process by which review teams were assembled and awardees were chosen, including the names of reviewers, a list of grant applications reviewed, and communications related to award decisions; and
- An explanation of CMMI’s process for determining projected savings for the funded projects.
Rep. Boustany’s letter available by clicking here. The CMS press release on the latest round of CMMI grant awards is available by clicking here.
Reporter, Jennifer Simmen Lewin, Atlanta, + 1 404 572 3569, jlewin@kslaw.com.
MedPAC Releases Report on Medicare and the Health Care Delivery System – On June 15, 2012, the Medicare Payment Advisory Commission (MedPAC) released its June 2012 Report to the Congress: Medicare and the Health Care Delivery System (the “Report”). While much of MedPAC’s previous work has focused on providers and payment incentives, the June 2012 Report focuses on the role of Medicare beneficiaries. This focus on Medicare beneficiaries is highlighted in several of the Report’s chapters, including those on reforming Medicare’s benefit design, care coordination in fee-for-service Medicare and care coordination in programs for dual-eligible beneficiaries. The report also addresses care for beneficiaries in rural areas and payment for home infusion, as required by Congressional mandate. The complete Report, as well as a news release and several fact sheets about the Report are available on MedPac’s website, which is accessible by clicking here.
Reporter, Kerrie S. Howze, Atlanta, +1 404 572 3594, khowze@kslaw.com.
This bulletin provides a general summary of recent legal developments. It is not intended to be and should not be relied upon as legal advice.
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