backHHS Says Claims Appeals Backlog Is Decreasing and May Be Eliminated by the End of FY 2019 – On November 7, 2016, in the pending American Hospital Association (AHA) v. Burwell litigation, HHS filed a motion for summary judgment. A central focus of HHS’s motion for summary judgment is assertions that “the backlog is finally decreasing” due to the measures implemented by HHS. In further support of HHS’s motion for summary judgment, HHS notes that the Recovery Auditor (RAC)-related appeals volume filed with the Office of Medicare Hearings and Appeals (OMHA) has decreased from 50.3 percent in FY 2013 to only 9.5 percent in FY 2016.
HHS also states that, with congressional action, the appeals backlog will continue to decrease and is projected to be eliminated by the end of FY 2019, two years earlier than initially anticipated by HHS. It appears that the “congressional action” referenced by HHS is related to the Audit & Appeal Fairness, Integrity, and Reform in Medicare (AFIRM) bill, which remains pending. In its motion for summary judgment, HHS requests that the court refrain from taking the extraordinary step of issuing a writ of mandamus.
As previously reported, AHA initially filed suit against HHS in 2014, asking the United States District Court for the District of Columbia to grant mandamus relief directing HHS to meet its statutory deadline for administrative review of denials of claims for Medicare reimbursement. In October 2016, AHA filed a motion for summary judgment and stated that HHS had “treated difficulty [of addressing the appeals backlog] as an excuse for inaction.” Accordingly, AHA requested that the court require HHS to implement the following three “practicable solutions” to address the appeals backlog:
- Offer reasonable settlements to broad groups of Medicare providers and suppliers;
- Delay repayment of at least some subset of disputed Medicare claims, and toll the accrual of interest on those claims for waiting times beyond the statutory maximums; and
- Impose financial penalties on RACs for poor outcomes at the administrative law judge level.
As noted, on November 7, 2016, HHS filed a motion for summary judgment and its opposition to AHA’s motion for summary judgment. HHS disagreed with all of the three “practicable solutions” (outlined above) offered by AHA in its motion for summary judgment. HHS also emphasized the need to balance the HHS Secretary’s responsibility to protect the Medicare Trust Fund with the proposed solutions to the appeals backlog. Additionally, HHS contends that many of AHA’s proposed solutions would “have the opposite effect and would worsen the backlog.”
If the court decides to issue a writ of mandamus, HHS requested that the court order HHS to proceed with its new efforts designed to reduce the backlog, including:
- The reopening of the settlement offer to hospitals for inpatient status claims;
- The expanded Settlement Conference Facilitations apart from the proposal concerning State Medicaid Agency appeals;
- The sampling and extrapolation demonstration project for State Medicaid Agency appeals; and
- The new RAC Statement of Work.
If the court determines that further measures are needed to reduce the appeals backlog, HHS offered examples of additional measures that the court could order. Such examples offered by HHS included, among others, prioritizing appeals of providers experiencing financial hardship and extending HHS’s initiative to reduce RAC lookback periods for patient status claims to six months by reducing the RAC lookback period for all claims to one year.
Reporter, Stephanie F. Johnson, Atlanta, + 1 404 572 4629, sfjohnson@kslaw.com.
Federal Judge Blocks CMS Rule Banning Arbitration In Nursing Home Disputes – In September, CMS announced a final rule that bans pre-dispute binding arbitration agreements related to care received in long-term care facilities. Among other things, the rule preserves the right of patients and their families to sue nursing homes in court over quality-of-care disputes. The rule was set to take effect on November 28, 2016, but the American Health Care Association (AHCA), an industry group that represents most nursing homes in the U.S., filed a lawsuit in October trying to block the rule. Last week, a federal judge in Mississippi agreed with AHCA and issued a preliminary injunction blocking the rule until the lawsuit concludes.
The court’s order explained that CMS first proposed the rule in July 2015 “to improve the quality of life, care, and services in [long-term care] facilities, optimize resident safety, [and] reflect current professional standards.” CMS requested public comments on the rule, including several provisions related to the execution of arbitration agreements, and a requirement that admission to a long-term care facility not be conditioned on agreement to binding arbitration. After receiving and reviewing more than 1,000 comments related to arbitration, CMS became “convinced that requiring residents to sign pre-dispute arbitration agreements is fundamentally unfair because, among other things, it is almost impossible for residents or their decision-makers to give fully informed and voluntary consent to arbitration before a dispute has arisen.”
The court believed the rule was “based upon sound public policy” and felt “that nursing home arbitration litigation suffers from fundamental defects originating in the mental competency issue, rendering it an inefficient and wasteful form of litigation.” Nonetheless, the court found that CMS exceeded its authority in issuing the rule, and was “unwilling to play a role in countenancing the incremental ‘creep’ of federal agency authority beyond that envisioned by the U.S. Constitution.”
The lawsuit by the AHCA contends that CMS lacks authority to regulate how nursing homes handle disputes, saying that authority lies solely with Congress. That argument seemed to impress the court, which explained that Congress has repeatedly considered legislation to accomplish virtually the same result as the rule but never passed such a law. The court was concerned that CMS was trying to accomplish by agency fiat what the legislature was unable to do – abolish nursing home arbitration.
The order granting the injunction is an appealable order. Thus, CMS may well seek review now rather than waiting until the litigation runs its course.
Reporter, Scott Cameron, Sacramento, CA, +1 916 321 4807, scameron@kslaw.com.
Federal District Court Finds Hospital-Owned Urgent Care Center Must Comply with EMTALA – On November 1, 2016 the U.S. District Court for the District of Rhode Island denied a hospital-owned urgent care center’s summary judgment motion, contending that the federal Emergency Medical Treatment and Active Labor Act (EMTALA) did not apply to urgent care centers, even if owned by hospitals. The court disagreed, holding that EMTALA does apply to urgent care centers because they are held out to the public as facilities that provide treatment for emergency medical conditions on an urgent basis without requiring a previously scheduled appointment – which is precisely how the EMTALA regulations define a dedicated emergency department subject to its obligations.
The facts of the case are as follows: A patient presented to the South County Hospital Medical & Wellness Center’s Urgent/Walk-in Care (the “Urgent Care”) on September 9, 2013, complaining of severe pain and burning in her chest and right arm. The patient was seen by a physician. After undergoing several tests, she was diagnosed with gastroesophageal reflux disease, given a “GI cocktail,” and discharged with no follow-up ordered. The next day, the patient was found unresponsive at home and was pronounced dead at South County Hospital. The autopsy showed cause of death as atherosclerotic and hypertensive cardiovascular disease.
The threshold question in the case, according to the court, was whether the Urgent Care, which was owned by South County Hospital, is a “dedicated emergency department” of South County Hospital under EMTALA and therefore required to conduct a full medical screening examination and to transfer a patient to a hospital if necessary. The court noted that CMS has made no distinction between urgent care and emergency care and that CMS has stated emergency departments can encompass those off-campus hospital departments that would be perceived by an individual as appropriate places to go for emergency care.
The court found that the Urgent Care’s website stating it can “treat virtually any non-emergency need” was not sufficient evidence of non-emergency services when “urgent” was part of the name and could be easily misconstrued by an ill patient. The court distinguished the case from other cases where an independent facility that was not affiliated with a hospital was exempt from EMTALA obligations.
The court denied the summary judgment motion, finding that EMTALA applied because the Urgent Care held itself out “as a place that provides care for emergency medical conditions on an urgent basis without requiring a previously scheduled appointment.” The opinion is available here.
Reporter, Lara Compton, Los Angeles, +1 213 443 4369, lcompton@kslaw.com.
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The Atlanta Life Sciences & Healthcare Group to Host a Professionals Networking Event -The Atlanta Life Sciences & Healthcare Group (formerly Atlanta Young Professionals in Healthcare) is an educational, networking and social resource for professionals working in or serving the life sciences and healthcare industry. The group is hosting a fall networking event on November 17 in Atlanta. Please contact King & Spalding associates Isabella Wood (iwood@kslaw.com) or Lauren Gennett (lgennett@kslaw.com) for more information. To RSVP, click here.