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Category: Appeals

Good News from the Supreme Court

Here’s what happened: A major victory was won today for Providers who have appealed the inclusion of Medicare Part C days in the SSI ratio/exclusion of dual-eligible Medicare Part C days in the Medicaid ratio for years ending 2004-2012.

The Supreme Court of the United States has affirmed Allina Health Services, et al. v. Price, 863 F.3d 937 (CADC 2017), wherein the United States Court of Appeals supported Providers and held that HHS violated the Medicare Act when it changed its reimbursement formula without providing notice and opportunity for comment

HHS arbitrarily began including Part C days in the Medicare fraction through its 2004 Final Rule, and Toyon has been helping Providers in appealing the agency’s actions. The Providers’ position has consistently been that only Medicare Part A days should be included in the SSI ratio and that dual-eligible Part C days instead belong in the numerator of the Medicaid ratio calculation. Providers argued CMS’ actions were tantamount to retroactive rulemaking, which the D.C. Circuit agreed was impermissible in Northeast Hospital Corp. v. Sebelius, 657 F.3d 1 (CADC 2011). Providers also disputed the fact that HHS violated statutory notice-and-comment obligations in establishing its practice of including Medicare Part C days in the SSI ratio, a position both the DC Circuit Court and U.S. Court of Appeals upheld through the prior Allina decisions. 

What it means to you
Today the Supreme Court settled the issue once and for all by agreeing with Providers and holding that HHS did indeed violate its rulemaking obligations in including Part C days in the SSI ratio. This decision should effectively invalidate the agency’s actions andProviders should expect to be offered settlement amounts from CMS for any negative reimbursement impacts caused by its inclusion of Part C days.

What Now?
No details are yet available on how or when the amounts will be calculated nordispensed to affected Providers, but Toyon Associates, Inc. will be contacting affected hospitals in the coming weeks as more details become available.

Please contact Karen Kim at (925) 685-9312 or if you have any questions or concerns. 

The following is the link to the ruling.

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PRRB Appeal Changes

In an effort to address the large number of cases before the PRRB, CMS is considering actions to assist in the reduction of the current PRRB case backlog:
* Develop standard formats and more structured data for submitting cost reports and supporting documentation.
* Create more clear standards for documentation to be used in auditing of cost reports.
* Enhance the MCReF portal by creating more automation for letter notifications and increased provider transparency during the cost report submission and audits.
* Utilize artificial intelligence (AI) protocols based on historical audit data to drive audit processes.
* Triage the current PRRB case inventory and expand the provider’s options for resolving issues through the reopening process.

Procedural Changes Specific to Appealing Empirical DSH Updates
CMS has determined that a significant number of appeals are related to hospitals’ disproportionate patient percentage (DPP), specifically concerning updating the Medicaid fraction. To address this, CMS is proposing that regulations be developed to govern the timing of the data for determining Medicaid eligibility. These routine updates would be handled via reopening, with CMS issuing directives to the MACs requiring them to reopen cost reports for this issue at a specific time and realistic period during which the provider could submit updated data.

CMS is also considering allowing hospitals a one-time option to resubmit cost reports with updated Medicaid eligibility information, similar to SSI realignments. CMS would need to undertake rulemaking in order to determine the timeframe for exercising this option.

CMS is soliciting public comments on these procedural changes, as well as the optimal time for such a review to occur.

For additional information, please contact Karen Kim at
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New Medicare PRRB Appeal Opportunity

Toyon is in the process of setting up appeals for its clients related to the recent ruling that opens the door for an appeal of “predicate facts,” or factual determinations that are relevant to the fiscal year at issue but which were actually decided in a year outside of the current year in dispute. Examples of now appealable predicate facts include IPPS standardized payment rates, SCH and MDH base rates, IME/GME base year resident counts, and GME base year per-resident amounts.

Click here to review the full press release from Toyon.

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