Category: Appeals

Supreme Court Sides with HHS in Dual Eligible Part A Benefits Case

June 28, 2022

The Supreme Court on Friday issued the decision in Becerra v. Empire Health Foundation (see pdf file at link). Unfortunately, in a 5-4 decision, the Court overruled the Ninth Circuit’s decision and decided instead for the government, holding that the language “entitled to benefits under Part A” does not exclusively refer to a patient who has a right to payment. This means that the Supreme Court has sided with HHS’s decision to include non-covered Medicare Part A days (such as exhausted benefit days and Medicare Secondary Payer days) in the SSI Ratio of the Medicare DSH payment calculation.

In a prior decision, the Ninth Circuit found for providers in May 2020, holding that HHS was treating the words “entitled” and “eligible” synonymously, in contradiction of statute. In a surprising and somewhat puzzling turn, the Supreme Court has disagreed with the Ninth Circuit’s analysis, settling the issue in favor of HHS.

Toyon has been representing many of your interests in appealing the agency’s implementation of the 2005 Rule relating to non-covered Part A days, as providers had consistently held that non-covered Part A days should be excluded from the SSI Fraction and included only in the numerator of the Medicaid Fraction. We are working with our attorneys to determine any potential next steps or strategies that may be available to our clients, in light of this disappointing court decision. We will contact you in the coming weeks as necessary if there is any further opportunity to pursue this issue.

In the meantime, please contact Karen S. Kim at (925) 685-9312 or at karen.kim@toyonassociates.com if you have any questions.

Supreme Court Grants Review of Part A Appeal

July 10, 2021

Last week, the Supreme Court granted CMS’s request for review of the Ninth Circuit Court of Appeals’ decision in Empire Health v. Azar (Case 18-35845), a ruling issued in favor of providers relating to the government’s inclusion of non-covered Medicare Part A days (such as exhausted benefit days and Medicare Secondary Payer days) in the SSI Ratio of the Medicare DSH payment calculation.

In May 2020, the Ninth Circuit Court ruled in Providers’ favor, holding that the 2005 Rule promulgated by the Secretary of Health and Human Services be vacated on the grounds that the rule is “substantively invalid.” This ruling, which constituted a departure from rulings on the same issue in the D.C. Circuit and Sixth Circuit Court of Appeals, was issued on the grounds that HHS arbitrarily included non-covered Medicare Part A days in its calculation of the SSI Fraction, in direct conflict with the Ninth Circuit’s longstanding interpretation of the meaning of “entitled to [Medicare].” (Legacy Emmanuel Hospital and Health Center v. Shalala, 97 F. 3d 1261, 1265-66 (9th Cir. 1996)).

According to the Court, “entitled” means the patient has an “absolute right . . . to payment,” whereas the word “eligible” means the patient “simply meets the Medicaid statutory criteria,” and HHS’s decision to treat the words “entitled” and “eligible” synonymously is contrary to the statute.

What it Means to You

Toyon Associates, Inc. has been helping Providers appeal the agency’s implementation of the 2005 Rule relating to non-covered Part A days. Providers’ position has been consistent non-covered Part A days should be excluded from the SSI Fraction and included only in the numerator of the Medicaid fraction.

As the Empire decision constitutes a “circuit split,” Toyon anticipated the Supreme Court’s decision to grant review and is working proactively with our attorney who prevailed in the Empire case to best position our clients’ appeals in court as we head into the next phase of litigation.

What Now?

We will need to wait to see how the Supreme Court rules on this appeal. We anticipate oral arguments will be heard by year-end, with a decision forthcoming in Summer 2022. There is also speculation that this pending Supreme Court decision in the Empire case could bear some implications on the Part C Days litigation, another appeal issue Toyon is actively pursuing for our clients. Toyon will be contacting affected hospitals in the coming weeks as necessary, as more details become available on this issue.

Please contact Karen S. Kim at (925) 685-9312 or karen.kim@toyonassociates.com if you have any questions or concerns.

Court Grants Government’s Motion to Remand Part C Cases Post-Allina II

February 6, 2021

Service Line Contact:
Karen Kim, Vice President Appeal Services karen.kim@toyonassociates.com 888.514.9312

This week, the DC District Court granted the Secretary of Health and Human Services motion for voluntary remand of all cases related to Azar v. Allina Health Services, 139 S. Ct. 1804 (2019) (“Allina II”).

Details

As you may know, Toyon has been helping Providers in appealing HHS’s decision to arbitrarily include Part C days in the Medicare fraction between 2004 and 2012, on the grounds that only Medicare Part A days should be included in the SSI ratio and that dual eligible Part C days belong in the numerator of the Medicaid ratio.

Last year, the Supreme Court in Allina II ruled in favor of our Providers, holding that HHS violated its rulemaking obligations by including Part C days in the Medicare fraction between 2004 and 2012. This court ruling should have resulted in CMS restoring the status quo and reinstating HHS’s prior-to-2004 policy (wherein Part C days were NOT included in the Medicare fraction) and distributing substantial additional DSH reimbursement to Providers.

Instead, HHS had requested voluntary remand of the cases to the agency to “re-examine these claims in light of [Allina II] and take further action as necessary to comply with the applicable legal standards announced therein.” Providers opposed remand and pushed the court to instead vacate the agency’s “invalid determinations” and enter judgment “with instructions to promptly pay the hospitals any additional DSH payments due,” pursuant to the Allina I and II decisions.

The Court on Tuesday ruled in HHS’s favor, stating that the agency has “already begun further action to address the Allina II decision,” and so the Court thought remand appropriate to allow the agency “to cure its own mistakes.” A copy of the Court’s order can be found here.

What this means to you

Unfortunately, the agency’s attempt to “address the Allina II decision” as referenced by the Court was publication of a proposed rule in August 2020 wherein CMS stated it would “adopt the same policy of including Medicare Advantage patient days in the Medicare fraction that was prospectively adopted in the FY 2014 IPPS/LTCH PPS final rule and to apply this policy retroactively to any cost reports that remain open for cost reporting periods starting before October 1, 2013.”

Thus, for many reasons, including the delays it would cause, our attorneys fought against the voluntary remand. The agency’s proposed rule and request for remand show that HHS likely plans to leave the problematic policy intact and to refuse correcting the illegal payment determinations for Providers.

What now?

Toyon is working with our attorneys (Ropes & Gray) to determine a strategy for next steps. We will provide you with additional updates as this matter unfolds.

Please contact Karen S. Kim at (925) 685-9312 or karen.kim@toyonassociates.com if you have any questions or concerns.

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