The American Hospital Association and four hospitals have sued HHS over denied Medicare payments resulting from recovery audits.
The AHA filed suit with Missouri Baptist Sullivan (Mo.) Hospital, Munson Medical Center in Traverse City, Mich., Lancaster (Pa.) General Hospital and Trinity Health Corporation in Livonia, Mich.
The plaintiffs based their claims on recent Medicare audits, in which HHS acted through CMS and employed recovery auditors, formerly known as recovery audit contractors, that are paid based on the amount of Medicare reimbursement they recoup from providers.
The plaintiffs claimed CMS "simply refuses" to reimburse hospitals for services covered under Medicare Part B that CMS acknowledges as reasonable and medically necessary for the patient.
When a hospital cares for a Medicare patient on an inpatient basis, it will bill under Medicare Part A. CMS will then pay the hospital. "But months or, typically, years after, a RAC will overrule the physician's decision to admit the patient on the ground that, in the RAC's opinion, the patient could have been treated in the outpatient setting, and will demand the hospital give back the entire Part A payment amount," according to the lawsuit.
AHA and the hospitals claimed they should receive payments for services provided under Medicare Part B, which covers outpatient settings, since the RACs are not disproving the medical necessity of the care. Rather, they are disagreeing with the setting in which the care was provided. "At bottom, if payment cannot be made for medically necessary care under Part A, it must be made under Part B," according to the lawsuit.
The plaintiffs alleged that CMS has "categorically refused to provide that Part B reimbursement," and this has resulted in the loss of hundreds of millions of dollars for necessary care that hospitals provided to Medicare beneficiaries months or years prior.
The hospitals sought for the court to deem CMS' payment denial policy as invalid under the Medicare Act and ordered plaintiff hospitals be paid full Part B reimbursement for the appeals at issue.
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The AHA filed suit with Missouri Baptist Sullivan (Mo.) Hospital, Munson Medical Center in Traverse City, Mich., Lancaster (Pa.) General Hospital and Trinity Health Corporation in Livonia, Mich.
The plaintiffs based their claims on recent Medicare audits, in which HHS acted through CMS and employed recovery auditors, formerly known as recovery audit contractors, that are paid based on the amount of Medicare reimbursement they recoup from providers.
The plaintiffs claimed CMS "simply refuses" to reimburse hospitals for services covered under Medicare Part B that CMS acknowledges as reasonable and medically necessary for the patient.
When a hospital cares for a Medicare patient on an inpatient basis, it will bill under Medicare Part A. CMS will then pay the hospital. "But months or, typically, years after, a RAC will overrule the physician's decision to admit the patient on the ground that, in the RAC's opinion, the patient could have been treated in the outpatient setting, and will demand the hospital give back the entire Part A payment amount," according to the lawsuit.
AHA and the hospitals claimed they should receive payments for services provided under Medicare Part B, which covers outpatient settings, since the RACs are not disproving the medical necessity of the care. Rather, they are disagreeing with the setting in which the care was provided. "At bottom, if payment cannot be made for medically necessary care under Part A, it must be made under Part B," according to the lawsuit.
The plaintiffs alleged that CMS has "categorically refused to provide that Part B reimbursement," and this has resulted in the loss of hundreds of millions of dollars for necessary care that hospitals provided to Medicare beneficiaries months or years prior.
The hospitals sought for the court to deem CMS' payment denial policy as invalid under the Medicare Act and ordered plaintiff hospitals be paid full Part B reimbursement for the appeals at issue.
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