Appeals court to decide fate of Medicare audit challenges
■ Physicians should have the right to fight the reopening of old claims, the California Medical Assn. argues.
Can health professionals challenge the review of Medicare claims that are more than a year old? The question is being weighed by the 9th U.S. Circuit Court of Appeals in a case that pits government auditors against doctors who bill Medicare.
In an unusual development, the court has asked physician organizations and others to submit additional friend-of-the-court briefs before it rules on the case. The briefs were due by mid-April.
“It is not common for a court to request additional briefing from amicus parties after oral argument,” Long X. Do, legal counsel for the California Medical Assn., said in an email. The CMA “believes this is a good sign that the court is not satisfied with the briefs that [the Centers for Medicare & Medicaid Services] filed and wishes to get a better understanding of the impact of this case on physicians. We are encouraged that the court will not be making its decision in a vacuum but rather will consider the practical and real-life consequences.”
At this article’s deadline, CMS had not returned messages seeking comment. A spokeswoman for the Dept. of Health and Human Services said the department could not comment on pending litigation.
Escondido, Calif.-based Palomar Medical Center sued HHS in 2009 over the reopening of a claim 20 months after initial payment. The medical center had gone through several rounds of administrative appeals to argue that the audit was unnecessary, but HHS said the reopening of a claim that was deemed to have “good cause” was not subject to appeal.
Under Medicare regulations, recovery audit contractors can review a claim for any reason if it is less than a year old. Within four years, the auditors must have good cause to reopen the claim. After four years, there must be clear evidence of fraud to revisit the claim.
Palomar argues that health professionals should be able to fight the reopening of a claim either by administrative action or in court. CMS says Medicare regulations prevent doctors from challenging an audit’s good-cause determination.
Southern District of California Judge Roger Benitez ruled in favor of HHS in July 2010. Palomar appealed. Oral arguments before the 9th U.S. Circuit Court of Appeals were heard in March.
The Litigation Center of the American Medical Association and the State Medical Societies, along with the CMA and eight other state medical societies, issued two joint briefs to the court in support of Palomar. Physicians should be protected from arbitrary and unreasonable efforts to recover payments for services provided long before initiation of the recovery action, the briefs said.
In requesting additional briefs on the case, the appeals court posed specific questions to amicus parties about the Medicare regulations at issue. These included whether an administrative law judge had jurisdiction to review Palomar’s audit complaint.
Federal regulations make it clear that “a recovery audit contractor does not have absolute discretion to reopen closed cost reports, but rather is prohibited from reopening a cost report in certain circumstances,” the litigation center said in its second brief. “Regulations do not preclude administrative appellate review of the question whether the decision to reopen was one that fell within a contractor’s authority.”
Ruling for HHS could increase audits
If the appeals court rules for HHS, California doctors would not be the only physicians impacted, said Gwen Dayton, legal counsel and vice president of health policy for the Oregon Medical Assn. The association was among the medical societies that joined the court briefs.
A ruling for the government means that physicians would “be subject to recovery actions long after the services were rendered, imposing a significant financial burden on physicians and creating uncertainty in budgeting,” she said.
Doctors also are concerned with fairness in the Medicare audit process, said Do, of the CMA. Medicare auditors already have tremendous power, he said. Physicians want to make sure procedural checks are in place over those powers.
“If the 9th Circuit holds that auditors’ determinations of good cause cannot be challenged at all, there would be little to restrain them,” he said. “Such a result would greatly expand the numbers of audits to which doctors are subjected.”
Do noted that some California physicians already have opted out of Medicare for a variety of reasons. Subjecting doctors to unfettered auditor discretion could become one more factor that drives physicians out of Medicare, he said.
The Palomar case is not the only Medicare payment battle doctors are fighting against the government.
The AMA and other physician organizations are pushing back against new requirements on physicians related to possible Medicare overpayments. According to the rules, physicians would be required to sift through up to 10 years of medical records when determining if they received excess pay. Practices also would be required to return any identified overpayments within 60 days.
About 110 organizations, including the AMA, sent an April 16 letter to CMS acting Administrator Marilyn Tavenner, calling on the agency to make necessary changes before the proposal is finalized. The letter called the proposed requirements “impossible, unworkable and unattainable.”